Key TakeawaysEli Lilly (LLY) reported that its oral GLP-1, orforglipron, achieved a 9.2% weight loss in Phase 3 trials, significantly outperforming Novo Nordisk's oral semaglutide.Toronto-Dominion Bank (TD) beat Q1 earnings estimates with an adjusted EPS of CAD 2.44, supported by adjusted revenue of CAD 16.63 billion.Danish Prime Minister Mette Frederiksen officially called for a parliamentary election on March 24, citing ongoing conflicts regarding Greenland and new wealth tax proposals.Stellantis (STLA) i ...

Core Viewpoint - Great Wall Motor (GWM) is re-entering the European market with a focus on hybrids and combustion-engine vehicles, aiming to double its overseas sales to 1 million vehicles by 2030, despite previous setbacks in the region [1]. Group 1: Market Strategy - GWM plans to establish a European factory with a production capacity of 300,000 cars per year by 2030, necessitating a nearly hundredfold increase in sales [1]. - The company aims to appeal to European markets by introducing a range of vehicles, including the Ora 5 electric vehicle and models from its Haval SUV brand, while also considering sedans and station wagons [1]. - GWM is focusing on enhancing resale values, which are crucial for European consumers, and is actively recruiting new dealers in the region [1]. Group 2: Competitive Landscape - The European market has evolved since GWM's initial entry in 2021, with other Chinese brands like BYD and Chery gaining traction, while European automakers are launching more affordable models [1]. - GWM's sales in Europe fell by 25.4% in 2024 and nearly 30% in 2025, totaling just 3,500 cars sold [1]. - The company faces a challenging environment as European brands have become more competitive, making it harder for GWM to regain market share [1]. Group 3: Sales Performance - GWM's total vehicle sales increased by 7.3% year-on-year to 1.32 million vehicles, with overseas sales rising by 11.7% to 506,066 vehicles, driven by growth in markets like Australia and Latin America [1]. - The U.S. market remains inaccessible for Chinese automakers, and limited access in India and Japan poses challenges for GWM in achieving its 2030 sales target without a strong presence in Europe [1]. - Analysts suggest that GWM's target of 1 million vehicles is pragmatic, provided the company maintains a consistent approach in the European market [1].

Financial Data and Key Metrics Changes - The company reported record revenues of $12.3 billion and non-GAAP earnings per share (EPS) of $3.50 for fiscal Q1 2026, with non-GAAP EPS at the high end of guidance [5][17] - QCT revenues reached a record $10.6 billion, with strong year-over-year growth across automotive and IoT segments [17] - Licensing business revenues were $1.6 billion, with an EBT margin of 77%, driven by higher units and favorable mix [17] Business Line Data and Key Metrics Changes - QCT handset revenues reached a record $7.8 billion, benefiting from recently launched flagship smartphones [17] - QCT IoT revenues grew 9% year-over-year to $1.7 billion, driven by demand across consumer and networking products [17] - QCT Automotive revenues grew to $1.1 billion, up 15% year-over-year, reflecting increased demand for Snapdragon Digital Chassis platforms [17] Market Data and Key Metrics Changes - Global consumer demand for handsets, particularly in the premium and high-tier segments, exceeded expectations, with healthy sell-through observed [5] - The handset industry is expected to face constraints due to memory availability and pricing, particularly DRAM, as suppliers redirect capacity to meet AI data center demand [5][6] Company Strategy and Development Direction - The company is focused on expanding its presence in the premium and high-tier smartphone segments, with a dual flagship product strategy that has seen broad OEM adoption [6][7] - The company is also investing in AI-native smartphones and intelligent wearables, positioning Snapdragon platforms as the choice for the industry [7][8] - In automotive, the company aims to reinforce its technology leadership with multiple design wins and collaborations with major automakers [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals of the handset business despite near-term challenges related to memory supply and pricing [19] - The company anticipates returning to prior growth trajectories for QCT handset revenues