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Industry Overview * **Hardware Growth Acceleration**: The report forecasts hardware growth to accelerate in 2025, with a focus on enterprise vs. consumer end markets. However, the current valuation at 19 P/E for 4-7% rev/EPS growth in 2025 suggests that acceleration is already priced in. * **CIO Survey**: The 3Q24 CIO survey indicates that CIOs expect spending on PCs, servers, and storage to accelerate in 2025. This aligns with the overall optimistic outlook for hardware spending growth. * **Tech Hardware Valuation**: Tech hardware stocks are currently trading at an all-time high P/E of 19x, which is 4-6x turns above valuations at similar points in past cycles. This suggests that the market has already priced in a growth re-acceleration in 2025. * **Hardware Spending Expectations**: The report forecasts average enterprise hardware revenue growth of 3% Y/Y in 2025, with the strongest growth in AI servers and PCs. Average consumer hardware revenue growth is expected to be 3% Y/Y, ~175bps below consensus. * **Macroeconomic Factors**: The report identifies macroeconomic factors such as interest rates, inflation, and employment as headwinds to hardware spending. However, it also notes that clarity on the presidential election and a favorable interest rate environment could alleviate some of these concerns. * **Tail Risks**: The report identifies tariffs and cuts to government spending as potential tail risks to hardware spending in 2025. However, it believes that the impact of these risks is less significant than perceived. Key Companies and Their Outlooks * **Apple (AAPL)**: The report maintains an Overweight rating on Apple, considering it the Top Pick in the US IT hardware coverage universe. The company is expected to benefit from a multi-year iPhone refresh cycle and consistent double-digit Services growth. * **Dell Technologies (DELL)**: Dell remains one of the core IT hardware Overweights, well-positioned to benefit from accelerating AI server orders and a cyclical recovery in core servers, storage, and PCs. * **Seagate Technology (STX)**: Seagate is considered an Overweight due to its strong position in the HDD market and potential for revenue and gross margin expansion. * **Kornit Digital (KRNT)**: Kornit is the top small cap Overweight, leading in the digital textile printing market with strong growth and margin trajectory. * **Garmin (GRMN)**: Garmin is Underweight due to concerns about sustainability of its growth rates and negative risk-reward profile. * **Sonos (SONO)**: Sonos is Underweight until clearer evidence that the negative consumer reaction to the mid-2024 app update has passed. * **Xerox Corp (XRX)**: Xerox is Underweight due to challenges in its core business and uncertain macro environment. * **CDW Corporation (CDW)**: CDW is Equal-weight, potentially undervalued as a way to play a more robust cyclical recovery in 2025. * **Ingram Micro (INGM)**: INGM is Equal-weight, with potential for upside as a beneficiary of a more robust cyclical recovery in 2025. * **Logitech (LOGI)**: LOGI is Underweight due to concerns about execution and valuation. Conclusion The report provides a comprehensive overview of the IT hardware industry, highlighting key trends, risks, and opportunities. While the industry is expected to grow in 2025, valuation concerns and macroeconomic uncertainties remain. The report offers valuable insights for investors looking to navigate the complex landscape of the IT hardware industry.

