Core Viewpoint - The euro has recently strengthened against the dollar, surpassing the 1.17 mark, reaching a three-year high, which presents a significant opportunity for companies engaged in foreign trade to increase profit margins through currency exchange [1][3]. Group 1: Euro to Dollar Exchange Rate - As of June 30, 2025, the euro has broken through the 1.17 level against the dollar, marking the highest point since September 2021, with an annual increase of over 10% [3]. - The weakening of the dollar is attributed to rising expectations of interest rate cuts by the Federal Reserve (projected at 60 basis points) and uncertainties surrounding Trump's tariff policies, with a critical date on July 9 [3]. - Institutions like UBS and HSBC predict a bullish outlook for the euro, targeting 1.20 by the end of the year, which could result in an additional 2.2%-2.5% increase in revenue for orders settled in euros compared to those in dollars [3]. Group 2: Strategies for Euro Settlement - Companies are advised to prioritize euro settlements when negotiating new orders, clearly indicating "EUR pricing" in quotes [4]. - For existing dollar-denominated contracts, firms should negotiate to switch to euro settlements, potentially offering discounts to facilitate this change [4]. - For larger order amounts, it is recommended to use "cap and floor" options to hedge against potential currency reversal risks [4]. Group 3: Risk Management and Market Trends - Institutions forecast a long-term bullish trend for the euro, although short-term corrections may occur; thus, companies should be cautious of blindly chasing profits [4]. - It is crucial to monitor the July 9 tariff decision, as any tariffs imposed by Trump on the EU could lead to a sharp decline in the euro to around 1.10, necessitating preemptive planning [4]. - Companies should avoid "naked exposure" to currency fluctuations, especially given the rapid appreciation of the euro, and consider retaining some dollar income to naturally hedge against double currency losses [4].

Core Viewpoint - The New Taiwan Dollar (NTD) experienced a significant rebound, rising over 2% and achieving its largest single-day appreciation since early May, following aggressive currency purchases by public banks to prevent further appreciation [1] Group 1: Currency Movement - The NTD opened sharply higher, closing at 29.185 against the US dollar, reflecting a 2.4% increase [1] - The previous day, the NTD had a dramatic decline, falling by 2.5%, marking its largest single-day drop in over 20 years [1] Group 2: Market Volatility - The currency market has seen intense fluctuations over the past two days, indicating a period of high volatility [1] - The sharp movements in the NTD highlight the impact of government intervention in currency markets [1]

Economic Overview - In Q1 2025, the US economy showed a complex picture with a GDP decline of 0.5% on a seasonally adjusted annual rate, marking the first quarterly negative growth in nearly three years [1] - The decline was primarily driven by a sharp drop in private consumption growth to 0.5%, the lowest in five years, along with reduced federal spending and increased imports [1] - Despite the decline, the revised GDP data indicated a total GDP of $7.49 trillion, maintaining the US's position as the world's largest economy, accounting for 26% of global GDP [1] Comparison with China - China's Q1 GDP reached approximately $4.44 trillion, maintaining its status as the second-largest economy, but the proportion of China's GDP to the US GDP fell to 59%, down from 77% in 2021 [1][3] - China's GDP growth was 5.4% year-on-year, significantly higher than the US's 2% growth, but the nominal GDP growth and GDP increment were lower than the US due to differing inflation levels [3] Inflation and Monetary Policy - The differing inflation levels between the US and China have a direct impact on GDP increments, with the US maintaining high interest rates while China has been lowering them [3] - As of March 2025, the US CPI increased by 2.4%, while China's CPI decreased by 0.1%, highlighting the contrasting price levels in both countries [3] Currency Exchange Rate Impact - The depreciation of the Chinese yuan against the US dollar is a critical factor, with the average exchange rate in Q1 2025 at 7.176, leading to a reduction of approximately $500 billion in China's GDP when converted to dollars [5] - If the exchange rate had remained stable, China's GDP proportion could have risen back to around 60% [5] Statistical Methodology Differences - There are significant differences in GDP calculation methods between the two countries, with China using the production method and the US using the expenditure method, leading to discrepancies in reported GDP figures [7] - For instance, in Q1 2025, the US real estate sector contributed $943 billion to GDP, while China's contribution was only $360 billion, reflecting the US's highly financialized economy compared to China's manufacturing-driven economy [7]

