Financial Data and Key Metrics Changes - Total sales for Q2 2025 reached $238 million, representing a 10% year-over-year increase or 5% growth excluding Smart Cover sales of over $10 million [6][11] - Operating earnings increased by 8% year-over-year to $44.9 million, with operating margins slightly down to 18.8% from 19.2% in the prior year [7][11] - Gross margins expanded by 170 basis points to 41.1% from 39.4% in the prior year quarter, although this was a sequential decline from 42.9% in Q1 2025 [8][10] - Free cash flow increased by 19% year-over-year to $40.6 million, driven by higher earnings and improved working capital [11] Business Line Data and Key Metrics Changes - Utility water product line sales increased by 11% year-over-year or 6% excluding Smart Cover [6] - Sales for flow instrumentation product line remained flat year-over-year due to lower demand in certain market applications [7] Market Data and Key Metrics Changes - The competitive landscape is viewed as level, with ongoing trade uncertainties impacting tariff-related costs [10] - The company continues to see strong customer demand and momentum in technology adoption trends within the water industry [5][16] Company Strategy and Development Direction - The launch of BlueEdge aims to unify a comprehensive suite of products for managing water and wastewater systems beyond the meter, with positive reception at industry events [12][13] - The company is focused on long-term growth, expecting high single-digit revenue growth driven by favorable industry fundamentals and customer demand trends [16][17] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about navigating macroeconomic uncertainties while supporting long-term customer goals [5] - Despite expected sequential sales decline in Q3 2025, year-over-year growth is still anticipated excluding Smart Cover [15] - The company emphasizes the importance of the meter as a critical investment for utilities, reinforcing confidence in sustained demand [16] Other Important Information - The company is on track to deliver anticipated sales and cost synergies from the Smart Cover acquisition, with a focus on leveraging existing resources [17][68] - The recently published sustainability report highlights achievements in greenhouse gas reduction and financial performance [18] Q&A Session Summary Question: Inquiry about SG&A expense increase - Management acknowledged the increase in SG&A expenses due to the full quarter of Smart Cover and a unique deferred compensation expense, indicating ongoing investments to support growth [21][22][23] Question: Clarification on deferred compensation impact - Management clarified that while the deferred compensation expense was unique to the quarter, some impact would remain due to stock price fluctuations [32][33] Question: Comments on AMI project timing and municipal activity - Management noted that project timing can be uneven, but the demand for new projects remains strong, with no long-term concerns about growth [44][45] Question: Impact of potential EPA budget cuts - Management expressed confidence that utilities will continue to prioritize investments in metering regardless of potential funding cuts, citing various funding mechanisms available [70][71]

Core Viewpoint - General Motors Co reported better-than-expected revenue and earnings, yet its shares declined significantly in early trading, indicating market concerns despite positive financial results [1][3]. Financial Performance - The company achieved revenues of $47.12 billion, a decrease of 2% year-on-year, but exceeded market expectations of $45.84 billion due to strong vehicle demand and stable pricing [1][2]. - Earnings per share were reported at $2.53, surpassing the consensus estimate of $2.34, despite facing a $1.1 billion impact from tariffs [2]. Tariff Impact and Mitigation - The tariff impact is anticipated to be greater in the latter half of the year compared to the first half, but the company is making progress in mitigating at least 30% of these costs through manufacturing adjustments and targeted cost initiatives [2]. - Management has reiterated its full-year guidance for both revenue and earnings, focusing on ramping up deliveries of new models while stabilizing the bottom line [3]. Stock Performance - Shares of General Motors experienced a decline of 7.33%, trading at $49.31 at the time of publication [3].

