February 5, 2025 03:36 PM GMT China Transportation | Asia Pacific Infrastructure Asia Pacific Industry View In-Line Measuring Risks from China – US Cross-Border E-commerce Growth Dynamics Key Takeaways What's new: The market is discussing potential downside risks to China-US cross- border e-commerce following the higher taxes on small parcels shipped from China to the US. Bear case – What if cross-border e-commerce demand is back to pre-Covid level? A down-cycle for air freight rates? We are unsure: Long ha ...

Summary of Thematic Equity Strategy Conference Call Industry Overview - The thematic equity market remains a growth market in 2025, with growth themes and key indices outperforming on an equally weighted basis, despite cap-weighted returns being influenced by the "Magnificent 7" stocks [1][2][3] Key Points Market Performance - Year-to-date, growth themes are outperforming value themes when measured on an equal-weighted basis, indicating a broadening of the growth trade beyond the Magnificent 7 [2][9] - The NASDAQ-100 has lagged behind the S&P 500 on a cap-weighted basis, but equal-weighted measures show that growth stocks are performing well [8][19] Investment Strategy - A balanced approach is recommended, focusing on incremental alpha opportunities within a Growth-Cyclicals/Defensives barbell allocation [3][10] - The strategy emphasizes managing risks associated with rising rates, AI disruptions, and tariffs, while maintaining exposure to growth, cyclicals, and defensives [7][43] Thematic Updates - Republic Services (RSG) has been added to the Thematic 30 recommended list, replacing Edison International (EIX) due to better expected returns and operational efficiency [5][35] - RSG is highlighted for its low market beta and expected improvement in return on equity (ROE) driven by operational efficiencies [36][37] Performance Metrics - Thematic 30 has outperformed the Russell 1000 benchmark by over 300 basis points, indicating strong performance amidst market volatility [29] - Growth themes have shown an average year-to-date total return of 4.68% on an equal-weighted basis, compared to 3.39% on a cap-weighted basis [25] Sector and Theme Analysis - Key themes include Artificial Intelligence, Digital Leisure, FinTech, and Pollution Solutions, with varying performance across sectors [14][27] - Notable performers include Wearable Technology (12.87% return) and Digital Leisure (12.31% return) on an equal-weighted basis, while Video Gaming has underperformed significantly (-6.28% return) [28][33] Additional Insights - The report emphasizes the importance of focusing on high-quality, less rate-sensitive exposures in defensives due to ongoing rate risks and inflation concerns [12][43] - The overall strategy suggests that investors should be patient and focus on incremental alpha opportunities rather than attempting to time market rotations [11][44] Conclusion - The thematic equity landscape in 2025 is characterized by a focus on growth, with a balanced approach recommended to navigate various market risks. The addition of Republic Services to the recommended list reflects a strategic shift towards companies with strong operational efficiencies and lower market sensitivity.

February 5, 2025 09:00 PM GMT China Equity Strategy | Asia Pacific Positions of Active Long-only Managers in China/HK Chinese equities continued to show outflow from foreign funds in January 2025, though at a slower pace vs. December 2024. Passive funds had US$0.7bn outflows and active funds had US $1.7bn outflows. EM LOs added underweights in China to 2.9ppt. Foreign domiciled funds flow: Chinese domestic funds flow: Short interest ( Exhibit 14 , Exhibit 15 ): M Update Morgan Stanley Asia Limited+ Chloe Li ...

J P M O R G A N CEEMEA Credit Research 05 February 2025 What we learned from meetings with 30 EM corporate investors Cautiously constructive; OW HY but shying away from riskier names; A 'carry-year' ahead We met/spoke with ~30 EM corporate credit investors (mostly real money, some fast, mostly dedicated, some cross-over / opportunistic) in London and US over the past 2 weeks with respect to CEEMEA credits. Key takeaways Investors remain generally constructive and engaged, but more defensively positioned Spr ...

5 February 2025 Global Energy Storage Global Energy Storage: Gigafactory expansion still strong but investment slowing Neil Beveridge, Ph.D. +852 2918 5741 neil.beveridge@bernsteinsg.com Brian Ho, CFA +852 2918 5772 brian.ho@bernsteinsg.com Hengliang Zhang +852 2918 7871 hengliang.zhang@bernsteinsg.com Global battery manufacturing capacity is estimated to grow by 43% y-o-y in 2025 which will exceed demand growth of 25-30%. Global battery capacity grew by 34% y-o-y to 2.8TWh in YE24 (vs. demand of 1.2TWh). C ...

