February 28, 2025 12:16 PM GMT ASML Holding NV | Europe Notes from the ASML Roadshow On Thursday 27th February we hosted Jim Kavanagh, ASML's worldwide VP of Investor Relations for a roadshow in Edinburgh. The key points of interest from the day centred around the shifting dynamics amongst ASML's customer base, litho intensity going forward and the state of play in China. Key Takeaways Customer base in focus. The topic with the greatest interest amongst investors centred on ASML's customers, more specifical ...

28 February 2025 Asian FX Focus Currencies Doubling down on tariffs US President Trump said in a social media post on 27 February that there will be an additional 10% tariffs on all imports from mainland China from 4 March because of the unresolved fentanyl issue. This was rather unexpected, because, originally, the 4 March timeline was for the delayed 25% tariffs on Mexico and Canada (as an earlier 10% tariff on China was already implemented on 4 February). Taken together with the "America First Trade Poli ...

28 February 2025 | 11:46PM SGT Asia-Pacific Strategy: CY4Q/2H24 earnings monitor Earnings disappointment continued 510 companies in the MXAPJ index (67% of MXAPJ cap) have reported results. Actual CY24 earnings are tracking at 97% of full-year estimates (Bloomberg consensus). CY4Q24 profits of the companies that have reported grew 11% versus the previous year and -17% versus the previous quarter, while CY2024 profits were +18% yoy. Excluding financials, CY4Q24 revenues were +16% yoy (+2% qoq) and net margin ...

Summary of Conference Call Company and Industry - **Company**: SoundHound - **Industry**: Voice AI and Conversational AI technology Key Points and Arguments 1. **Record Revenue Growth**: In Q4 2024, SoundHound reported revenue of $35 million, marking an increase of over 100% year-over-year, achieving the top end of their revenue guidance for the year [1] 2. **Three-Pillar Business Strategy**: SoundHound's strategy includes a voice commerce ecosystem, AI customer service, and voice assistant technology, which is expected to enhance business momentum [2][3] 3. **Strong Automotive Pipeline**: The company is engaged in numerous RFPs and POCs with major automotive brands, including four EV brands like Lucid and TOG [3] 4. **Healthcare Sector Wins**: SoundHound secured contracts with notable healthcare providers such as Duke Health and Wellstar Health System, indicating strong repeat business in this sector [3] 5. **Expansion in Restaurants**: Partnerships with major QSRs like Burger King and Whataburger highlight the growing adoption of AI customer service in the restaurant industry [3] 6. **Diverse Customer Base**: The company is expanding its reach across various sectors, including retail, government, and military, with significant contracts signed [4][5] 7. **Agentic AI Leadership**: SoundHound positions itself as a leader in enterprise conversational AI, emphasizing the importance of agentic AI in optimizing performance and achieving complex goals [4][5] 8. **CES Participation**: The company showcased its technologies at CES, generating significant interest and partnerships with industry leaders [5] 9. **Competitive Performance**: SoundHound's AI technology outperformed competitors like Google and OpenAI in accuracy and latency, reinforcing its competitive edge [6] 10. **Financial Performance**: Q4 revenue was $34.5 million, with a full-year revenue of $85 million, reflecting an 85% growth [7][8] 11. **Strong Backlog**: The company ended the year with a cumulative subscriptions and bookings backlog of nearly $1.2 billion, up over 75% year-over-year [8] 12. **Investment in R&D**: R&D expenses increased by 60% year-over-year, driven by acquisitions and a commitment to innovation [10] 13. **Path to Profitability**: SoundHound aims to achieve adjusted EBITDA profitability by the end of 2025, focusing on scale and high ROI investments [13] 14. **Market Opportunities**: The automotive sector presents a significant revenue opportunity with over 90 million light vehicles produced annually, while the restaurant sector has a serviceable market worth tens of billions [8][9] 15. **Integration of Acquisitions**: The company is actively integrating acquisitions to enhance its product offerings and streamline operations [11][12] Other Important Content 1. **Impact of Economic Conditions**: The company benefits from both economic growth and challenging conditions, as businesses seek AI solutions for innovation and cost-saving [26] 2. **Customer Engagement**: SoundHound is focusing on customer engagement and internal IT support use cases, leveraging its acquisitions to enhance service offerings [20][21] 3. **Long-Term Contracts**: The company is pursuing multi-year contracts in new verticals like energy, which are expected to provide stable revenue streams [19] 4. **Flexibility in Offerings**: SoundHound is open to partnerships for technologies that enhance its platform, ensuring comprehensive solutions for customers [29] 5. **POC to Revenue Timeline**: The transition from POCs to full contracts can vary, but existing relationships can lead to quick deployments [29]