once memory supply normalizes [19] - Management remains optimistic about the long-term growth potential in automotive and IoT, with expectations for continued revenue acceleration [21] Other Important Information - The company completed the acquisition of Alphawave Semi, enhancing its high-speed wire connectivity technologies [15] - The company is actively engaging with leading hyperscalers and cloud service providers to develop data center solutions [14] Q&A Session Summary Question: What factors are driving the weakness in handset outlook beyond memory pricing? - Management indicated that the weakness is entirely related to memory availability, with strong microeconomic indicators and handset demand observed [26][27] Question: Is the automotive revenue growth driven by ADAS wins? - Management confirmed that the automotive pipeline continues to translate into revenue, with new car launches contributing to record revenues [29][30] Question: How is the company managing the memory supply situation? - Management clarified that they do not purchase memory directly but work closely with customers who do, ensuring flexibility with various memory providers [69][70] Question: What is the outlook for the data center business? - Management stated that progress is on track, with positive feedback from engagements with hyperscalers and cloud service providers [35][36] Question: How does the company view the impact of memory shortages on the overall handset market? - Management emphasized that the size of the handset market will be determined by memory availability, with expectations for premium and high-tier segments to remain resilient [40][76]

Financial Data and Key Metrics Changes - Lear Corporation reported a 5% increase in revenue for Q4 2025, totaling $23.3 billion for the full year [4] - Core operating earnings were $1.1 billion, representing 4.6% of net sales for the full year [4] - Adjusted earnings per share increased by 1% to $12.80, marking the fifth consecutive year of growth [4] - Operating cash flow was $1.1 billion, with free cash flow at $527 million for 2025 [4][5] Business Line Data and Key Metrics Changes - In the Seating segment, sales for 2025 were $17.3 billion, a slight increase of 0.4% from 2024, with adjusted operating margins at 6.4% [34][35] - E-Systems sales decreased by 2% to $6 billion, with adjusted earnings at $293 million, or 4.9% of sales [36][37] - The company secured over $1.4 billion in E-Systems business awards, the strongest performance in over a decade [8] Market Data and Key Metrics Changes - Global vehicle production increased by 1% year-over-year, with production volumes flat in North America and down 2% in Europe, while China saw a 3% increase [30] - Lear expects more than 50% of its revenue in China to come from domestic automakers next year [22] Company Strategy and Development Direction - Lear's strategic priorities include extending leadership in Seating, expanding margins in E-Systems, and supporting sustainable value creation through disciplined capital allocation [5] - The company is focused on innovation and technology, particularly in modularity and automation, to enhance manufacturing efficiency and product design [56][59] - Lear aims to achieve a seating market share of 29%, supported by strong relationships with both traditional and domestic Chinese automakers [60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow revenue, operating income, margins, and free cash flow in 2026 and beyond [47] - The company anticipates continued strong performance from its IDEA initiatives and digital transformation efforts, which are expected to drive future savings and operational improvements [64] - Management acknowledged the challenges posed by industry volatility but emphasized the company's solid foundation for growth [46] Other Important Information - Lear repurchased $325 million in shares during 2025, exceeding the initial target of $250 million, returning nearly $500 million to shareholders [10] - The company has a robust backlog of $1.325 billion, with significant contributions expected from new business awards in both Seating and E-Systems [24] Q&A Session Summary Question: Can you discuss the conquest win and its impact on seating share? - Management highlighted the significance of the conquest win as the largest in Lear's history, driven by innovation and technology, and