Asia Pacific Equity Research 26 June 2025 Stablecoin Series Part 2: Unpacking 12 Key Questions on Ecosystem, Regulation, Utilization and Equity Implications Building on our Part 1 report (link), this report delves into 12 key questions surrounding stablecoins. The Hong Kong SAR government envisions establishing the city as a premier global hub for digital assets, and we believe stablecoins are a crucial component of the overall digital asset infrastructure. In our view, the growth prospects for stablecoins ...

Group 1 - Conagra Brands operates in the grocery retail and foodservice sectors, selling products under various brand names available in supermarkets, restaurants, and food service establishments [1] - The company has been navigating challenges such as inflationary pressures, supply chain disruptions, and shifting consumer behavior since 2020 [1] Group 2 - The analysis of Conagra Brands is part of a broader fundamental analysis of publicly listed companies, which includes firms like Covestro, Signify, Alibaba, Verizon, and China Mobile [1] - The expertise in accounting allows for thorough analysis of annual reports and financial information, which is crucial for assessing stock valuation [1]

Thanks. Masio Shusan continuing his moonshot bets, this time reportedly pitching TSMC and Trump officials on building a trillionoll AI complex in Arizona. Dear Drabosa has more in today's tech check.So what do we know about this plan. Dearra, we don't know very much Sarah, but it does say something about this race. Like if you thought that hund00 million signing bonuses, multi-billion dollar acquisition attempts, if you thought those were aggressive, I mean there's Masoshi Sun, the soft bank CEO and founder ...

Investment Rating - The report maintains a "Buy" rating on Meituan, JD, Alibaba, Guming, Mixue, and Yum China, with specific target prices set for each company [18][24][25][26][27][36]. Core Insights - The food delivery industry in China has seen a significant increase in daily order volumes, reaching approximately 120 million, driven by competitive subsidies and evolving consumer behavior [2][20]. - Meituan is expected to maintain its leadership in the food delivery market, with a projected market share of 60-65%, while JD and Taobao Instant Shopping/Ele.me are estimated to hold 10-15% and 25-28% market shares, respectively [11][18]. - The competition among food delivery platforms has intensified, particularly between Meituan, JD, and Taobao Instant Shopping, leading to aggressive subsidy strategies and increased order volumes [2][8][10]. Summary by Sections Market Dynamics - The food delivery market has expanded due to platform subsidies, resulting in an increase of around 30 million incremental daily orders, with 15 million of these being beverage orders, which are less likely to sustain post-subsidy normalization [12][20]. - The effective take rate for merchants in the industry has decreased to the low 20% range, down from mid-20% levels, indicating increased pressure on margins due to competition [10]. Company Strategies - Meituan has shifted to more aggressive strategies to defend its market share, including targeted subsidies and differentiated offerings [8]. - JD has ramped up its order volumes to 25 million daily, leveraging its delivery capabilities and expanding its on-demand retail offerings [24]. - Taobao Instant Shopping has initiated aggressive subsidy campaigns to enhance its market position, benefiting from traffic support from its main apps [10]. Long-term Projections - The expert forecasts that JD's loss per order will peak in Q2 2025, with gradual improvements expected by Q4 2025 [11]. - The long-term competitive landscape suggests that Meituan will continue to dominate, while JD and Taobao Instant Shopping will need to adapt to maintain their market positions [11][18].