Summary of Eli Lilly & Co Conference Call Company Overview - **Company**: Eli Lilly & Co (LLY) - **Industry**: US Biopharmaceuticals - **Rating**: Outperform - **Price Target**: $1,100.00 USD by February 25, 2025 - **Current Price**: $881.40 USD - **Market Cap**: $835.717 billion USD - **Dividend Yield**: 0.7% [4][31] Key Points and Arguments Pricing Strategy - Eli Lilly announced a price reduction for Zepbound starting doses (2.5mg and 5mg) to $349 and $499 per month, respectively, reflecting decreases of 12.5% and 9.1% [8] - The launch of the Zepbound Self Pay Journey Program will reduce prices for higher doses (7.5mg and 10mg) to $499 for the first fill and refills within 45 days [8][3] Market Dynamics - The FDA's resolution of the semaglutide shortage is expected to boost demand for Eli Lilly's products, particularly Mounjaro and Zepbound [2] - The prohibition of compounding semaglutide is anticipated to be a significant catalyst for Eli Lilly's market share growth [2] Growth Metrics - LillyDirect prescriptions are now included in IQVIA data, leading to a notable increase in weekly script numbers [2][9] - Eli Lilly's Tirzepatide products (Mounjaro and Zepbound) are adding approximately 1.3 million scripts every four weeks, outpacing Novo Nordisk's offerings [15] Market Share Insights - Eli Lilly holds a 53.7% market share in the GLP-1 category when including Trulicity, with Tirzepatide products capturing 48.8% of the market share in the latest week [16] - Mounjaro and Zepbound are showing accelerating growth in lower doses, indicating a strong uptake among new patients [15] Financial Projections - Adjusted EPS is projected to grow from $6.32 in FY23 to $22.77 in FY25, with a significant drop in adjusted P/E from 139.5x to 38.7x over the same period [7][31] - The stock is expected to outperform the market index by more than 15 percentage points [10] Additional Important Information - The report includes a detailed analysis of weekly TRx (total prescriptions) and NRx (new prescriptions) data for GLP-1 products, highlighting Eli Lilly's competitive position against Novo Nordisk [15][19] - Risks include potential pressures on the obesity total addressable market (TAM), manufacturing expansion challenges, and high-risk M&A activities [36][37] Conclusion Eli Lilly & Co is positioned for significant growth in the biopharmaceutical sector, particularly in the GLP-1 market, driven by strategic pricing, regulatory developments, and strong prescription growth metrics. The company's proactive approach to market access and pricing strategies is expected to enhance its competitive edge and financial performance in the coming years.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: China Autos & Shared Mobility - **Research Firm**: Morgan Stanley Asia Limited Core Insights 1. **Tesla's FSD Launch**: Tesla is preparing to roll out its Full Self-Driving (FSD) software in China, with customers who previously paid Rmb64k (US$8.8k) eligible for the release [1] 2. **Impact on L2+ NOA Adoption**: The anticipated launch of Tesla's FSD could accelerate the adoption of L2+ Navigate on Autopilot (NOA) features across China's New Energy Vehicles (NEVs), following BYD's recent mass adoption of Advanced Driver Assistance Systems (ADAS) [1] 3. **Competitive Landscape**: Tesla's influence is shifting local players towards end-to-end neural networks for their AD solutions, indicating a potential increase in competition within the China smart EV ecosystem [1] 4. **Pricing Strategy**: It remains to be seen if Tesla will maintain the Rmb64k price for FSD, as many local competitors are offering NOA software for free [1] Regulatory and Operational Challenges 1. **Data Ownership and Computing Power**: Regulatory hurdles persist for Tesla regarding data training and transfer outside China for the FSD launch. The ownership of training data and access to necessary computing power will be critical amid ongoing geopolitical tensions [2] Additional Information - **Analyst Team**: The report includes insights from various analysts at Morgan Stanley, including Tim Hsiao, Adam Jonas, Cindy Huang, and others [3] - **Investment Banking Relationships**: Morgan Stanley has investment banking relationships with several companies in the automotive sector, which may influence their research objectivity [4][14][16] Stock Ratings Overview - The report includes stock ratings for various companies in the China automotive sector, indicating a mix of Overweight (O), Equal-weight (E), and Underweight (U) ratings for companies like BYD, NIO, and Geely [57][59] Conclusion - The anticipated launch of Tesla's FSD in China is expected to have significant implications for the adoption of autonomous driving technologies in the region, while regulatory challenges and competitive dynamics will play a crucial role in shaping the market landscape.