Investment Rating - The report does not explicitly provide an investment rating for the industry or specific companies Core Insights - The Japanese stock market is currently facing potential impacts from new tariffs, with a 25% tariff on Japanese goods set to take effect on August 1, 2025, which may lead to downward revisions in company guidance and affect share prices [1][2] - The earnings reporting season for Q1 FY25 is beginning, with expectations of a 21% year-on-year decline in recurring profits, followed by a flat Q2 and a further 14% decline in Q3 [5][11] - There is a notable correlation between changes in foreign ownership ratios and share price performance, with foreign ownership at 32.4% at the end of FY24, the highest since records began [15][16] Summary by Sections Tariff Impact and Market Reactions - The report highlights that share prices in sectors sensitive to tariffs, such as transportation equipment and pharmaceuticals, have suffered, while semiconductor stocks have gained [2] - Companies like Yaskawa Electric have faced significant share price declines after failing to adjust guidance in light of tariff impacts, indicating that investors should be cautious of similar occurrences in upcoming results announcements [2][12] Earnings Forecasts and Market Sentiment - Consensus forecasts for Q1 FY25 indicate a sharp decline in profits, with expectations for Q2 remaining unusually optimistic despite the anticipated downturn [5][11] - The report notes that share prices tend to react negatively to downward revisions in company guidance, suggesting that the market has not fully priced in the risks associated with potential tariff impacts [12][13] Foreign Ownership and Investment Indicators - The report discusses the changes in foreign ownership ratios, which have increased for certain sectors while decreasing for others, indicating a potential shift in investor sentiment [15][16] - Key indicators for investment opportunities include high return on equity (ROE), cash reserves, share buyback history, and low price-to-earnings (P/E) ratios, with many companies currently meeting these criteria [17][24]

Investment Rating - The report does not explicitly state an investment rating for the oil industry in China Core Insights - Chinese apparent oil demand showed year-on-year growth for the first time in three months, increasing by 160 thousand barrels per day (kb/d) to 15.9 million barrels per day (mb/d) in May, driven by strong demand for petrochemicals and travel fuels during the Labour Day holiday [3][6] - Crude imports fell by 720 kb/d month-on-month (MoM) and 90 kb/d year-on-year (YoY) in May, attributed to peak refinery maintenance and high inventory levels [52][61] - Refinery throughput decreased by 200 kb/d MoM, with offline capacity reaching 2.1 mb/d due to maintenance at major state-owned refiners [5][64] - Diesel demand weakened, falling by 60 kb/d MoM and 220 kb/d YoY, influenced by the penetration of new energy vehicles (NEVs) and a struggling real estate sector [12][15] - Jet fuel demand rose by 55 kb/d MoM, supported by increased travel during the Labour Day holiday, although it was down 120 kb/d YoY [26][34] Summary by Sections Supply and Demand - Chinese apparent oil demand increased by 1% YoY in May, with strong naphtha demand as refiners replaced US LPG and ethane imports [3][6] - Crude imports softened further in May, with Iranian crude imports dropping by 40% MoM due to sanctions risk and high inventory levels [4][53] - Refinery throughput fell by 200 kb/d MoM, with all major state-owned refiners offline during peak maintenance [5][64] Product Exports and Imports - Refined product net exports weakened in May, with diesel exports reduced due to strong domestic margins [6][67] - Total product exports fell by 180 kb/d MoM and 220 kb/d YoY, driven by lower gasoline and fuel oil exports [68][93] - LPG imports decreased by 230 kb/d MoM due to a 125% tariff on US LPG, which was later reduced to 10% [76][41] Inventory Data - Crude stocks built rapidly in May, adding approximately 33 million barrels due to low refinery demand [156] - Observable product inventories drew by around 20 million barrels in May, with significant draws in diesel and gasoline stocks [157][161] Refining Data - Gasoline cracks averaged $14.0/bbl in May, down $2.0/bbl from April, while diesel cracks rose to $21.4/bbl [112][113] - Refinery output of diesel and gasoline declined in May, with jet fuel output increasing due to higher demand [141][147] Trade Quotas - China has released two batches of clean product export quotas for 2025, totaling 31.8 million tons, slightly lower YoY [98][100] - The allocation of quotas primarily favors state-owned companies, with Sinopec and PetroChina receiving about 72% of available quotas [98][100]

