February 6, 2025 12:59 AM GMT Shenzhen Envicool Technology Co Ltd | Asia Pacific Our thoughts on the recent stock price correction The stock correction reflects lower expectations for high- performance GPU demand and slower liquid cooling penetration growth, in our view. We stay constructive on long-term cooling market prospects thanks to accelerated AI application with notably declining costs, still benefitting Envicool. Envicool's share price fell 18% over the past two trading days vs. CSI300's -1%. We hi ...

Summary of the Conference Call on China Materials - Steel Industry Industry Overview - The report focuses on the **China Materials** sector, specifically the **steel industry** and its demand trends in China as of February 2025 [1][7]. Key Points and Arguments 1. **Demand Recovery Expectations**: Market expectations regarding demand recovery in the steel sector remain cautious, with a revised near-term pecking order established as Steel, Cement, Coal, Gold, Copper, Aluminum, and Lithium [1][7]. 2. **Steel Production Data**: - Total steel production in China from January 31 to February 6 was **8.1 million tons (mt)**, reflecting a **0.2% week-over-week (WoW)** increase and a **0.6% year-over-year (YoY)** increase. - Year-to-date steel production totaled **48.9 mt**, down **4.8% YoY** [2]. - Breakdown of production: - Rebar: **1.8 mt** (+3.5% WoW, -4.3% YoY) - Hot-Rolled Coil (HRC): **3.2 mt** (+0.2% WoW, +2.7% YoY) - Cold-Rolled Coil (CRC): **0.8 mt** (-1.7% WoW, +2.7% YoY) [2]. 3. **Steel Inventory Levels**: - As of February 6, total steel inventory was **16.7 mt**, up **6.4% WoW** but down **6.0% YoY**. - Inventory breakdown: - Steel mills: **5.2 mt** (+4.7% WoW, +2.3% YoY) - Traders: **11.5 mt** (+7.2% WoW, -9.4% YoY) [2]. 4. **Apparent Consumption**: - For the week of January 31 to February 6, apparent consumption was **7.1 mt**, a significant **44.6% WoW** increase and **20.7% YoY** increase. - Year-to-date apparent consumption was **43.3 mt**, down **16.4% YoY** [2]. - Breakdown of apparent consumption: - Rebar: **1.3 mt** (16x WoW, -91.6% YoY) - HRC: **3.0 mt** (+10% WoW, +11.8% YoY) - CRC: **0.8 mt** (+34.1% WoW, -0.3% YoY) [2]. Additional Important Insights - The report emphasizes the importance of monitoring high-frequency demand trends to identify potential investment opportunities and risks within the steel sector [1][7]. - The data indicates a mixed performance across different steel products, with rebar showing significant volatility in apparent consumption [2]. - The overall cautious sentiment in the market suggests that investors should remain selective and consider broader economic indicators when evaluating investment opportunities in the materials sector [1][7].

Asia Pacific Equity Research 05 February 2025 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. Weichai Power - H/A (852) 2800 8503 jenny.qiu@jpmorgan.com J.P. Morgan Securities (Asia Pacific) Limited/ J.P. Morgan Broking (Hong Kong) Limited Sunny Su (852) 280 ...

Summary of J.P. Morgan Global Commodities Research - Oil Demand & Inventory Tracker Industry Overview - The report focuses on the global oil industry, specifically analyzing oil demand and inventory levels as of January 2025. Key Points Oil Demand - Global oil demand increased by 1.5 million barrels per day (mbd) year-over-year in January, reaching a total of 101.5 mbd, exceeding monthly projections by 200 thousand barrels per day (kbd) [2][4][86] - The demand for heating fuels in the U.S. has surged, with the four-week average distillate demand at its highest since March 2022 [4][86] - In Asia, travel volumes during China's New Year holiday rose by 8% compared to the previous year, surpassing the forecast of 7% [4][86] - India anticipates a significant increase in travel due to a religious pilgrimage expected to attract 450 million devotees between January and February [4][86] Oil Inventories - Global observable oil inventories (crude and products) saw a net increase of 7 mb in the last week of January, driven by a 20 mb rise in crude oil inventories, partially offset by a 13 mb decline in oil product inventories [4][86] - Throughout January, global observable oil inventories experienced a drawdown of 78 mb, primarily due to a 58 mb reduction in crude oil stocks and a 20 mb decrease in oil product inventories [4][86] - OECD commercial oil stocks reported a net reduction of 24 mb in January, with a significant 31 mb reduction in oil product stocks, while crude oil inventories increased by 7 mb [3][4][86] Regional Insights - Five economies reported their oil consumption statistics, indicating varied trends across regions [4][86] - The U.S. saw a notable increase in crude oil inventories by 9 mb, marking the largest weekly increase since February 2024, while oil product stocks fell by 11 mb due to heightened demand for heating fuel [4][86] Additional Observations - The report highlights the impact of seasonal factors, such as winter heating needs in the U.S. and holiday travel in Asia, on oil demand [4][86] - The data suggests a potential continuation of upward momentum in oil demand into February 2025 [4][86] Conclusion - The analysis indicates a robust recovery in global oil demand, driven by seasonal factors and increased travel activity, while inventory levels reflect a complex interplay of supply and demand dynamics across different regions. The insights provided can inform investment strategies and risk assessments in the oil sector.