Summary of the Conference Call on Humanoid Robotics Industry Overview - The focus of the conference call was on the **humanoid robotics industry** in China, highlighting the progress and challenges faced by companies in this sector [1][3]. Key Takeaways - **Adoption and Development**: There is positive momentum in the development of new humanoid models, with many companies having developed products and shipped samples for testing. Leading domestic players like Agibot are scaling up orders to meet aggressive production goals for 2025 [3][7]. - **Sales Projections**: Leju expects to sell 500-1000 units in 2025, while MagicBot targets 400 units, scaling to 15,000 units by 2027 [3][7]. - **Technical Uncertainty**: The technical path for humanoid robotics remains uncertain, with various solutions being explored. However, convergence is expected within the next 2-3 years [9][10]. - **Cost Reduction Focus**: Cost reduction is a primary concern among manufacturers, with expectations of significant decreases in production costs through technology improvements and local sourcing [7][13]. Company Insights - **Local Supply Chain**: Chinese manufacturers are increasingly capable of producing humanoid robot components domestically, although high-end AI chips are still imported [10][11]. - **Component Manufacturers**: Key players in the supply chain include: - **Screws**: Hengli, Best Precision, XCC - **Reducers**: Shuanghuan, Leaderdrive, Guomao, Zhongda Leader - **Motors**: Inovance, Kinco - **Sensors**: Ampron, Orbbec, Keli Sensing [7][12]. Challenges and Opportunities - **Application Limitations**: Current humanoid robots are primarily used for simple tasks, and broader applications are limited by low success rates and the need for software advancements [8]. - **Market Dynamics**: The humanoid robotics market in China is expected to grow, with potential faster adoption in the US due to higher labor costs and advanced solutions [7][10]. - **Cost Projections**: Leju's production cost has decreased from RMB 700,000 in 2024 to RMB 400,000, with a target of RMB 200,000 by the end of 2025. Component prices are also expected to drop significantly as production scales up [13][24]. Technical Developments - **Actuator Preferences**: Linear actuators are not currently prevalent, but improvements in motion control technology may increase their application in the future [15]. - **Reducer Technology**: There is a distinction between harmonic and planetary reducers, with each having its advantages and disadvantages. Domestic manufacturers are gaining market share but still face challenges compared to foreign competitors [20][21]. Market Performance - The **China humanoid supply chain** has outperformed the MSCI China index, with component manufacturers leading the rally [31][32]. Conclusion - The humanoid robotics industry in China is on a growth trajectory, driven by advancements in technology and local manufacturing capabilities. However, challenges remain in terms of application success rates and cost management. The focus on cost reduction and technical improvements will be crucial for the industry's future success [7][13][24].

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **Chinese Shipping** industry, particularly in the context of the **Asia Pacific** region and the implications of the **US Proposed Section 301 Investigation** [1][2]. Core Insights and Arguments - The **U.S. Trade Representative (USTR)** is seeking public comments on a Section 301 investigation targeting **Chinese Maritime, Logistics, and Shipbuilding** sectors, proposing extra charges on Chinese operators and vessels built in China [2][7]. - Proposed actions could significantly impact **global capital expenditure (capex)** flows in shipbuilding, potentially leading to inflationary pressures on U.S. imports [7]. - The **container shipping** sector is expected to remain in a downcycle, with negative implications for companies such as **CSH**, **OOIL**, and **SITC** if the proposed actions are implemented [7][8]. - **China** is a crucial buyer of **U.S. agricultural goods** and **petroleum exports**, and additional charges on Chinese shipping companies could hinder trade growth [7][8]. Statistical Data - As of January 2025, **Chinese shipyards** hold approximately **67%** of the global existing order book deadweight tonnage (dwt), followed by **Korea** at **18%** and **Japan** at **11%** [8]. - If the proposed actions are enacted, the container shipping industry is expected to see limited impact on the global shipping landscape, with marginally negative effects on Chinese liners due to U.S. route exposure [8]. Additional Important Points - The **Morgan Stanley Research** team emphasizes the potential for increased intra-Asia supply pressure if smaller containerships exit U.S. routes due to competition, which could also adversely affect **SITC** [8]. - The report highlights the importance of monitoring the developments in the shipping sector as they could have broader implications for trade and investment strategies in the region [5][7]. Conclusion - The proposed Section 301 investigation by the U.S. could reshape the dynamics of the Chinese shipping industry, affecting trade relationships and investment flows. Stakeholders are advised to remain vigilant regarding these developments and their potential impacts on market conditions and company performance [2][7][8].

