21 February 2025 | 2:50AM HKT Bilibili Inc. (BILI) Earnings Review: 4Q in-line, ads clear outperformance and eyes on potential game recovery; Buy | BILI | 12m Price Target: $23.70 | Price: $20.33 | Upside: 16.6% | | --- | --- | --- | --- | | 9626.HK | 12m Price Target: HK$185.00 | Price: HK$154.80 | Upside: 19.5% | Bili reported a largely in-line 4Q24 print and its first positive gaap profit quarter. Into 2025 and amid the rising AI enthusiasm, we see Bili is in a good position to benefit from AI, on the ba ...

FICC Research Credit Strategy 21 February 2025 US Investment Grade US exporting supply The pickup in reverse Yankee issuance year-to-date stands out versus slightly underwhelming $-IG supply volumes. With little difference on a hedged basis, the outright yield differential is likely the driver. We screen for US issuers with upcoming € maturities that may come to the market next. A number of reverse Yankee deals in the past few weeks have put the spotlight on cross-border issuance in €-IG. At a high level, € ...

A c t i o n | 20 Feb 2025 21:35:56 ET │ 19 pages China Healthcare Potential Catalysts Ahead for CXOs: Top-Line Acceleration and Margin Expansion CITI'S TAKE Following our deep-dive report on leading CXOs in Nov 2024, leading CXO companies rebounded significantly on solid earnings delivered in FY24, strong project number and geopolitical uncertainty removed. We are positive on potential guidance revise-up in the mgmt. briefing after FY24 earnings release, thanks to accelerated backlog growth, capacity utiliz ...

USA: UMich Long-Term Inflation Expectations at Highest Since 1995; S&P PMIs Below Expectations on Net; Existing Home Sales Decline 21 February 2025 | 12:01PM EST BOTTOM LINE: The University of Michigan's index of consumer sentiment was revised down in the February final report, below expectations. The report's 1-year inflation expectations measure was unrevised at 4.3% while the 5-10-year measure was revised up by 0.2pp to 3.5%. The S&P Global US manufacturing PMI ticked up in February, roughly in line with ...

FICC Research Economics 21 February 2025 China Outlook Rising animal spirits China's H shares outperformed amid the AI breakthrough. CNY stabilised with "Mar-a-Lago Accord" talk gaining momentum. President Xi's symposium with entrepreneurs sent supportive signals. We think key things to watch for the NPC include the growth and inflation target, and fiscal package. Equity re-rating; CNY stabilises The DeepSeek breakthrough has led to a valuation re-rating in China's H share market. At the time of writing on ...

Flash | 20 Feb 2025 20:00:56 ET │ 11 pages China Communication Infrastructure Quick Read-Through from 3QFY25 BABA Result; Cementing Our View on Industry Capex Up-Cycle; IDC/Optics Name to Be Beneficiary CITI'S TAKE Alibaba (covered by Alicia Yap) capex increasing 259% YoY in 3QFY25 and mgmt. comments that total capex in the next 3 years will exceed total capex over the past decade (~Rmb378bn) cemented our constructive view on AI capex up-cycle ahead, yet we also see potential correction after GDS/VNET 100%+ ...

