Core Insights - Apple is expected to introduce a foldable iPhone as part of the iPhone 18 lineup in September 2026, with limited upgrades anticipated for the iPhone 17 series this fall [3][4] - The foldable iPhone is predicted to feature a book-style fold similar to Samsung's Galaxy Z Fold series, with a smaller inner and outer display [3][4] - The anticipated price for the foldable iPhone is $1,999, which could create a $65 billion revenue opportunity for Apple [4] Market Position and Competition - Apple's market share in smartphone shipments is currently at 13.9%, placing it fifth behind domestic brands like Huawei [6] - The installed base for Apple smartphones remains flat at 23% to 24%, with a slight increase in the second quarter attributed to subsidies [6] - Competitors like Huawei have already launched their own foldable phones, intensifying competition in the market [5] Geopolitical and Supply Chain Challenges - Geopolitical risks, including potential crackdowns from Beijing on American tech companies, pose significant challenges for Apple in the Chinese market [7] - The Taiwan conflict could threaten chip supply, adding to the volatility of Apple's supply chain [7] - Tariff threats from both the U.S. and China further complicate Apple's operational landscape, impacting margins in a crucial growth market [7]

Core Insights - Apple is closing its first store in China, located in Dalian's Parkland Mall, due to struggles in the Chinese smartphone market [1][2] - The closure is part of a broader trend of declining consumer spending in China, affecting various retailers including luxury brands [2] - Apple has reported a significant decline in sales in China, with a total revenue of $66.95 billion last year, down nearly 10% from its peak [5] Group 1: Store Closure and Market Conditions - The closure of the Dalian store marks Apple's first shutdown in China since 2008 [1] - The Parkland Mall has seen several retailers exit, prompting Apple's decision to close its store [2] - The Chinese government has initiated stimulus programs to boost spending on smartphones and electric vehicles [3] Group 2: Sales Performance and Competition - Apple has experienced a sales decline in China for six consecutive quarters, with a 25% drop in the final quarter of the last year [3][5][6] - The company's market share in China fell to 15.5% last year, down from 17.9% the previous year, due to increased competition from local brands like Huawei, Xiaomi, and Vivo [8] - Despite the closure, Apple plans to open a new store in Shenzhen and maintain its other store in Dalian, expecting to end the year with 58 stores in China [8][9]

Core Viewpoint - Tongda is expected to recover earnings in 1H25 with projected revenue of HK$2,802 million and net profit of HK$59 million, reflecting a year-on-year decrease in revenue and a significant increase in net profit due to prior losses from business restructuring and impairment provisions [1][2] Group 1: Financial Performance - The estimated revenue for 1H25 is HK$2,802 million, representing a 6% decrease year-on-year, while net profit is projected to increase by 359% year-on-year [2] - Excluding disposed business, Tongda's revenue is expected to grow by 13% year-on-year in 1H25, driven by consumer electronics and household & sports goods [1] - Gross profit margin (GPM) is anticipated to improve to 15.7% in 1H25 compared to 15% in 1H24 [1] Group 2: Business Outlook - The outlook for 2H25 and 2026 is positive, with expected order wins from Samsung and Huawei, increased adoption of glass fiber casing, and momentum in Smart Tech [3] - The smartphone casing segment is projected to benefit from order wins and glass fiber casing adoption, while Smart Tech is expected to see growth from new projects with Ikea and increased capacity in Malaysia [3] - Home appliances are forecasted to experience stable single-digit growth driven by orders from Midea, Haier, and Xiaomi, and networking is set to ramp up with new orders at the Vietnam plant starting from 3Q25 [3] Group 3: Valuation and Investment Recommendation - The recommendation to maintain a BUY rating is based on solid earnings recovery and attractive valuation metrics [4] - The new target price (TP) is set at HK$0.123, reflecting a higher P/E ratio of 6.6x for FY25E, which is still at a 30% discount to the 10-year average forward P/E of 9.0x [4] - The stock is considered undervalued, particularly due to its 66.2% shareholding in the A-share subsidiary Tongda Smart Tech and a net cash position of HK$635 million for FY24 [4]