Summary of Key Points from the Conference Call Industry Overview - The current cycle in the China internet sector is characterized by AI proliferation, cost efficiency, and technological breakthroughs, differing from previous cycles [1][2] - The competition landscape has shifted towards advanced technology and cost-efficient models rather than traditional competitive dynamics [2] Company-Specific Insights Tencent - Tencent's AI strategies are expected to be detailed in upcoming earnings, focusing on the integration of DeepSeek across various offerings, enhancing user experience [3] - The integration includes applications in Weixin Search, Enterprise Weixin, QQ Browser, and others, with notable upgrades to the Yuanbao chatbot [3] - Anticipated spending on AI and cloud services is projected to be less than that of Alibaba and ByteDance, with expectations of over RMB100 billion in FY26 for both competitors [3] Alibaba - Positive outlook for Alibaba, driven by accelerated cloud revenue and capital expenditure investments to leverage AI opportunities [4] - Anticipation of a model upgrade following Qwen 2.5-max, which is expected to attract market attention [4] - Alibaba's advanced technology and open-source models are highlighted, with significant improvements in unit economics for AIDC entering FY26 [4] Baidu - Baidu has seen a surprising acceleration in cloud revenue growth at 26% YoY, significantly above market expectations [5] - AI generative search results have reached approximately 83% of Baidu users, indicating strong user engagement [5] - Positive growth in online marketing revenue is expected in the second half of the year, supported by improved user experience and AI monetization [5] Market Valuation - The valuation of the China internet sector is viewed as undemanding, trading at a discount compared to US peers [6] - Recent earnings results for large and mid-cap companies in the sector have generally met or exceeded expectations, indicating a positive market sentiment [6] Additional Insights - The anticipated spending on AI and cloud services by major players indicates a robust investment trend in the sector, with significant capital expenditures expected from Alibaba and ByteDance [3][4] - The shift towards AI-driven models and applications is expected to redefine competitive dynamics in the China internet sector, moving away from traditional competition [2]

Summary of Key Points from the Conference Call on China's Export and Import Trends (2017-2024) Industry Overview - The report focuses on the **Chinese trade industry**, analyzing export and import trends from **2017 to 2024** amidst significant global events such as the **US-China trade war**, the **Covid pandemic**, and the **Russia-Ukraine war** [3][4]. Core Insights and Arguments - **Export Growth**: China's nominal exports grew at an annual average rate of **6.7%** from 2017 to 2024, totaling a **58% cumulative increase**. This growth rate is significantly higher than the **5.1%** annual average growth rate of imports, which amounted to a **42% cumulative increase** [3][7]. - **Global Export Share**: China's share of global exports rose from **12.9% in 2017** to **14.8% in 2024**, while major exporting countries like Japan and Germany saw declines in their global export shares [4][27]. - **Trade Surplus**: China's goods trade surplus more than doubled from approximately **USD 420 billion in 2017** to nearly **USD 1 trillion in 2024**, surpassing the combined surpluses of the next eight countries [4][26]. - **Emerging Markets (EM) vs. Developed Markets (DM)**: The share of EM economies in China's exports and imports increased significantly, with EM economies accounting for **55% of exports** and **51% of imports** in 2024, up from **46%** and **39%** in 2017, respectively [3][14]. - **Geopolitical Influence**: The shift in trade patterns is closely linked to geopolitical factors, with stronger trade ties observed between China and EM countries, particularly those with closer geopolitical relations to China, such as Russia and ASEAN nations [18][23]. Additional Important Insights - **Product-Specific Trends**: Chinese exports showed broad-based growth across various sectors, including transportation equipment, chemicals, and machinery, while imports were primarily concentrated in commodities and basic materials [17][19]. - **Bilateral Trade Dynamics**: China's trade balance improved with most major economies, including a notable increase in the trade surplus with the US, which rose to **USD 361 billion in 2024** from **USD 276 billion in 2017** [27][30]. - **Import Substitution**: There has been a significant trend towards import substitution in China, with domestic production of goods like autos and machine tools outpacing imports, indicating a shift towards self-reliance [39][44]. - **Future Outlook**: The report suggests that these trends are likely to persist, with continued expansion of Chinese exports, underperformance in imports, and a rising trade surplus unless there is strong pushback from trading partners [44]. This comprehensive analysis highlights the resilience and adaptability of China's trade dynamics in the face of global challenges, emphasizing the importance of geopolitical relationships and domestic policy shifts in shaping future trade patterns.