Group 1 - The "2025 China Enterprises Going Global Summit" was held in Shenzhen, focusing on providing a high-end platform for Chinese companies to address challenges in international expansion and explore win-win transformation paths amid global supply chain restructuring [1] - The summit was co-hosted by the Global Council for Chinese Enterprises Going Global, emphasizing the theme "For an Open World" [1] Group 2 - Zhaoxiping, General Manager of Shenzhen Anya Electronic Technology Co., Ltd, highlighted two major risks for companies expanding into overseas markets, particularly Africa [3] - Currency fluctuation is the primary risk, with an example showing that the exchange rate of the Nigerian Naira to the US Dollar changed from approximately 1:300 in 2018-2019 to a peak of 1:1800 post-pandemic, potentially leading to a 3-4 times loss in book value for companies [3] - Zhaoxiping emphasized that companies typically lack sufficient profit margins to offset such losses, requiring a fivefold return on investment to compensate for currency losses [3] - Personal safety risks are also significant, with expatriates facing local security issues such as extortion and kidnapping, as well as health threats like malaria due to inadequate local medical facilities [3] - Companies are advised to assess the political stability of target countries before entering, using Nigeria as an example where despite lucrative opportunities in certain products, the overall investment environment remains challenging [3]

Group 1 - The core viewpoint is that Treasury Secretary Yellen commented on the discussions surrounding the Federal Reserve's "shadow chair" concept, indicating uncertainty about who is discussing this issue [1] - Chair Powell is not required to leave his position, and he may continue to serve as a Federal Reserve governor after his term ends in 2026 [1] - Currency fluctuations are considered a normal occurrence in the financial landscape [1]

周五（6月27日），韩元兑美元最终跌0.57%，报1361.07韩元，本周累计上涨0.69%，周二至周五持续高 位震荡。 ...

Group 1 - The Central Bank of Taiwan has requested foreign investors to withdraw speculative bets on the New Taiwan Dollar (TWD) through ETFs, indicating a crackdown on such activities [1] - The strategy employed by foreign investors involves buying both Taiwanese stock ETFs and inverse ETFs, which allows them to profit from market declines while betting on the appreciation of the TWD [1][2] - The holdings of foreign investors in Taiwan's largest inverse stock ETF have surged to 914.7 million shares, an increase of over 90 times since the beginning of the year [2] Group 2 - The TWD has appreciated by 12% against the US dollar this year, with a significant single-day increase recorded last month, the largest since 1980, posing risks to the export-oriented economy [2] - A regulatory framework exists to limit speculative behavior by foreign investors, requiring that their holdings in any single inverse ETF remain below 30% to prevent currency manipulation [5] - The Central Bank can influence onshore banks through "window guidance," but has limited direct control over offshore investors [5]

Core Viewpoint - TSMC is injecting $10 billion into its overseas subsidiary to hedge against currency risks, marking its largest capital operation to date aimed at reducing foreign exchange hedging costs and enhancing capital flexibility in managing currency risks [1][3]. Group 1: Capital Injection Details - TSMC Global Ltd. has approved a plan to issue new shares worth $10 billion to its parent company, aimed at increasing capital to lower foreign exchange hedging costs [1]. - This capital injection is primarily for general investments, including bank deposits and bonds, and is intended to transfer TSMC's foreign exchange holdings to its subsidiary [3]. - This marks TSMC's third similar operation since 2024, with the scale significantly exceeding previous injections, all occurring during periods of New Taiwan Dollar appreciation [3]. Group 2: Currency Risk Management - The capital injection will provide TSMC Global with greater capital flexibility to manage currency risks, particularly in light of the recent strengthening of the New Taiwan Dollar [3]. - The strengthening of the New Taiwan Dollar has raised concerns about the export-oriented economy of Taiwan, impacting TSMC's operating profit margins by several percentage points [2][7]. - TSMC's CEO has indicated that the strong local currency has directly affected the company's commercial performance, highlighting the impact of currency fluctuations on profitability [7]. Group 3: Market Context - The New Taiwan Dollar has recently shown strong performance, with significant fluctuations leading to increased hedging costs, reaching the highest implied volatility levels since 2011 [4]. - The appreciation of the New Taiwan Dollar negatively affects Taiwanese exporters, as it reduces the amount of local currency received from overseas sales or necessitates higher prices abroad, risking demand decline [7].