Investment Rating - The report upgrades Gambol from Neutral to Buy, with a revised target price (TP) of Rmb120, indicating a 25% upside from the closing price on July 10 [9][33]. Core Insights - The pet food industry is experiencing significant growth, with Gambol's domestic sales expected to rise by 32% year-on-year in 2Q25, while the overall market remains fragmented, presenting opportunities for market share gains [2][9]. - The report anticipates a 19% year-on-year growth in Gambol's topline for 2Q25, driven by strong domestic performance despite challenges in overseas markets due to tariffs [1][11]. - New product development and domestic margin expansion are critical for future growth, with Gambol's innovative product offerings expected to capture market share from long-tail brands [3][8]. Summary by Sections Company Performance - Gambol's stock price has declined by 25% since the downgrade to Neutral, but the report suggests this correction is overdone, providing a favorable entry point for investors [2]. - The company is expected to achieve a net profit (NP) growth of -2% year-on-year in 2Q25, primarily due to increased expenses related to staff incentives and new factory depreciation [1][11]. Market Dynamics - The pet food market is characterized by a trend towards premiumization, with established brands like Gambol and China Pet Foods leading in sales growth [8][13]. - The report notes that long-tail brands represent 70% of the market share, indicating a potential for consolidation as consumers increasingly focus on food quality and functionality [2][9]. Financial Projections - For 2025E, Gambol's domestic revenue is projected to grow by 34% year-on-year, with a domestic net profit margin (NPM) expansion of 1.2 percentage points [32]. - The report revises the net income estimates for covered pet food companies by 0-5% to account for tariff impacts, while maintaining a positive outlook on Gambol and China Pet Foods [9][32].

Core Insights - Jewett-Cameron Trading Company Ltd. reported a significant decline in revenue and net loss for Q3 2025, primarily due to the impact of tariffs on imported metal products and supply chain disruptions [1][9][12]. Operational Highlights - The company experienced a 21% decrease in total revenue for Q3 2025, amounting to $12.6 million compared to $15.9 million in Q3 2024, largely due to deferred purchases by retailers amid tariff uncertainties [6][9]. - Sales of Lifetime Steel Posts® products grew by 85% compared to Q3 2024, driven by the rollout of displayers, which increased by approximately 88% since November 2024 [6][9]. Tariff Impact and Response - The company faced increased tariffs on Chinese goods, with a 25% tariff implemented in 2019 and further increases announced in 2025, leading to a 50% global tariff on steel and aluminum imports as of June 2025 [3][4]. - Retailers have deferred purchases of imported metal products due to tariff volatility, causing significant turmoil in the company's markets and stressing logistics [4][5]. - The company is diversifying suppliers to mitigate tariff impacts and is implementing price increases across its product portfolio to align with rising costs [7][8]. Financial Results - Gross profit margins decreased to 15.0% in Q3 2025 from 18.6% in Q3 2024, attributed to higher tariff and shipping costs, as well as a shift towards lower-margin products [10]. - Operating expenses decreased to $2.6 million in Q3 2025 from $2.9 million in Q3 2024, due to operational efficiency initiatives and a 20% workforce reduction [11]. - The net loss for Q3 2025 was $(0.6) million, or $(0.18) per share, compared to a net income of $0.2 million, or $0.04 per share, in Q3 2024 [12][20]. Strategic Initiatives - The company is developing multi-source, multi-country strategic sourcing partnerships to reduce dependence on high-tariff countries and enhance production flexibility [7]. - Initiatives to improve operational efficiency and customer satisfaction are being enacted, including process improvements and technology enhancements [7][8].

Core Insights - US inflation may be quietly rising as companies gradually pass higher import costs onto consumers, with a focus on upcoming consumer inflation and retail data [1] - The core Consumer Price Index (CPI) is expected to rise by 0.3% month-over-month in June, the highest increase in five months, with a year-over-year increase projected at 2.9%, marking the first rebound since January [1][2] - Analysts anticipate cumulative inflation pressure as companies adjust pricing in the second half of the year, despite limited tariff transmission reflected in June data [2] Inflation Dynamics - The transmission of price changes is uneven, with certain goods experiencing tariff impacts while service prices remain soft, indicating a mixed inflation landscape [2] - Consumer sensitivity to prices is heightened due to a cooling job market and slowing wage growth, complicating retailers' decisions on price increases [2] - The tug-of-war between corporate pricing strategies and consumer resilience adds complexity to the Federal Reserve's policy decisions, with upcoming meetings set to consider these inflation trends [2] Retail Sales Data - Following the CPI report, the US Commerce Department will release June retail sales data, which is expected to show a slight rebound after two months of decline [3] - Weak consumer spending aligns with a cooling job market, and lackluster retail sales data could support the narrative of a "soft landing" for the US economy [3] - Together, the CPI and retail sales data will provide insights into the current state of the US economy at the intersection of inflation and growth, particularly in light of the evolving tariff policies [3]