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the impact of tariffs on global equities, particularly focusing on the dynamics between the United States and its key trading partners, including Mexico, Canada, the European Union, and China [2][3][4]. Core Insights and Arguments - **Tariff Baskets**: J.P. Morgan has launched 11 new equity tariff baskets in collaboration with global equity strategists and analysts, covering approximately 1,000 companies to help investors navigate trade turbulence [2]. - **Current Tariff Situation**: The effective tariff rate on US imports is historically low at around 2.4%. However, proposed tariffs could significantly impact S&P 500 earnings, with an estimated EPS impact of ~$20, potentially erasing two-thirds of next twelve months (NTM) EPS growth [3][4][28]. - **Sector Exposure Changes**: - Mexico has increased its exposure to the US Auto and Industrial sectors, while Canada has seen a decline in Auto sector exposure but growth in Natural Resources [3][13]. - China’s leading export sector has shifted from Technology to Discretionary Retail due to tariff impacts [3][13]. - The EU, while largely unaffected in the current round, has a significant trade surplus with the US, which may become a negotiation target [3][4]. - **Market Volatility**: The market is expected to experience sudden bouts of volatility followed by recovery, with high stock dispersion being a consistent feature in 2025 [2]. Additional Important Insights - **Corporate Sentiment**: Negative sentiment has been observed in the Technology and Materials sectors, with a notable shift from the previous administration's focus on the Industrials sector [10]. - **Consumer Impact**: The implementation of tariffs could lead to an estimated annual cost of $2,000-$3,000 per household, particularly affecting low-end consumers who are already under pressure [12][33]. - **Trade Interdependence**: The interconnectedness of the US, Mexico, and Canada means that escalating trade tensions could pose significant challenges to their economies, especially for Mexico and Canada, which rely heavily on US exports [13]. - **Closing of De Minimis Loophole**: The potential removal of the de minimis exemption could lead to higher prices for consumer goods, significantly impacting e-commerce and retail sectors [14]. Conclusion - The evolving landscape of tariffs and trade policies presents both risks and opportunities for various sectors and companies. Investors should closely monitor these developments to assess their potential impacts on earnings and market dynamics.

China Insurance Revisiting market volatility during trade tensions; sector's beta appears to be higher compared to 2018 China's insurers allocate a significant portion of their AUM to A-share equities (9-18% of AUM), which is equivalent to a substantial portion of their book value (1.1x on average). As such, the sector's stock beta remains above 1 (Table 1), making China equity market volatility critical to their stock performance. In addition, the regulatory environment has been updated, with a notable 30% ...

Flash | 05 Feb 2025 11:49:26 ET │ 10 pages CITI'S TAKE MCT reported travel traffic and industry revs were up 5.9/7.0% yoy 501mn/Rmb677bn during 8-day CNY holiday, implying average spending per capita +1%, while MOT reported national passenger throughput up 5.8% with volume of railway/airline/roadway/waterway +5/+3/+6/+7% during the holiday. OTAs' share prices corrected today, which we attribute to 1) passenger throughput growth not picking up in last two days of CNY holiday as some investors had expected, e ...

V i e w p o i n t | 05 Feb 2025 03:57:24 ET │ 13 pages Asia FX and Rates Strategy China: Bond Supply/Demand Dynamics – How To Measure "Asset Famine"? CITI'S TAKE We discuss China bond demand and supply outlook for 2025, and come up with a way to proxy demand-supply balance to measure the degree of "asset famine" in China. Under our base case assumptions, the "asset famine" may be somewhat less severe in 2025, but the overall bond demand-supply balance may still skew towards the demand side. Rohit Garg AC +6 ...