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **US Economic Perspectives** and inflation forecasts, focusing on the **Personal Consumption Expenditures (PCE)** and its components, including housing services, health care services, food services, and other core services. Core Insights and Arguments 1. **Inflation Forecasts**: The overall inflation projection remains uncertain, with risks on both sides of the forecast. The uncertainty surrounding inflation is larger than usual compared to the past 20 to 30 years, although it has decreased from a year or two ago [7][8][11]. 2. **Upside Risks**: - **Tariffs and Immigration Policies**: Proposed tariffs on US imports from China could significantly impact inflation, potentially increasing consumer price levels by up to 155 basis points if implemented fully [8]. - **Strong Economic Growth**: Continued solid growth may keep service price increases elevated, with non-rent services inflation likely to exceed forecasts if wage growth remains high [8]. - **Rents**: There is a possibility that rent increases could be higher than expected, with estimates suggesting a potential monthly increase of 40 to 45 basis points for the next 18 to 24 months [8]. 3. **Downside Risks**: - **Economic Slowdown**: A potential recession could lead to a more significant decline in inflation than anticipated, particularly affecting prices for financial services and travel-related services [9]. - **Weakness in Rent Prices**: If rental increases continue to slow, it could contradict current projections, leading to lower inflation rates [9]. - **Productivity Growth**: An increase in productivity could lead to lower price inflation despite wage growth, similar to trends observed in the late 1990s [9]. - **Natural Rate of Unemployment**: A lower natural rate of unemployment could reduce inflation forecasts by nearly 10 basis points [9]. Important but Overlooked Content 1. **Model Performance**: The Phillips curve models have struggled to predict inflation trends accurately, particularly during the recent inflation surge. The models did not account for changes in demand mix and supply constraints, which were significant drivers of inflation [11][12][13]. 2. **Components of Core PCE Inflation**: - Core goods prices have slowed significantly, with expectations of minimal further disinflation. Core goods inflation is projected to rise slightly by 2026 due to tariffs [24]. - Housing services inflation is expected to slow in the coming quarters, but may rise again as unemployment effects diminish [25][26]. - Health care services inflation is projected to remain stable, influenced by Medicare reimbursement rates [27]. - Food services inflation has slowed considerably, with further moderation expected as wage increases stabilize [28]. - Other core services inflation is also anticipated to slow as wage growth eases [28]. Numerical Data and Projections - **PCE Inflation Projections**: - 2024: 2.5% - 2025: 2.1% - 2026: 2.3% - 2027: 2.0% [35] - **Core PCE Inflation**: - 2024: 2.85% - 2025: 2.27% - 2026: 2.43% - 2027: 2.02% [44] This summary encapsulates the critical insights and projections discussed in the conference call, highlighting the complexities and uncertainties surrounding the US inflation landscape and its components.

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Key Takeaways Industry Overview * **Security Software Demand Remains Strong**: Despite macroeconomic challenges, demand for security software remains robust. This is driven by the increasing volume and severity of cyber threats, the growing importance of data security, and the shift towards digital transformation. * **Platformization Trend**: The trend of consolidating security solutions into a single platform continues to gain momentum. This is driven by the need for simplicity, efficiency, and cost savings. * **M&A Activity Accelerating**: M&A activity in the security software industry is accelerating, with both strategic and financial buyers seeking to expand their capabilities and market share. Company-Specific Outlook * **CyberArk (CYBR)**: CYBR remains a strong pick with a favorable competitive environment, expanding margins, and potential for long-term margin expansion and cash flow generation. * **SentinelOne (S)**: S is well-positioned for growth as a sustainable profitable emerging competitor with a compelling setup for 2025. * **Okta (OKTA)**: OKTA is a leader in IAM and a primary beneficiary of the growing strategic importance of Identity Security. * **CrowdStrike (CRWD)**: CRWD is expected to reaccelerate growth and profitability following the July 19th outage. * **Palo Alto Networks (PANW)**: PANW is well-positioned to consolidate share within several of the largest and highest priority enterprise security markets. * **Zscaler (ZS)**: ZS is a leader in SSE/SASE markets and a beneficiary of enterprise spending and vendor consolidation. * **Tenable (TENB)**: TENB is well-positioned for better growth, as the company continues to take share at the expense of its VM-related peers. * **Fortinet (FTNT)**: FTNT is well-positioned to benefit from a firewall refresh cycle in FY26 but faces near-term headwinds. * **Check Point (CHKP)**: CHKP is well-positioned for Hybrid Cloud and Digital Transformation growth but faces valuation challenges. * **N-able (NABL)**: NABL is still relatively early with platform expansion efforts but faces near-term headwinds. * **Rapid7 (RPD)**: RPD is well-aligned with elevated SecOps and Cloud Security demand but faces execution challenges. * **Varonis (VRNS)**: VRNS is delivering better than expected execution with its SaaS transition and is well-positioned for growth. * **Qualys (QLYS)**: QLYS is targeting TAM expansion but faces challenges with customer/revenue growth. * **CS Disco (LAW)**: LAW is facing execution challenges and a lack of profitability. Sector Themes * **Securing AI**: The rise of Generative AI presents new security challenges and opportunities. Security software companies are developing solutions to secure AI across the infrastructure, data, model, access, and outputs. * **Data Security**: Data security is becoming increasingly important, driven by the growing volume of data and the increasing number of data breaches. * **Convergence of Cyber and Physical**: The convergence of cyber and physical security is blurring the lines between the two domains and creating new opportunities for security software companies. * **Cloud Security**: Cloud security remains one of the fastest-growing segments within security, driven by the shift towards cloud computing. * **SASE/SSE**: Secure Access Service Edge (SASE) and Secure Service Edge (SSE) are gaining momentum as solutions for securing hybrid networks. Valuation and Fundamentals * **Profitability Matters**: Companies with strong unit economics and embedded operating leverage are well-positioned to deliver better gross margins and LTV. * **Platformization**: Companies with strong platform capabilities are well-positioned to deliver greater levels of margin expansion and FCF growth. * **M&A Activity**: M&A activity can provide a significant boost to growth and profitability. Conclusion The security software industry remains a strong investment opportunity with a healthy demand backdrop, reasonable expectations, and a number of attractive setups for better than expected execution. Companies with strong platform capabilities, a focus on profitability, and the ability to innovate and adapt to changing market conditions are well-positioned to succeed.