Investment Rating - Industry View: In-Line [7] Core Insights - The semiconductor industry is experiencing unprecedented demand driven by AI advancements and geopolitical tensions, particularly in the context of China's push for AI localization [4][8]. - The report highlights a decoupling between broader semiconductor cycles and AI growth, indicating that while overall semiconductor growth was slow at 10% year-over-year in 2024, AI-related demand continues to surge [10][13]. - Logic semiconductor foundry utilization is reported at 70-80% in the first half of 2025, suggesting that recovery is still ongoing [9]. Demand and Supply Dynamics - Significant demand is anticipated from AI, with NVIDIA experiencing booming demand and its Days of Inventory (DOI) reaching a historical low [15]. - The report forecasts that the top six companies' capital expenditures (capex) will grow by 62% year-over-year to RMB 373 billion [30]. - China's GPU self-sufficiency ratio was 34% in 2024, expected to rise to 82% by 2027, with local GPU revenue projected to reach RMB 287 billion by 2027 [32][35]. Market Trends and Projections - The total addressable market (TAM) for cloud AI semiconductors is projected to grow to USD 235 billion in 2025, with edge AI semiconductors expected to grow at a compound annual growth rate (CAGR) of 22% from 2023 to 2030 [49][60]. - Inference AI semiconductors are forecasted to grow at a CAGR of 55% from 2023 to 2030, outpacing training and general-purpose chips [60]. - The report anticipates robust cloud capex spending of nearly USD 789 billion across 2025-2026, driven by major cloud service providers [49]. Supply Chain and Capacity - TSMC is expected to expand its CoWoS capacity significantly, with projections of producing 5.1 million chips in 2025 [61][70]. - AI computing wafer consumption is estimated to reach up to USD 15 billion in 2025, with NVIDIA accounting for the majority of this consumption [73]. - The report indicates that the semiconductor supply chain is under pressure, with GPU supply and demand needing time to align [70].

Investment Rating - The report maintains an "Overweight" (OW) rating for several companies including Genscript Biotech, Innovent Biologics, Kingdee International, and Zhongsheng Group Holdings [32][46][50][53]. Core Insights - The A-share SMid indices, particularly the micro-cap CSI2000, have outperformed the CSI300 year-to-date (YTD), with CSI2000 rising by 12.9% compared to CSI300's 0.2% [2][3]. - High-beta micro-caps have benefited from robust trading volumes and less national team ownership, leading to increased retail trading interest [3][4]. - The outlook for 2Q25 suggests a range-bound trading environment for MXCN, with potential upside driven by trade negotiations and possible reforms in China [4][8]. Summary by Sections Market Performance - The micro-cap CSI2000 has outperformed other indices, with H shares rising by 15% to 18% in USD terms compared to the flat performance of onshore indices [2][3]. - The consensus EPS for SMids has faced significant downgrades, with declines of 13% and 17% for CSI500 and CSI1000 respectively [8][16]. Sector Analysis - Defensive sectors such as Healthcare, Utilities, and Consumer Staples have performed well, while Real Estate and IT lagged behind [8][25]. - Healthcare and IT remain preferred themes, with expectations for biotech shares to benefit from improved policy outlooks and AI adoption in IT [8][25]. Company-Specific Insights - Kingdee International has seen a 51% increase in shares YTD, supported by AI adoption [10]. - Innovent's shares have surged by 98% YTD, driven by strong product sales and potential for significant revenue growth from new drugs [10]. - Genscript is expected to achieve a 45% CAGR from 2024 to 2026, with profitability anticipated in 2026 [10].

Investment Rating - The report does not explicitly state an investment rating for the industry or specific companies [1]. Core Insights - The report highlights a tentative US-China détente following a call between Trump and Xi, with discussions on trade and potential sanctions [1]. - The HSCEI index increased by 2.5% and the CSI 300 by 0.9% during the week [1]. - China is considering a RMB500 billion investment to accelerate infrastructure projects in AI, digital economy, and consumption [1]. - The report notes that the IT, Communication Services, and Broadline Retail sectors outperformed, while Industrials, Consumer Staples, and Energy sectors underperformed [1]. Key Themes Update - The report identifies key themes in the China market, focusing on index-heavy stocks with high dividend yields and local champions expanding globally [12]. - High yield stocks listed include CCB, ICBC, and PetroChina, with dividend yields ranging from 5.1% to 7.1% [12]. - Local champions going global include companies like BYD and Great Wall Motor, which are less impacted by US/EU tariffs [12]. Market Movements and Capital Flows - The report indicates that the A-share market saw a 22.9% year-over-year increase in new account openings in May [3]. - Preliminary data shows that May passenger vehicle wholesales increased by 14% year-over-year, with NEV sales up by 38% [3]. Earnings Revisions - The report does not provide specific details on earnings revisions for the industry or companies [1]. Recovery Trends - The report notes that the top 100 developers' home sales decreased by 8.6% year-over-year in May [3]. - Average new home prices in 100 cities increased by 0.3% month-over-month in May, while secondary home prices decreased by 0.7% [3]. Key Events - The report mentions that the US made tough requests to Vietnam in trade talks, including reducing reliance on Chinese industrial goods [2]. - The PBOC is set to inject RMB1 trillion via outright reverse repos in June [2]. Key News - The report highlights that the EU voted to limit China's access to its medical device procurement [1]. - China is reportedly considering a major deal to order hundreds of Airbus jets during EU leaders' visit [1].

