Investment Rating - The report assigns an "In-Line" investment rating for the Greater China Tech Semiconductors industry [5]. Core Insights - The report emphasizes a positive outlook for auto semiconductor localization in China, driven by the dominance of Chinese EVs in the global market, government support, and sufficient mature node foundry supply [1][19]. - Three key investment themes are identified within the China auto semiconductor supply chain, focusing on power semiconductors, autonomous driving chips, and microcontroller units (MCUs) [20][21]. Summary by Sections Investment Themes - The report identifies three main investment themes in the China auto semiconductor supply chain: 1. **Power Semiconductors**: Companies like Yangjie Technology and Starpower are highlighted for their strong positions in the market, with Yangjie showing a stable net margin of approximately 18% over the last three years [2][20]. 2. **Autonomous Driving Chips**: Companies such as Horizon Robotics and Alchip are noted for their roles in the growing ADAS market, with increasing adoption in more affordable EVs [21][23]. 3. **Microcontroller Units (MCUs)**: GigaDevice is recognized for its potential to benefit from localization trends, despite the current low self-sufficiency ratio of 3% in auto MCUs [21][40]. Market Dynamics - The report discusses the competitive landscape, noting that global auto semiconductor vendors from Europe, Japan, and the US dominate the market, with Greater China's share accounting for less than 5% [8][22]. - The growth of the electric vehicle (EV) market in China is highlighted, with expectations for EV production to nearly triple by 2030, leading to increased semiconductor content per vehicle [22][36]. Self-Sufficiency and Growth Potential - The report projects that China's auto semiconductor self-sufficiency will reach 28% by 2027, with significant growth opportunities in power discretes and MCUs due to their current low self-sufficiency ratios [10][46]. - The report indicates that local power semiconductor companies are willing to sacrifice margins for market share, which may lead to increased competitiveness against global players [26]. Export Opportunities - The potential for direct exports of auto semiconductors from China is deemed low, with the focus instead on leveraging EV exports, which are expected to grow by 31% in 2025 [4][19]. Stock Recommendations - The report provides a list of recommended stocks, with Yangjie Technology and OmniVision favored for their growth prospects in the auto segment, while Horizon Robotics faces challenges due to heavy R&D investments [2][18].

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].

Investment Rating - The report maintains a bullish outlook on stocks related to Reliability of Power/Water/Energy, Efficiency of Energy/Resources/Land, and solutions for Aging Populations/labor strains [1][15][38] Core Insights - Sustainable funds with broader APAC regional mandates have outperformed non-ESG peers for six consecutive quarters, while those with individual country mandates have struggled [1][35] - Performance is deemed more critical than policy for the growth of Sustainable Investing's AUM penetration, with a focus on quality and governance [1][13] - The report highlights a notable increase in AUM penetration for ANZ-focused Sustainable funds, reaching 4.8% by 1Q25, up 23 basis points year-over-year [12] APAC Fund Performance and Flows - APAC-focused Sustainable equity AUM remained flat at US$212 billion, with minor outflows of -US$0.9 billion in 1Q25, primarily from Japan and Emerging Markets-focused funds [9][19] - Passive Sustainable strategies now represent 52% of total APAC-focused Sustainable AUM, attracting US$1.0 billion of inflows in 1Q25 [9][19] - Sustainable funds in the top two quintiles based on 3-year risk-adjusted returns saw cumulative inflows of +US$6.0 billion in 2024, contrasting with -US$16 billion outflows in the bottom cohort [10][12] Stock Ideas - New entrants into the E&S Leaders screen include companies like JYP Entertainment, Kweichow Moutai, and Tata Consultancy, all rated as Buy by Goldman Sachs [6][7] - Thematic stock in focus includes Harmonic Drive Systems, which aligns with Green Capex and Aging Populations Solutions themes [6] Sustainable Fund Trends - The report notes that the median performance of APAC-focused Sustainable funds was at the 45th percentile in 1Q25, indicating underperformance relative to peers [35][42] - Greater China-focused Sustainable funds have shown significant impact on median performance, comprising approximately 50% of the funds tracked [36][44] - The report emphasizes a less-is-more approach to Sustainable integration strategies, focusing on measurable metrics [38]