North America Equity Research 16 December 2024 J P M O R G A N CrowdStrike (CRWD) • Our Bull case is centered on a bottom-up analysis by product segment. We expect CRWD will continue to gain market share within its endpoint market while taking meaningful share with emerging products. CrowdStrike grew its Endpoint market share by 30bp in CY23 (FY24) according to IDC and our bull-case scenario considers that CRWD's endpoint market share can grow to 25.0% in FY27, assuming that we'll see capitulation from ente ...

Jefferies Equity Research December 16, 2024 Please see analyst certifications, important disclosure information, and information regarding the status of non-US analysts on pages 13 - 17 of this report. Jefferies Solar glass (SG): Per SCI, 3.2/2.0mm prices stayed RMB19.0-19.5/11.5-12.0 per m2. SG production capacity stayed at 94,890t/d. Inventory days decreased by 1.88% WoW to 34.87d. Per SCI, SG GPM in Nov'24 plunged by 14.02 pct MoM to -19.46%, with SG price retreat on sluggish demand and natural gas price ...

Summary of HKEx Conference Call Company and Industry Overview - The conference call discusses the performance and outlook of Hong Kong Exchanges and Clearing Limited (HKEx) [1][3][19]. Core Points and Arguments - **Long-term Trading Activity Support**: Several factors are expected to support trading activity in capital markets from a long-term perspective [1]. - **Revenue Challenges**: Geopolitical uncertainties, particularly related to the new US administration's policies and potential tariff hikes, pose risks to HKEx's revenue [3]. - **Revenue Forecasts**: Revenue expectations for HKEx are projected to increase by 2.7% for 2024 and 4.5% for 2025, driven by higher average daily volume (ADV) assumptions [4][8]. - **Earnings Per Share (EPS) Adjustments**: EPS forecasts have been raised by 4% for 2024, 6.9% for 2025, and 7.4% for 2026 due to increased revenue expectations [4][8]. - **Market Capitalization Growth**: Market cap growth is expected to be -25.6% in 2022, -5.9% in 2023, and then recover to 5.0% in 2024, 12.0% in 2025, and 15.0% in 2026 [7]. - **Price Target Adjustments**: The price target for HKEx has been raised to HK$310, reflecting a more favorable economic outlook [8][19]. Financial Metrics - **Average Daily Volume (ADV)**: Projected ADV is HK$135 billion for 2024 and HK$150 billion for 2025, with a velocity of 93% and 92% respectively [10][12]. - **Revenue Breakdown**: Total revenues are expected to reach HK$22,890 million in 2024, HK$23,767 million in 2025, and HK$25,301 million in 2026 [8][17]. - **Profitability Ratios**: The EBITDA margin is projected to be 72.3% in 2024 and 73.2% in 2025, with a return on equity (ROE) of 25.55% in 2024 [21][22]. Risks and Considerations - **Geopolitical Risks**: Rising geopolitical uncertainties could negatively impact revenue and trading activity [3][19]. - **Market Conditions**: The potential for a sharp pickup in market conditions and IPO activity is noted as a risk to the downside [24]. - **Regulatory Environment**: Changes in regulations affecting IPOs and market liquidity could pose risks to revenue [24]. Additional Insights - **Investment Drivers**: The call highlights the importance of market turnover, IPO listings, and recurring listing fees as key drivers of revenue [24]. - **Consensus Rating**: The consensus rating distribution indicates a majority overweight position on HKEx, with a significant portion of analysts maintaining a positive outlook [19][24]. This summary encapsulates the key points discussed during the HKEx conference call, providing insights into the company's performance, forecasts, and the broader market context.