Summary of Conference Call Notes Industry Overview - The report focuses on the **China services sector**, specifically the **Caixin China General Services Business Activity Index (PMI)** Key Points 1. **PMI Decline**: The Caixin services PMI decreased to **51.0 in January** from **52.2 in December**, indicating continued expansion in the service sector but at a slower pace [3][4] 2. **New Business Index**: The new business index fell to **51.0 in January** (down from **52.7 in December**), suggesting a slowdown in new business activity [4] 3. **Outstanding Business Index**: The outstanding business index decreased to **49.4 in January** (from **50.9 in December**), indicating a contraction in outstanding business [4] 4. **Export Orders**: The new export orders sub-index increased to **51.2 in January** (up from **48.9 in December**), suggesting improved demand for exports [4] 5. **Employment Sub-index**: The employment sub-index edged down to **48.8 in January** (from **49.4 in December**), reflecting a reduction in workforce as companies focus on efficiency [4] 6. **Price Indicators**: Input prices sub-index rose slightly to **50.8** (from **50.7 in December**), while output prices sub-index decreased to **50.3** (from **50.5 in December**), indicating squeezed margins [5] 7. **Cost Pressures**: Companies reported that higher raw material and labor costs contributed to the rise in input prices, but they are willing to absorb some costs to support sales [5] Additional Insights - The decline in employment is attributed to a lack of capacity pressure and a focus on cost-cutting measures by firms [4] - The overall sentiment indicates a cautious outlook for the service sector, with potential risks stemming from rising costs and reduced hiring [5]

Mild rise of polysilicon prices amid supply cut – The average market price of rod-type polysilicon rose 2-3% from Rmb36.5-40.6/kg to Rmb37.2-41.7/kg in January, while that of granular silicon also edged up 3% from Rmb38/kg to Rmb39/kg in the month, per price data from the China Silicon Industry Association. According to the Association, PRC monthly polysilicon output dropped 43.4% yoy and 6.6% mom to 970k MT in January. Most polysilicon suppliers are actively fulfilling the commitments of industry self-regu ...

Summary of Global Gas and Power Insights - February 2025 Industry Overview - The report focuses on the global liquefied natural gas (LNG) market, particularly the impact of China's new tariffs on US LNG imports and the subsequent effects on global trade flows and pricing dynamics. Key Points China's Tariff on US LNG - China announced a 15% tariff on US LNG imports effective February 10, 2025, which is expected to reshape global trade flows but have limited impact on Asian JKM LNG and European TTF natural gas prices [1][7][24] - In 2024, the US supplied only 5.6% of China's total LNG imports, and in 2023, only 4.0% of US LNG exports went to China, indicating a minimal direct impact on the overall market [7][24] Historical Context - The report references the 2019 scenario where China diversified its LNG imports away from the US due to tariffs, leading to a 12% year-over-year increase in total LNG imports from other countries [2][8] - US LNG exports grew by 68% year-over-year in 2019, compensating for the loss of demand from China with increased exports to Europe and other regions [10] Price Forecasts - Price forecasts for 1Q25 and 2Q25 TTF have been raised to $15.4/MMBtu and $15.0/MMBtu, respectively, reflecting a 14% and 11% increase from previous forecasts due to higher-than-expected European gas demand [4][21] - JKM price forecasts for 1Q25 and 2Q25 have also been increased to $14.4/MMBtu and $15.0/MMBtu, with a 3% and 11% increase from prior forecasts [5][22] Market Dynamics - European gas demand has been buoyed by lower temperatures and a decline in wind and hydro power generation, which fell by 18% and 27% year-to-date, respectively [4][21] - The potential reduction of LNG exports from Indonesia could tighten the global LNG market, although the actual impact may be muted due to high LNG prices dampening domestic demand [24] Long-term Outlook - With new US LNG export terminals coming online from 2025, TTF and JKM prices are expected to enter another down cycle post-2026, similar to the price declines observed in 2019 [3][15] - The long-term implications for US Henry Hub prices are complex, with potential LNG curtailments affecting market dynamics, but a constructive outlook on long-term prices remains [20] Additional Insights - The report highlights the interplay between AI developments and energy demand, suggesting that advancements in AI could lead to increased energy consumption, particularly in natural gas [20] - The report emphasizes the importance of monitoring Indonesia's LNG export policies and their potential impact on global supply dynamics [24] Conclusion - The global LNG market is currently facing significant shifts due to geopolitical factors, changing demand patterns, and evolving supply dynamics. The anticipated tariff on US LNG imports by China is expected to have limited immediate effects on pricing, but the long-term outlook remains uncertain with new export capacities and potential market adjustments.

Flash | 05 Feb 2025 07:29:32 ET │ 11 pages PDD Holdings Inc (PDD.O) Quick Thoughts On USPS' Suspension Of Inbound Parcels from China (Including Hong Kong) CITI'S TAKE USPS announced a temporary suspension of international inbound parcels from China (including Hong Kong) effective 4-Feb. We believe this is likely aimed at ensuring its systems are integrated with US CBP system on latest custom clearance procedures following the implementation of new tariffs by US on imports from China. We estimate ~30-50% of ...

February 5, 2025 07:50 AM GMT Investor Presentation | Japan Energy & Utilities: Industry View In-Line Focus in 2025: 1) earnings outlook, 2) changes in management stances, 3) the Japanese government's Seventh Basic Energy Plan and the new GHG emissions target. Key Takeaways Related report: Japan Energy & Utilities Industry: P/B Enhancement Plans (Jan 2025) (9 Jan 2025) Next (7th) Strategic Energy Plan Draft Calls for Making Most of Renewables and Nuclear Power (18 Dec 2024) Japan's Nuclear Reboot (11 Oct 20 ...