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the Indian economy, particularly high-frequency economic indicators for January 2025, indicating a mixed but gradually improving trend in economic activity [1][2]. Core Insights and Arguments - **Monetary and Fiscal Policy**: The combination of monetary easing and increased fiscal spending is expected to support economic growth in the upcoming months [1][2]. - **High-Frequency Data Trends**: - GST collections reached INR 1.96 trillion, marking a 12.3% year-over-year growth, the highest in nine months, compared to 7.3% in December [6]. - Central government capital expenditure (capex) rose to INR 1.7 trillion in December, a 95.3% increase year-over-year, significantly higher than the average of INR 640 billion from April to November [6]. - Manufacturing PMI increased to a six-month high of 57.7 in January, driven by higher export orders, while services PMI decreased to 56.5, the lowest since November 2022 [6]. - Credit growth improved to 11.5% year-over-year as of January 10, up from 11.2% in December [6]. - Vehicle registrations for two-wheelers showed recovery, while passenger vehicle registrations slightly moderated year-over-year [6]. - The Naukri Job Index grew at a slower pace, influenced by base effects [6]. - Air passenger traffic remained robust, and consumer sentiment showed resilience, although power demand weakened to 2.5% year-over-year in January [6]. Important Trends to Monitor - **Government Spending**: Continuous monitoring of both revenue and capital expenditure trends is crucial [3]. - **Agricultural Output**: The winter crop (rabi) output will be tracked to assess food price volatility and rural demand strength [3]. - **Domestic Liquidity**: Observing domestic liquidity and financial conditions is essential for understanding economic stability [3]. - **External Environment**: The impact of trade and tariff developments, as well as the Federal Reserve's actions, will be significant [3]. Additional Insights - The government aims to maintain its capex at 3.1% of GDP for FY2026, while also investing in social infrastructure [2]. - The expected rate cut of 25 basis points on February 7 is anticipated to further stimulate growth [2]. - The strength in services exports is seen as a positive indicator for employment prospects [2]. Conclusion - The Indian economy is showing signs of recovery, supported by strong government spending and improving high-frequency indicators. Continuous monitoring of these trends will be essential for assessing future growth prospects and potential investment opportunities.

Summary of Texas Instruments Inc (TXN) Capital Management Call Company Overview - **Company**: Texas Instruments Inc (TXN) - **Industry**: Semiconductor - **Market Cap**: $164.49 billion [7] Key Points Capital Expenditure and Financial Targets - TXN reiterated its capital expenditure (capex) plans, maintaining a capex spend of $5 billion for 2025 and a floor of $2 billion for 2026, contingent on revenue growth [2][11] - The company is nearing the end of its capex investing cycle, which is expected to transition from a depreciation headwind to a tailwind in the coming years [11][21] Inventory and Sales Expectations - An analog inventory replenishment is anticipated in 2025, as sales remain approximately 25% below peak levels [2][12] - TXN is expected to benefit significantly from this replenishment due to its expanded 300mm manufacturing capacity [10][12] Earnings Projections - TXN is projected to achieve peak sales of $20 billion, with peak gross margins of 70% and peak operating margins of 52%, leading to a long-term peak EPS of over $10.00 [3][17] - Free cash flow (FCF) per share is expected to grow from $1.64 in 2024 to between $8 and $9 as sales recover to 2022 levels [4][31] Valuation and Investment Rating - The current target price for TXN is set at $235.00, reflecting a 30.2% expected return, with a Buy rating reiterated based on anticipated 100% EPS growth [5][35] - TXN trades at a premium to peers, justified by its quality and growth potential [36] Margin and Cost Structure - TXN's operating margins have decreased significantly, from 53.6% in 1Q22 to an estimated 29.5% in 1Q25, but are expected to recover as the high capex phase concludes [21] - The company plans to increase the proportion of revenue manufactured on its 300mm facility from 60% to 70% by 2026, which could reduce costs by 40% compared to 200mm wafers [26] Market Position and Risks - TXN has shifted its revenue mix towards industrial and automotive markets, increasing from 46% in 2015 to 69% in 2024, which may provide margin benefits [29] - Risks include dependence on the industrial end market, competition from companies like Analog Devices and Microchip, and potential product obsolescence due to lower R&D spending compared to competitors [41][42] Financial Performance Metrics - Projected revenue for 2025 is $16.7 billion, with a gradual increase to $20 billion by 2027 [9] - EPS estimates for 2025 are projected at $5.38, with further growth expected in subsequent years [6] Conclusion - Texas Instruments Inc is positioned to benefit from an anticipated recovery in analog inventory and has a strong outlook for earnings growth, supported by strategic capex and a favorable shift in market focus. The company remains a top pick in the analog semiconductor space, with a solid investment rating and growth potential.