Group 1 - Apple is closing its store at Parkland Mall in Dalian City, marking the first store closure in China due to a changing retail landscape [2][3] - The company operates around 56 stores in the greater China region, which constitutes over 10% of its total global retail locations [2] - Apple reported a 2.3% decline in sales in China, totaling $16 billion in the second quarter, which was slightly below analyst expectations [4] Group 2 - China's overall smartphone market has seen a decline, with shipments dropping 4% to 69 million units in the second quarter after six consecutive quarters of growth [4] - Local competitors, particularly Huawei, have gained popularity, with Apple's iPhone ranking fifth in the market, although the company has managed to narrow its decline [5] - The pressures faced by Apple in China are part of a broader crisis as competitors advance in the artificial intelligence sector [5][7]

Index Performance - The Hang Seng Index (HSI) closed at 25,562, up 0.7% for the day and 27.4% year-to-date[2] - The MSCI China Index increased by 0.4%, with a year-to-date growth of 25.4%[2] - The KOSPI index showed significant growth, up 33.8% year-to-date, closing at 3,210[2] Commodity Price Performance - Brent Crude oil prices rose by 2.9% to $70 per barrel, but are down 3.1% year-to-date[3] - Gold prices decreased by 0.7% to $3,315 per ounce, with a year-to-date increase of 26.3%[3] - The Baltic Dry Index (BDI) surged by 126.5% year-to-date, remaining stable at 2,258[3] Economic Outlook - China's GDP growth is projected at 4.9% for the year, with Q3 and Q4 expected to grow at 4.7% and 4.3% respectively[6] - Manufacturing investment is anticipated to slow from 7.5% in H1 to 3.6% in H2, while infrastructure investment is expected to decrease from 8.9% to 6.8%[6] - Consumer retail sales are forecasted to grow by 4.3% in H2, with an annual growth of 4.6%[6] Monetary Policy Insights - There is potential for a 50 basis point reduction in reserve requirements, with an expected interest rate cut of 10-15 basis points in H2[7] - Fiscal policy may see optimization in the use of existing funds and an increase in policy financial tools, though aggressive new debt issuance is not anticipated[7]

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: China Internet and AI Services - **Overall Industry View**: Attractive outlook for the China Internet sector, particularly in AI applications and services [3][4][19] Core Insights - **AI Adoption**: - 18% of enterprise workload is expected to be replaced by AI within three years [20] - Rapid enterprise adoption of AI is noted, but monetization of AI applications may lag behind [14][19] - **Investment Trends**: - Major players in the industry are ramping up capital expenditures (capex) on AI technologies [8][27] - Total capex by top internet players is projected to reach Rmb 383.768 billion by 2030 [25] - **Consumer and Enterprise AI Demand**: - Consumer usage of AI is projected to grow from Rmb 5.801 million in 2023 to Rmb 555.975 million by 2030, reflecting a compound annual growth rate (CAGR) of 39% [25] - Enterprise AI software spending is expected to increase significantly, with projections of Rmb 249.860 billion by 2030 [25] Company-Specific Insights - **Tencent**: - Strong visibility in consumer AI monetization, particularly through advertising [34][39] - Daily active users (DAU) for Yuanbao, Tencent's AI assistant, are ramping up, integrating AI into WeChat [41] - Long-term annual ad revenue from Video Accounts is estimated to reach Rmb 50 billion [47][50] - **Alibaba**: - Alicloud revenue is expected to double in three years, indicating strong growth potential [52] - Facing near-term earnings pressure due to intense competition in food delivery and quick commerce [56][62] - **Baidu**: - Limited visibility in core advertising turnaround, with core revenue under pressure [92][100] - Ernie Bot has seen significant user growth, with plans for further enhancements in AI capabilities [100][102] - **Meituan**: - Intense competition in the food delivery sector is expected to lower long-term profitability [62][75] - Quick commerce market share is projected to be split among multiple players, impacting profitability [75][78] - **PDD Holdings**: - Strong momentum for Temu, with expectations of GMV growth of 45% year-over-year to US$77 billion in 2025 [114][116] Market Dynamics - **Competition**: - The food delivery market is experiencing aggressive competition, with significant investments from major players like JD and Alibaba [74][75] - Price wars are leading to unsustainable practices, prompting regulatory scrutiny [74][75] - **E-commerce Growth**: - The e-commerce market in China is projected to continue expanding, with online retail sales growing by 6.3% year-over-year in 2Q25 [103][104] Additional Insights - **AI Model Development**: - Major Chinese tech firms are developing proprietary AI models and integrating them into their platforms, enhancing their competitive edge [9][10] - **Consumer Behavior**: - Increased consumer engagement with AI applications is expected to drive growth across various sectors, including e-commerce and social media [25][27] This summary encapsulates the key points discussed in the conference call, highlighting the trends, company-specific insights, and market dynamics within the China Internet and AI services sector.

