Industry Trend - Vietnam is rapidly rising as a manufacturing hub, becoming a key player in global trade [1] - Vietnam is a major beneficiary of the "China+1" strategy [1]

Playing the long game Key features of the outlook We forecast GDP growth of 4.6% and 4.2% for 2025 and 2026, respectively, assuming no change in the US tariff levels (up an additional 30% compared to the start of 2025) and modest stimulus. Over the coming months, export frontloading and the announced policy measures should remain supportive, but some weakening is bound to happen further ahead, when the exemption period on the reciprocal tariffs comes to an end, warranting more policy support. Given the tari ...

Investment Rating - The report provides an "Overweight" (OW) rating for several companies, indicating a positive outlook for their performance in the market [9][13]. Core Insights - The report highlights opportunities arising from the trade war and China's stimulus measures in the near term [5]. - Medium-term growth is expected to be driven by the "China+1" strategy, post-war reconstruction, and advancements in robotics [6]. - Long-term stability is supported by structural growth drivers within the industry [7]. Company Summaries - Shenzhen Inovance is positioned to benefit from the industrial automation (IA) cycle inflection [9]. - Weichai Power is anticipated to experience growth as China's heavy-duty truck (HDT) market enters an upcycle [9]. - Evergreen Marine is expected to gain from supply chain adjustments [9]. - SANY and XCMG are set to benefit from increasing demand for construction machinery [9]. - Sanhua and Leader Drive are identified as key players in the humanoid robot sector [9]. - C SF Holdings and ICT are likely to benefit from further supply chain adjustments [9]. - Weichai's market share in large-bore engines is projected to grow significantly [9]. - TTI is sustaining growth through innovation and a shift towards cordless tools [9]. - CRRC is benefiting from high-speed train demand and the phase-out of diesel engines [9]. - ST Engineering is expanding internationally amid geopolitical tensions [9].

Group 1 - The core observation from the trip is that the concept of "comparative advantage" is becoming obsolete, replaced by "competitive advantage" in the current global trade system [10][12][14] - Southeast Asian entrepreneurs are increasingly aware of their diminishing advantages in the face of China's industrial capabilities, leading to a complex emotional response [18][19] - The logistics entrepreneur discovered a new trade route that leverages the RCEP rules, indicating potential new opportunities despite the prevailing challenges [5][19] Group 2 - The current trade dynamics are characterized by a zero-sum game mentality, driven by protectionist policies that distort the benefits of free trade [14][15] - The intricate interdependencies within the supply chain make it difficult to identify clear comparative advantages, as industries are deeply embedded in a global network [15][17] - Southeast Asian countries are navigating a challenging landscape where they must balance their economic ties with both China and the U.S., leading to a "squeezed symbiosis" in their trade relationships [21][23] Group 3 - The historical context of trade routes and the search for new pathways is echoed in the current situation, reminiscent of past explorations for new trade routes following geopolitical shifts [9][19] - The investment strategies of Chinese companies in Southeast Asia often lack long-term commitment and local integration, contrasting with the more sustainable approaches of Japanese and Taiwanese firms [24][28] - Southeast Asia's potential is highlighted by its young population and untapped internal trade, suggesting that there are still significant opportunities for growth despite current challenges [29][30]

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 09 Apr 2025 22:32:55 ET │ 13 pages China Industrials Reciprocal Tariffs Pause for 90 Days; Back to China+1 Strategy CITI'S TAKE Per CNN (9 Apr'25), President Trump announced 90-day pause for reciprocal tariffs but with exception of China. The 10% baseline tariff remains valid for almost all nations. However, reciprocal tariff on China will be increased to 125% from 104% in response to China's additional retaliatory tariffs against the US. Many China exporters have focused on Chi ...