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Semiconductor Production Equipment (SPE) in Japan [1] - **Analyst**: Tetsuya Wadaki from Morgan Stanley MUFG Securities Co., Ltd. [5] Core Insights - **Microsoft's Quantum Computing Chip**: Microsoft announced the development of a quantum computing chip named Majorana 1, which utilizes topological qubits to simplify error correction processes, a significant barrier to the commercialization of quantum computing [4][7] - **Qubit Requirements**: The chip aims to meet six essential conditions for qubits, including initializability, readability, scalability, long coherence time, and accurate conversion between stationary and flying qubits [4] - **Potential Applications**: Quantum machine learning is highlighted as a promising application, potentially leading to more efficient deep learning processes and reducing reliance on GPUs [2][9] - **Prototype Development Timeline**: Microsoft plans to complete a prototype quantum computer using Majorana within a few years, with a target of achieving a one million qubit device for commercial use [8] Implications for the SPE Industry - **Near-Term Impact**: The immediate impact on the SPE industry is expected to be negligible, as the completion of the quantum computer prototype is still several years away [7][9] - **Long-Term Opportunities**: Over the long term, the emergence of quantum computing could lead to increased demand for SPE from manufacturers like Advantest and Disco, as the market expands from GPUs to quantum devices [9] - **Performance Requirements**: The development of quantum computing could raise performance requirements for SPE, potentially increasing the value add and diversity of equipment needed [9] Additional Considerations - **Current Limitations of Quantum Computing**: Presently, quantum computing applications are limited to specialized calculations, such as breaking RSA encryption, but advancements could broaden its use in AI and machine learning [9] - **Investment in AI**: The potential for quantum computing to significantly enhance AI investments, such as the Stargate Project, is noted, indicating a shift in the technological landscape [9] Company Ratings in the SPE Sector - **Advantest (6857.T)**: Overweight [56] - **DISCO (6146.T)**: Overweight [56] - **KOKUSAI ELECTRIC (6525.T)**: Equal-weight [56] - **Lasertec (6920.T)**: Equal-weight [56] - **Nikon (7731.T)**: Underweight [56] - **SCREEN Holdings (7735.T)**: Equal-weight [56] - **Tokyo Electron (8035.T)**: Overweight [56] - **Ulvac (6728.T)**: Equal-weight [56] - **Ushio (6925.T)**: Equal-weight [56]

21 February 2025 | 7:21AM CST Optical Transceivers: BABA's cloud capex guidance a positive for transceiver demand; Buy HG Tech Alibaba (BABA, covered by Ronald Keung, report link) noted its cloud capex in the coming three years will exceed its total cloud capex in the past decade. This is positive for China datacom optical transceiver makers, in our view. Besides BABA, China telecom operators have also seen an increase in cloud and IDC activities following their deployment of Deepseek on their cloud platfor ...

February 21, 2025 01:19 PM GMT US Economics Weekly | North America Another fiscal scramble The deadline is approaching for a potential government shutdown. We expect a shutdown would lead to ~0.1pp per week direct drag on quarterly annualized real GDP growth, but this should reverse once the shutdown ends. The debt ceiling will also be topical for QT. Key Takeaways Exhibit 1: Upcoming fiscal deadlines | Date | Action needed | Votes required | Consequence if not | | --- | --- | --- | --- | | March 14 | Conti ...

Summary of Key Points from the Conference Call Company and Industry - **Company**: Alibaba Group (BABA) - **Industry**: Technology and Investment in China Core Insights and Arguments - **Earnings Performance**: Alibaba's recent results significantly exceeded expectations, indicating strong operational performance and market confidence [2] - **Capital Expenditure**: The announcement of increased capital expenditures surprised the market positively, suggesting a robust growth strategy [2] - **China's Technology Leadership**: There is a growing belief that China can lead in the AI-driven global technology competition, which should be recognized by global investors [2][3] - **Investor Sentiment**: Increased investor conviction in China's investibility as a technology leader is anticipated, with a shift in valuation expectations for MSCI China from 8-10x to 10-12x forward P/E ratios [3] - **Return on Equity (ROE)**: Expected improvements in MSCI China's ROE due to corporate self-help initiatives, better equity universe composition, and technology endorsements [3] Additional Important Information - **Valuation Shift**: The anticipated valuation shift is expected to compress the discount of MSCI China compared to emerging markets, potentially converging within the next 12 months [3] - **Market Dynamics**: The report emphasizes the importance of diligent corporate strategies and the evolving landscape of technology investments in China [3] - **Research Integrity**: Morgan Stanley acknowledges potential conflicts of interest due to its business relationships with companies covered in its research [4] This summary encapsulates the essential insights from the conference call, highlighting Alibaba's strong performance, the optimistic outlook for China's technology sector, and the anticipated shifts in investor sentiment and valuations.