Will we see a walk back in restrictions over semiconductors and their access into China. I think we will. And I think there will be, you know, a move from these kind of broad based numerical sanctions and and terror figures to something that's more pointed and targeted.And we've seen already those levers being pulled on both sides. Obviously, the, you know, the U.S. imposing the export restrictions on the H-20 chips that could impact a four and a half billion dollars of sales of any video. The Chinese obvio ...

Core Viewpoint - Alibaba's shares experienced a decline due to concerns over a potential backlash from the U.S. regarding its AI technology collaboration with Apple for iPhones sold in China [1][2]. Group 1: Market Reaction - Alibaba's shares fell by as much as 4.8% in Hong Kong following news of the U.S. government's scrutiny of Apple's plan to utilize Alibaba's AI technology [1][2]. - The New York Times reported that U.S. officials are worried that this collaboration could enhance Alibaba's AI capabilities and increase Apple's vulnerability to China's censorship and data-sharing laws [3]. Group 2: Trade Relations and Concerns - The ongoing U.S.-China trade tensions have made collaborations like that of Alibaba and Apple a source of concern, particularly under the current trade war context [4]. - The Trump administration's imposition of duties on small parcels has added to these concerns, although some duties were reduced after negotiations [5]. Group 3: Financial Performance - Alibaba reported a 7% year-on-year increase in total sales for the quarter ending in March, amounting to 236.4 billion yuan ($32.6 billion), but net income surged by 1,203% to 12 billion yuan due to changes in equity investments [7]. - Despite the sales growth, the results fell short of market expectations, leading to a decline in Alibaba's shares [7]. - Future profitability may be affected as Alibaba invests in on-demand delivery services, which are expected to impact growth in its cloud computing unit, where sales grew 18% year-on-year to 30.1 billion yuan [8].

Core Insights - Alibaba's shares declined by 4% in premarket trading after missing earnings expectations for its fiscal fourth quarter, with revenue up 7% year-on-year but below analyst estimates [1][6] Financial Performance - Revenue for the fiscal fourth quarter was 236.5 billion Chinese yuan ($32.6 billion), slightly below the expected 237.2 billion yuan [6] - Net income was reported at 12.4 billion yuan, significantly lower than the expected 24.7 billion yuan [6] Market Conditions - Investors are concerned about the impact of macroeconomic volatility on consumer sentiment in China, particularly due to the ongoing trade tensions between Washington and Beijing [2] - Recent agreements to suspend most tariffs on goods between the U.S. and China may influence market conditions [2] Strategic Initiatives - Alibaba has extended its partnership with Rednote (Xiaohongshu) to enhance shopping experiences on its Tmall and Taobao platforms by embedding product links in posts [3] - The company is focusing on advancements in artificial intelligence, launching the Qwen 3 large language model to power its AI assistant Quark [4] Competitive Landscape - The AI sector in China is highly competitive, with notable investments from other tech giants like Tencent, which reported a 91% year-on-year increase in capital expenditures driven by AI investments [4]