expressed confidence in achieving a 29% seating market share [52][60] Question: What is the outlook for Net Performance in 2026? - Management indicated that they expect similar levels of Net Performance in 2026 as in 2025, with continued opportunities for savings from digital and automation initiatives [62][64] Question: How should investors think about earnings cadence throughout the year? - Management noted a strong start to the year, with expectations for Q1 revenues around $6 billion and operating income of approximately $260 million, despite some anticipated downtime [68][70] Question: Can you provide details on onshoring wins and their launch timing? - Management confirmed that the Orion award will benefit 2027, with limited additional onshoring activity expected until 2028 and 2029 [73][74] Question: What is the expected revenue impact of the large conquest win? - Management clarified that the large conquest win is outside the current backlog and is expected to launch in late 2028, potentially generating $400 million-$500 million in annual revenue [79][80]

Core View - Zenergy's FY25E net profit forecast is revised up by 4% to RMB591 million due to a better product mix, with expectations for continued positive trends into FY26E [1] - GAC Toyota is anticipated to become Zenergy's largest revenue contributor, surpassing Leapmotor [1] Group 1: FY25E Outlook - Zenergy's FY25E battery sales volume forecast is increased from 18.4 GWh to 19.6 GWh, driven by strong sales of the Toyota bZ3X BEV and IM LS6 EREV [2] - The average selling price (ASP) is expected to rise to RMB0.43/Wh in 2H25E from RMB0.41/Wh in 1H25 due to improved product mix [2] - Gross margin is projected to widen by 0.2 percentage points to 18.1% in 2H25E, contributing to an operating margin increase of 2.2 percentage points to 6% [2] Group 2: FY26E Outlook - Zenergy maintains a sales volume forecast of 30 GWh for FY26E, with an 8% revenue forecast increase to RMB14.6 billion due to a better client mix and potential battery price hikes [3] - Gross margin for FY26E is expected to widen by 0.5 percentage points to 18.5% [3] - FY26E net profit forecast is raised by 4% to RMB1.36 billion, while FY27E net profit is maintained at RMB1.88 billion [3] Group 3: Valuation - The company maintains a BUY rating and a target price of HK$18.00, based on a 22x FY27E P/E ratio [4] - This valuation is considered justified given the median FY27E P/E of 15x for peers and Zenergy's higher profit growth outlook [4]

Investment Rating - The report maintains a BUY rating for Zenergy, with a target price of HK$18.00, indicating a potential upside of 103.4% from the current price of HK$8.85 [3][6]. Core Insights - Zenergy's FY25E net profit forecast has been revised up by 4% to RMB591 million due to a better product mix and expected revenue growth from GAC Toyota, which is anticipated to become the largest revenue contributor [1][6]. - The FY26E net profit forecast has also been increased by 4% to RMB1.36 billion, driven by improved client mix and potential battery price hikes [1][6]. - The company is expected to achieve solid earnings visibility in the second half of FY25, with a projected operating profit of RMB302 million and a net profit of RMB370 million for that period [6][7]. Financial Summary - Revenue projections for FY25E are set at RMB8.2 billion, reflecting a year-on-year growth of 59.8%, while FY26E revenue is expected to reach RMB14.6 billion, a growth of 77.6% [2][10]. - Gross margin is projected to improve from 18.0% in FY25E to 18.5% in FY26E, supported by a better product mix and higher average selling prices [2][8]. - The company is expected to achieve a net profit of RMB1.88 billion by FY27E, with a corresponding EPS of 72.27 RMB cents [2][10]. Earnings Revision - The revenue forecast for FY25E has been increased by 6.9% to RMB8.2 billion, while FY26E revenue has been revised up by 8% to RMB14.6 billion [8][9]. - The net profit estimates for FY25E and FY26E have been adjusted upwards by 3.8% and 3.9% respectively, reflecting the positive outlook for the company's performance [8][9]. Market Performance - Zenergy's market capitalization stands at HK$22.61 billion, with an average turnover of HK$20.2 million over the past three months [4]. - The stock has shown a 7.0% increase over the past month, although it has declined by 13.2% over the past six months [5].

Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Electric Vehicles (EV) and New Energy Vehicles (NEV) - **Market Growth**: The overseas market is expected to be a significant growth area for China EV sales in 2026, with a projected **35% year-over-year (yoy) volume growth** [1][15]. Core Insights - **Price Competition Framework**: A framework was developed to assess potential price cuts in overseas markets based on three parameters: 1. Is the auto market in contraction? 2. Do Chinese OEMs have high penetration? 3. Is there excess production capacity? - Thailand is currently the only market exhibiting all three parameters, making it an exception rather than the norm for price competition [1][16][24]. - **Profitability in Overseas Markets**: Chinese OEMs, particularly BYD, are achieving significantly higher Average Selling Prices (ASP), gross margins, and unit profits in overseas markets compared to domestic sales. For instance, BYD's ASP is **50%-120% higher**, with gross margins **5-10% higher**, and unit profits **43%-420% higher** for the same models sold outside China [3][49]. - **NEV Market Penetration**: As China's NEV penetration reaches **60%** with a slowdown to **11% yoy growth** by 2026, overseas markets are entering a mass-adoption phase. The overseas NEV sales are expected to reach **7.4 million units** in 2026, with Chinese brands fulfilling **55%** of this volume [4][62][65]. Market Dynamics - **Thailand as a Case Study**: Thailand is highlighted as a key market for Chinese OEMs due to favorable local policies and cultural proximity. The market is projected to see **141,000 NEV sales** in 2025, with a **26% market share** for Chinese brands [17][18]. - **Price Cuts and Market Concerns**: Two rounds of price cuts in Thailand have raised concerns about a potential price war similar to that in China. The price cuts were driven by market contraction, high penetration of Chinese OEMs, and excess production capacity [31][39]. - **Future Risks**: If other overseas markets begin to exhibit similar conditions as Thailand, there could be a **16%-19% downside** to cash margins at 0% [2][12][44]. Investment Recommendations - **Recommended Stocks**: BYD and XPeng are identified as well-positioned for overseas growth due to their higher exposure to international markets and expanding sales networks [4][62]. Additional Insights - **Cyclical Nature of the Auto Industry**: The cyclical nature of the auto industry and potential changes in local production requirements could impact future pricing strategies and market dynamics [2][44][46]. - **Local Production Capacity**: Chinese OEMs are building localized production capacity to meet overseas demand, with expectations of **0.9 million** and **1.7 million** NEV production capacity overseas by the end of 2025 and 2026, respectively [4][62]. - **Competitive Landscape**: Chinese brands are gaining market share in various overseas markets, with significant growth in developed markets such as the UK, Spain, and Australia, where they achieved double-digit market share gains [75][76]. This summary encapsulates the key points discussed in the conference call, focusing on the dynamics of the Chinese EV market, particularly in relation to overseas expansion and competitive strategies.

Summary of Transition Investing Conference Call Industry Overview - The focus is on the **AI and Transition Investing** sectors, highlighting the intersection of AI with energy transition strategies, infrastructure, and defense. Key Points and Arguments AI Bubble Concerns - The percentage of investors viewing an "AI bubble" as the biggest growth tail risk decreased from **45% to 38%** in the latest Fund Manager Survey, indicating a shift in sentiment towards AI as a fundamental revolution rather than a speculative bubble [2][16][19]. Transition Investing as a Hedge - Transition strategies, including defense, infrastructure, and transition metals, are seen as resilient investments during AI-driven market fluctuations, attracting approximately **$40 billion** in inflows in **2025** [3][50]. - These sectors are supported by over **$1 trillion** in national security commitments and a push for energy independence, with correlations to AI returns remaining below **50%** [3][50]. Clean Energy and AI Correlation - The correlation between AI and clean energy surged from **-10% to +65%** year-over-year, raising concerns about downside risks if an AI bubble bursts [4][37]. - Hyperscalers, which account for about **70%** of US clean power deals, are driving this correlation, indicating a significant