Investment Rating - The report assigns a "Buy" rating to Midea, Gree, Haier, and Hisense, indicating a positive outlook for these companies in the white goods sector [27][28]. Core Insights - The white goods industry is expected to show resilience with a projected revenue growth of +9% and net profit growth of +11% year-over-year for the covered companies in 2Q25, driven by domestic demand and trade-in programs [1][25]. - Midea is highlighted as the leading player in the market, benefiting from a diversified revenue base and strong profitability, while facing manageable competition from smaller players [1][6]. - The report anticipates that domestic demand will become a more significant growth driver, particularly supported by trade-in programs and promotional events like "618" [1][5]. Summary by Sections Domestic Market Dynamics - Domestic demand is expected to accelerate in 2Q25, following a brief slowdown earlier in the year, with trade-in programs resuming and promotional events boosting sales [1][5]. - The National Development and Reform Commission (NDRC) plans to disburse trade-in subsidies starting in July, which is expected to stabilize funding and support growth [1][5]. Competitive Landscape - Increased competition in the online channel is noted, particularly from smaller players like Xiaomi, which may impact revenue growth and margins for these companies [1][4]. - Despite the competition, the report suggests that the risk of a full-blown pricing war is limited, as premium products continue to grow faster than entry-level offerings [1][4]. Company Performance Expectations - Midea, Haier, and Gree are expected to report approximately 10% revenue growth and 10%-12% net profit growth in 2Q25, while Hisense is projected to face more challenges due to a slowdown in its central AC business [4][24]. - The report fine-tunes earnings forecasts for the covered companies, adjusting estimates by -6% to 2% to reflect recent operational data [4][21]. Price Target Revisions - Price targets for the covered companies have been revised down by -11% to 2% to reflect changes in earnings per share (EPS) and target multiples [21][27]. - Midea is expected to maintain its leading position due to its diversified revenue streams and strong market presence, while Gree is anticipated to benefit from strong domestic demand for air conditioning [6][27].

Investment Rating - The report maintains an Overweight (OW) rating on US stocks, Treasuries, and US Investment Grade Corporate Credit, emphasizing a focus on quality assets [3][4][5]. Core Insights - The report indicates a global growth slowdown, forecasting a decline from 3.5% in 2024 to 2.5% in 2025, with the US experiencing a drop in real GDP growth from 2.5% in 2024 to 1.0% in both 2025 and 2026 [1][7]. - The impact of tariffs is highlighted as a structural shock to the global trading order, affecting demand and supply across various economies, particularly in the US and China [1][7]. - Despite the anticipated slowdown, the report suggests that risk assets may perform well as markets adjust to less severe growth expectations [2][3]. Economic Forecasts - Global GDP growth is projected at 2.5% for 2025, with the US at 1.0%, Euro Area at 0.8%, Japan at 0.3%, and Emerging Markets (EM) at 3.8% [8]. - Inflation rates are expected to be 2.1% globally and 3.0% in the US for 2025, with a gradual decline in subsequent years [8]. Sector Recommendations - In the US, the report favors quality cyclicals, large caps, and defensives with lower leverage and cheaper valuations [5]. - For Japan, the focus is on domestic reflation and corporate reform beneficiaries, while in Europe, the report recommends a shift towards resilient sectors such as defense, banks, software, telecoms, and diversified financials [5]. - Emerging Markets are recommended to focus on financials and profitability leaders, with a preference for domestic-focused businesses over exporters [5]. Market Valuations - The report provides specific price targets and P/E ratios for major indices, including S&P 500 at 6,500 with a P/E of 21.5x, MSCI Europe at 2,250 with a P/E of 15.2x, and MSCI EM at 1,200 with a P/E of 12.5x [6].

Group 1 - OPEC+ is accused of accelerating production increases as a "scam," suggesting that the apparent negative impact on the market may conceal deeper strategies [1] - There is a misinterpretation in the market regarding supply signals, which presents an opportunity for savvy investors to position themselves ahead of the summer demand surge [1] - Hedge funds are betting on a continuous rise in the U.S. stock market for July, indicating a strategy to capitalize on potential market highs while constructing a defensive position [1]