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **global mining sector**, with a focus on **Australian miners** and their financial metrics, valuations, and market performance [4][7][11]. Core Insights and Arguments - **Electric Vehicle (EV) Market Growth**: In November 2024, pure EV sales in China increased by **30% year-over-year (YoY)**, indicating strong demand in the EV sector [2]. - **Investment Activity**: Morgan Stanley Infrastructure Partners announced the acquisition of a **49% stake** in Onslow Iron Road Trust, which is linked to the Onslow Iron ore project, highlighting ongoing investment in mining infrastructure [4]. - **Valuation Metrics**: The report includes various valuation multiples and key metrics for ASX miners, indicating a range of **EV/EBITDA** ratios from **4.0x to 27.3x** for different companies, reflecting diverse financial health and market positioning [4][41]. - **EBITDA Margins**: The EBITDA margins for ASX miners are presented, with some companies showing margins as high as **27.3%** [8][28]. - **Free Cash Flow (FCF) Yield**: The next 12-month FCF yield for the mining sector is discussed, with averages around **2.0x** to **3.0x**, indicating potential for cash generation [12][33]. Additional Important Information - **Commodity Revenue Exposure**: The report outlines the revenue exposure of Australian miners to various commodities, emphasizing the importance of diversification in revenue streams [11][12]. - **Market Capitalization and Ratings**: The document provides a detailed table of various mining companies, including their market capitalization, target prices, and consensus ratings, which are crucial for investors assessing potential investments [42][43]. - **Relative Performance Metrics**: The relative performance of mining stocks compared to industrials is analyzed, showing trends in **P/E ratios**, **dividend yields**, and **return on equity (ROE)** over time [31][32][39]. - **Future Projections**: The report includes projections for 2024 to 2026, with estimates for revenue, EBITDA, and other financial metrics, which are essential for forecasting future performance [42][43]. This summary encapsulates the key points from the conference call, focusing on the mining industry, financial metrics, and market dynamics that are critical for investment analysis.

Summary of Chinese Media (600373 CH) Equity Research Report Company Overview - **Company**: Chinese Media - **Industry**: Media - **Current Rating**: Downgraded to Reduce from Buy - **Target Price**: Reduced to RMB 8.40 from RMB 18.70 Key Financial Metrics - **2023 Revenue**: CNY 10,084 million - **2024 Revenue Estimate**: CNY 8,574 million (down 21.4% from previous estimate) - **2025 Revenue Estimate**: CNY 7,676 million (down 33.9% from previous estimate) - **2026 Revenue Estimate**: CNY 8,188 million (down 32.8% from previous estimate) - **2024 Net Profit Estimate**: CNY 915 million (down 52.0% from previous estimate) - **2025 Net Profit Estimate**: CNY 1,015 million (down 50.2% from previous estimate) - **2026 Net Profit Estimate**: CNY 1,429 million (down 34.4% from previous estimate) [4][44] Core Points and Arguments - **Revenue Pressure**: Revenue from textbooks and supplementary teaching materials is under pressure due to a policy change in Jiangxi Province, where centralized purchasing by schools has been discontinued since autumn 2024 [2][13][42]. - **Earnings Estimates**: The company's earnings estimates have been significantly lowered due to the impact of the policy change, with a projected CAGR of pre-tax profit at 6% for 2024-26, which is below the industry average of 13% [13][46]. - **Valuation Concerns**: The stock is currently trading at a 19x 2025e forward PE, which is above the industry average of 17x, indicating that the stock may be overvalued [13][46]. - **Tax Benefits**: The company is expected to enjoy tax benefits starting in 2025 due to preferential tax treatment for cultural enterprises, leading to a significant reduction in income tax rates [21][13]. Financial Ratios and Changes - **Gross Margin**: Lowered gross margin estimates for 2024-26 by 2.5ppt, 2.1ppt, and 0.9ppt to 40.6%, 40.1%, and 41.3% respectively [20]. - **Expense Ratios**: Increased selling, administrative, and R&D expense ratios due to lower revenue estimates [43]. - **Market Capitalization**: Current market cap is CNY 18,993 million (USD 2,613 million) [14]. Risks and Opportunities - **Risks**: The primary risk is the continued pressure on textbook sales due to the policy change, which could lead to further revenue declines [42]. - **Opportunities**: Potential for recovery in the textbook business if the company can adapt its sales strategy to target students directly, and growth in the overseas gaming market could provide additional revenue streams [51]. Conclusion - The downgrade to Reduce reflects significant downward revisions in revenue and profit estimates due to policy changes affecting the core business of Chinese Media. The company faces challenges in adapting to these changes while also being overvalued compared to industry peers. Future performance will depend on the successful implementation of new sales strategies and the realization of tax benefits.