link between AI demand and clean energy investments [4][35]. AI Investment Projections - BofA Global Research estimates AI-related capital expenditures will exceed **$1.2 trillion** by **2030**, tripling from **2025** levels [5][76]. - Hyperscalers' capital expenditures are projected to reach **$400 billion** in **2025** and **$510 billion** in **2026**, with near-zero data center vacancy rates indicating strong infrastructure demand [76][83]. Infrastructure and Energy Transition - The demand for AI is reshaping the energy landscape, with forecasts of **$150 billion** in AI infrastructure capex by **2028** and a significant need for critical metals like copper and lithium [6][89]. - The electrification of transport and industry is expected to drive major investments in energy storage and grid infrastructure, with the IEA forecasting **4,600 GW** of new renewable capacity over the next five years [53][61]. Selective Positioning in Investments - The report emphasizes the importance of selective positioning in high-quality, low-AI-beta companies across various sectors, including energy efficiency and battery materials, to navigate potential market turbulence [7][73]. Defense Sector Growth - Defense budgets are expanding significantly, with the EU planning to allocate **€800 billion** over the next decade and Japan's defense budget projected to increase by **4% YoY** [70][71]. - Investment in advanced defense technologies is expected to drive demand for next-generation technologies, indicating a structural trend in the defense sector [71]. Metals Demand - The demand for metals, particularly copper, is projected to increase due to the construction of power generation capacity and data centers, with copper prices reaching an all-time high of **$11,104/ton** in **2024** [105]. - Other base metals like tin are also expected to see growth, correlating closely with semiconductor sales as AI adoption accelerates [106]. Additional Important Insights - The report highlights the systemic nature of transitions, emphasizing that not all transitions are immune to AI's volatility, necessitating a careful approach to investment strategies [33][49]. - The need for reliable, low-carbon power sources is becoming increasingly critical as AI demand grows, with nuclear power playing a significant role in meeting these needs [35][36]. This summary encapsulates the key insights and projections discussed in the conference call, providing a comprehensive overview of the current landscape in AI and transition investing.

Summary of Key Points from the Conference Call Industry Overview: Greater China Auto, EV, and EV Battery Industry Forecasts - **China's Auto Industry**: Expected to face challenges in 2026 with a forecasted decline in auto wholesales by **1.6% YoY** compared to a **10% YoY** increase in 2025. This decline is attributed to front-loaded demand in 2025 [1] - **Domestic EV Sales**: Anticipated to grow only **7% YoY** in 2026 due to a **5% increase in purchase tax** and reduced trade-in subsidies [1] - **Export Sales**: Projected to increase by **12% YoY**, reaching **7.9 million units** in 2026, with EV exports expected to surge by **40% YoY** [1] - **Competition Dynamics**: Shift from price competition to configuration-based competition, necessitating more investment in autonomous driving (AD) and smart cabin technologies [1] Key Automotive/EV Themes for 2026 Theme 1: Export Growth - **Export Growth**: Companies like Chery and BYD are expected to benefit significantly from exports, especially with the EU's minimum EV price replacing tariffs [2] Theme 2: Autonomous Driving Development - **ADAS to AD Transition**: L3 permits issued to Changan and BAIC, with highway/city NOA penetration expected to exceed **40%** in 2026 and **85%** by 2030. L4/L5 penetration is projected to reach **8%** by 2030 [3] Theme 3: Cost Concerns - **Battery and Memory Costs**: Rising costs and supply stability of memory are key concerns for auto OEMs [3] Key Battery Themes for 2026 Theme 1: Energy Storage Systems (ESS) - **ESS Demand**: Global battery ESS installations expected to grow by **33% YoY** in 2026, with shipments increasing by **41% YoY** [4] Theme 2: Global Expansion - **Overseas Capacity Expansion**: Chinese battery manufacturers are accelerating their overseas capacity expansion, particularly in Europe and Southeast Asia, in response to rising tariffs and trade tensions [4] Theme 3: VAT Rebate Changes - **Export VAT Rebate Cut**: Anticipated to lead to a rush in battery production and shipment in Q1 2026, potentially increasing