ab 17 June 2025 Global Research China Equity Strategy A-share outlook H225: Five types of fund flows, five macro-scenario allocations Earnings may recover sequentially; trade/policy a swing factor for valuation Assuming US/China tariffs remain at their current levels, we expect CSI 300 A-share EPS to grow 6% YoY in 2025. Given the low base, we expect A-share earnings to rebound modestly each quarter this year, but deflationary pressure may constrain upward revisions to overall earnings estimates. Amid uncer ...

Core Viewpoint - The midstream energy sector presents high-yield stock opportunities for income-focused investors, with a $1,000 investment being a suitable starting point [1] Group 1: Midstream Energy Sector Overview - Pipeline companies are likened to energy toll roads, having minimal exposure to energy prices, but lower energy prices can lead to reduced volumes and potential contract renegotiations [2] - The midstream business is capital intensive, resulting in companies carrying debt, indicating that these stocks are not risk-free investments [2] Group 2: Energy Transfer - Energy Transfer offers a high yield of 7.3% and a low forward EV-to-EBITDA multiple of 8.1 times, significantly below the historical average of 13.7x for midstream MLPs [4] - The company has improved its leverage post-pandemic and currently has its highest percentage of take-or-pay contracts, ensuring revenue regardless of customer usage [5] - Energy Transfer is increasing its growth capex from $3 billion to $5 billion, with growth projects expected to come online late this year or next [6] Group 3: Enterprise Products Partners - Enterprise Products Partners has consistently increased its distribution for 26 years, supported by a fee-based business model and take-or-pay contracts [8] - The company plans to increase its growth capex to between $4 billion and $4.5 billion, with $6 billion in projects expected to come online this year [9] - The stock trades at a forward EV-to-EBITDA multiple of 10 times, with a yield of 6.6%, making it a stable option for long-term investors [10] Group 4: MPLX - MPLX has a strong balance sheet with a leverage ratio of 3.3 times and a distribution coverage ratio of 1.5 times, having grown its distribution by over 10% annually for the past three years [11] - The company operates in natural gas and NGL services, as well as crude oil logistics, with growth opportunities primarily in the natural gas segment [12] - MPLX is expanding through acquisitions, including the purchase of the remaining 55% interest in the BANGL pipeline system, enhancing its strategic position [13] - The stock has a yield of 7.4% and a forward EV-to-EBITDA multiple of 10.3 times, indicating reasonable valuation [14]