Apple just one of four Mag 7 names set to report this week and some new iPhone sales data out of China could shed some light on what to expect. Our Steve Kovac has that in today's tech check. Morning Steve.>> Yeah, some good data Carl coming out of here ahead of earnings on Thursday. China though it's still a sore spot for Apple as it loses market share to its big rival out there Huawei. But some good news in this report.iPhone sales are growing again and that's thanks to government subsidies, trade-in deal ...

AI Model Landscape - Deepseek 的出现对美国来说是一个巨大的胜利，如果它只能在华为上运行，情况将大不相同 [1] - 美国技术堆栈成为世界标准对于赢得人工智能竞赛至关重要 [2] - Deepseek 等顶级开源模型已被下载数百万次 [2] Developer Ecosystem - 开发者的支持对于任何计算平台的成功至关重要 [2] - 世界上一半的开发者都在 [2]

Core Insights - Apple is expected to report third-quarter fiscal 2025 results on July 31, with projected revenue growth in the low to mid-single digits year-over-year [1] - The Zacks Consensus Estimate for fiscal third-quarter revenues is $88.92 billion, indicating a 3.67% year-over-year growth [1] - Earnings consensus is set at $1.42 per share, reflecting a 1.43% increase from the previous year [2] Revenue Breakdown - iPhone sales are projected to reach $40.61 billion in the third quarter, suggesting a 3.3% year-over-year growth [4] - Services revenue is expected to grow to $26.96 billion, indicating an 11.3% year-over-year increase [8] - Mac revenues are estimated at $7.16 billion, reflecting a 2.2% year-over-year growth [12] Market Performance - Apple's iPhone accounted for 49.1% of net sales in the second quarter, with sales increasing 1.9% year-over-year to $46.84 billion [4] - Greater China sales are estimated at $15.27 billion for the third quarter, suggesting a 3.7% growth year-over-year [6] - Apple has gained market share in the PC market, with a 9.1% share according to IDC, up 110 basis points year-over-year [10] Competitive Landscape - iPhone sales have faced competition from Chinese vendors like Huawei and Xiaomi, but Apple has seen over 8% year-over-year growth in China recently [5] - Apple's Mac shipment growth rate is the largest among competitors, with a 21.4% year-over-year increase [11] Stock Performance - Apple shares have risen 14.5% year-to-date, underperforming the Zacks Computer & Technology sector's return of 11% [13] - The forward 12-month Price/Earnings ratio for Apple is 28.23X, higher than the sector average of 27.86X, indicating a stretched valuation [16] Future Prospects - Apple's focus on AI is expected to enhance iPhone sales and Mac shipments, with expanded availability of Apple Intelligence in multiple languages [19][20]

Core Insights - Huawei showcased its Ascend chips and AI system at the World AI Conference in Shanghai, highlighting its competitive position in the AI chip market [1][4] - Nvidia, despite previous hopes of re-entering the Chinese market with its H20 chips, did not participate in the conference, indicating potential challenges in its relationship with China [2][3] Group 1: Huawei's Developments - Huawei presented its new computing system, the "Atlas 900 A3 SuperPoD," which connects 384 Ascend chips for AI model training [4] - The Ascend chips, while individually less powerful than Nvidia's Blackwell chips, compensate by utilizing five times more chips in their system compared to Nvidia's GB200 [4] Group 2: Competitive Landscape - Nvidia's absence at the conference contrasts with Huawei's prominent display, emphasizing the latter's growing influence in the Chinese AI market [2][3] - Other Chinese companies, such as Moore Threads and Yunsilicon, also participated in the AI expo, indicating a competitive environment in the semiconductor industry [5]