Investment Rating - The report maintains an investment rating of "A" for the textile and apparel industry, indicating a performance in line with the market [1]. Core Insights - The e-commerce "618" shopping festival saw a total sales volume of 855.6 billion yuan, representing a year-on-year growth of 15.2% [3][19]. - The overall transaction volume across major platforms during the "618" period increased by 10.4%, with notable growth in beauty products and significant performance from platforms like Douyin and Kuaishou [4][12]. - The textile and apparel sector's retail sales showed a recovery, with a year-on-year increase of 6.4% in May 2025, and a cumulative growth of 3.3% from January to May 2025 [12][54]. Summary by Sections E-commerce "618" Sales Data - The total e-commerce sales during the "618" festival reached 855.6 billion yuan, with instant retail sales at 29.6 billion yuan and community group buying at 12.6 billion yuan [3][19]. - Major platforms like Taobao, JD, Douyin, Pinduoduo, and Kuaishou reported year-on-year growth rates of 9.2%, 9.0%, 15.2%, 8.9%, and 10.6% respectively [4][19]. - The beauty segment on major platforms achieved a total GMV of 65.9 billion yuan, with Taobao maintaining a 41.3% market share [4][20]. Market Performance - The SW textile and apparel sector experienced a decline of 5.12% in the week of June 16-20, 2025, underperforming the broader market [9][22]. - The PE-TTM ratios for various sub-sectors indicate that textile manufacturing is at 19.36 times, apparel and home textiles at 25.64 times, and jewelry at 30.22 times, reflecting varying levels of valuation [30][22]. Industry Dynamics - The textile and apparel retail sector is showing signs of recovery, with a notable increase in retail sales and a strong performance in sports and entertainment products, which grew by 25.7% year-on-year [12][55]. - The report highlights the collaboration between Uniqlo and Pop Mart's IP "THE MONSTERS," indicating a trend towards brand collaborations to enhance market presence [7][65]. Company Highlights - The report notes that Lao Pu Gold, referred to as the "first stock of ancient gold," is expanding globally with its first overseas store opening in Singapore [11][69]. - The report emphasizes the significant growth in sales for brands like FILA, which surpassed Nike in the sports outdoor sector during the "618" sales period [12][20].

Core Viewpoint - TSMC faces significant challenges due to external factors, including potential revocation of exemptions for its mainland China operations and a strong appreciation of the New Taiwan Dollar, which is expected to impact its profit margins and earnings significantly [1][2][3] Group 1: Financial Impact - TSMC's gross margin and operating margin are projected to decline by nearly 5 percentage points due to the strong appreciation of the New Taiwan Dollar, which has risen 12% this quarter [1][2] - The market's previous expectation for TSMC's gross margin to challenge around 58% in the second half of the year has been revised down to approximately 55% due to currency fluctuations and initial yield adjustments for 2nm production [1][2] - TSMC's revenue target for the current quarter is set between $28.4 billion and $29.2 billion, with an expected quarter-on-quarter growth of nearly 13%, although the strong currency may hinder achieving higher profit growth compared to the previous quarter [2] Group 2: Market Expectations - Analysts predict that TSMC's earnings for the current quarter may only match or slightly decrease from the previous quarter, with an estimated earnings per share of NT$13, still surpassing the same period last year [2] - Historical data indicates that TSMC's second-quarter earnings have been better than the first quarter about 50% of the time over the past eight years, but there have been instances in recent years where second-quarter earnings declined compared to the first quarter [2] Group 3: Regulatory Environment - Reports suggest that the U.S. may revoke exemptions for TSMC, Samsung, and SK Hynix regarding the acquisition of U.S. technology for their mainland China operations, which could impact TSMC's order intake from China [3]