raw material prices and exerting cost pressure on battery makers and auto OEMs [5] Theme 4: Technological Innovation - **Sodium-Ion Battery**: Launch of Gen-2 sodium-ion battery expected, with ASSB (all-solid-state battery) small-batch production anticipated to start in 2027 and scale up significantly post-2029 [5] Investment Recommendations - **Top Picks**: - **XPeng**: Launch of Mona SUV and HR in 2H26, with a focus on AI-related businesses [6] - **CATL**: Growth driven by CEV, ESS, and overseas capacity despite short-term cost pressures [6] - **Tuopu**: Major supplier for humanoid robots with overseas expansion [6] - **Minth**: Resilient earnings growth supported by high overseas market exposure [6] - **Hesai**: Increased LiDAR adoption in China alongside L3 ADAS development [6] Additional Insights - **Market Dynamics**: The shift in competition and the focus on technological advancements highlight the evolving landscape of the automotive and EV sectors in China, emphasizing the need for companies to adapt to changing consumer preferences and regulatory environments [1][3][4][5]

Summary of Key Points from China Automobiles 2026 Management Outlook Call Series Industry Overview - The call series involved discussions with six OEM companies, two suppliers, and one dealer in the Chinese automobile industry, including SAIC, GAC, Xiaomi Corp., Leapmotor, Great Wall, and Seres [1] - Four key themes emerged regarding the outlook for the Chinese auto industry in 2026: 1. Conservative views on industry volume 2. Forecasts of double-digit volume growth with a focus on overseas expansion 3. An aggressive new model pipeline, particularly in the premium segment 4. Potential pricing and margin pressures across the auto value chain [2] Company-Specific Insights Management Outlook 1. **Conservative Volume Expectations**: Management teams expect a year-over-year growth of -5% to +1% for domestic passenger vehicle retail sales in 2026, with a projected 10% increase in NEV retail sales. The total amount of auto trade-in subsidies is expected to decrease to approximately Rmb250 billion in 2026 from Rmb300 billion in 2025 [5][16] 2. **OEM Volume Growth Forecasts**: All six OEMs anticipate volume growth ranging from 11% to 68% in 2026, with a strong emphasis on overseas expansion, targeting growth rates of 19% to 108% in international markets [5][7] 3. **New Model Pipeline**: A total of 119 new models are expected to be launched in 2026, with the premium segment becoming increasingly competitive. The breakdown includes 46 models in the mass market, 37 in the mid-to-high end, and 36 in the premium market [8] Company-Specific Projections - **SAIC**: Targets over 5 million units in deliveries, implying an 11% year-over-year growth, with a focus on launching more than 10 new models overseas [15][17] - **GAC**: Expects a 20% growth in volume, driven by its own brands and exports, with plans to launch 9 new models domestically and 8 overseas [20] - **Xiaomi**: Aims for 550,000 units in deliveries, a 34% increase from 2025, supported by new model launches and increased manufacturing capacity [19][21] - **Leapmotor**: Targets 1 million units in 2026, with a focus on NEV penetration reaching 60% [22] - **Great Wall**: Projects 1.8 million units in deliveries, a 50% increase from 2025, with limited price competition expected overseas [8] Market Dynamics - **Domestic Market Pressures**: The domestic market is expected to face contraction in profit pools, with a forecast of 23 million passenger vehicle retail sales (-2% year-over-year) and 14 million NEV retail sales (+11% year-over-year) [7] - **Export Opportunities**: The export market is seen as a bright spot, with an estimated 7.4 million passenger vehicle exports (+10% year-over-year), primarily driven by NEV exports [7] - **Pricing and Margin Pressures**: OEMs are facing gross profit margin pressures due to factors such as purchase tax refunds and the launch of lower-priced models. Suppliers expect to maintain stable margins despite these pressures [8] Additional Insights - **Technological Developments**: GAC is collaborating with CATL to develop solid-state battery technology, with expectations for mass production by 2027-28 [20] - **Market Competition**: The premium segment is becoming more crowded, with significant competition expected in the Rmb250k-300k price range [8] This summary encapsulates the key insights and projections from the China Automobiles 2026 Management Outlook Call Series, highlighting the cautious yet ambitious outlook of various companies within the industry.