Summary of the Conference Call on Greater China Technology Semiconductors Industry Overview - The report focuses on the **Greater China Technology Semiconductors** industry, specifically analyzing the performance of Taiwan's tech companies in December 2024 [1][2]. Key Financial Performance - **December Revenue**: Taiwan's tech companies experienced a **1% decrease month-over-month (MoM)** but a **35% increase year-over-year (YoY)**. Notably, several AI server supply chain companies achieved record monthly revenues [4][2]. - **Performance by Segment**: - **Datacenter/Smartphone Hardware and Packaging & Testing** companies exceeded expectations. - **Virtual Reality (VR), semiconductor materials, and thermal solutions** underperformed relative to expectations [4][2]. Investment Preferences - **Preferred Stocks**: The report recommends stocks with strong order visibility or leading market positions, including: - TSMC - KYEC - AllRing - ASMedia - Hon Hai - AVC - King Slide - E-Ink - Accton - Wiwynn [4][2]. - **Underweight Recommendations**: The report identifies Nanya Technology, Macronix, and NYPCB as key underweight (UW) stocks [4][2]. Market Outlook - The overall industry view is classified as **In-Line**, indicating that the performance of the semiconductor sector is expected to align with broader market trends over the next 12-18 months [2][4]. Additional Insights - The report emphasizes the dominance of **Artificial Intelligence (AI)** in driving revenue growth within the semiconductor sector, highlighting its critical role in shaping future market dynamics [1][2]. - Analysts express a cautious outlook on segments that did not meet expectations, suggesting potential risks for investors focusing on those areas [4][2]. Conclusion - The December revenue wrap-up indicates a mixed performance across Taiwan's tech companies, with AI-related sectors showing strength while others lagged. Investment strategies should focus on companies with robust order visibility and market leadership to navigate the current landscape effectively [4][2].

Summary of Key Points from the Conference Call Industry or Company Involved - The discussion primarily revolves around the macroeconomic outlook for 2025, focusing on the S&P 500, bond markets, oil prices, and the Chinese equity market. Core Insights and Arguments 1. **S&P 500 Performance**: The S&P 500 is expected to rise more than 20% for a third consecutive year, with a recommendation to buy stocks categorized as "Enablers, Adopters, and Adapters" in the AI sector [3][4][11] 2. **Earnings Estimates**: The consensus EPS estimate for the S&P 500 is $274, reflecting a 14.6% year-over-year growth. Historical trends suggest that estimates typically decline over the year, but this may not happen in 2025 [21][23][29] 3. **Bond Yields**: There is a significant expectation that 10-year U.S. bond yields will remain between 4% and 5%. A surprise move outside this range could impact equity markets [34][35] 4. **Oil Prices**: A potential decline in WTI oil prices below $65 per barrel is anticipated, influenced by geopolitical developments and inflation concerns [41][45][49] 5. **Chinese Equity Market**: There is a possibility that China could emerge as the best-performing equity market in 2025, despite current economic challenges. The recommendation is to buy the iShares China Large Cap ETF (FXI) [50][67] Other Important but Possibly Overlooked Content 1. **Valuation Concerns**: Current stock valuations are high, with the S&P 500 trading at 24.6x TTM earnings, which raises concerns about sustainability in a rising yield environment [6][11] 2. **Economic Growth Forecast**: The U.S. economy is projected to grow at 2.25% in 2025, but a strong U.S. dollar is expected to negatively impact S&P 500 EPS by approximately 0.3% for each 1% increase in the dollar's value [26][29] 3. **Credit Market Dynamics**: The private credit market has grown significantly, and a potential downturn in credit markets could occur without a recession, driven by various economic uncertainties [68][74] 4. **Investment Strategies**: Specific investment strategies include buying the Invesco S&P 500 Equal Weight ETF (RSP) and shorting the iShares Investment Grade Corporate Bond ETF (LQD) due to potential vulnerabilities in the credit market [32][75] This summary encapsulates the key points discussed in the conference call, providing insights into the expected market dynamics for 2025 and potential investment strategies.

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses trends in retail investor behavior in the context of the US and European markets, focusing on thematic investments, private markets, and money market funds. Core Themes and Insights 1. **Top Investment Themes for 2025**: - Innovation, Security/Defence, and Core beneficiaries of AI are the most popular themes among retail investors. Security/Defence has gained traction particularly in the US and Germany, with 36% of respondents indicating interest in this area [2][18][22]. - Preferred stocks in these themes include Rheinmetall in Europe and Fortinet in the US [2][7]. 2. **Private Markets Engagement**: - Retail investor engagement in private markets is increasing, with only 1-4% of wealth currently allocated to these assets. However, 20% of respondents made incremental investments in private markets over the last year, indicating a doubling of previous levels [3][41]. - Preferred investment vehicles for private markets include CVC and EQT in Europe, and Blackstone in the US [3][43]. 3. **Money Market Fund Trends**: - Money market funds (MMFs) have reached record highs with $9.6 trillion in assets under management (AuM). Despite this, inflows are expected to slow rather than reverse, as 72% of retail investors are open to reallocating funds to riskier assets under certain conditions [4][69][81]. - The survey indicates that 73% of retail investors with MMF exposure would consider moving to equities if certain conditions are met, such as a material decline in interest rates [4][82]. 4. **Demographic Insights**: - Younger investors, particularly Gen Z, show a higher propensity to invest in Defence/Security due to shifting geopolitical landscapes. This demographic is also more inclined to increase their investments in equities as life expectancy rises [14][32][58]. - The survey highlights a barbell investment approach among older generations, with increased allocations to both equities and MMFs [14][58]. 5. **Bancassurance Model Strength**: - The bancassurance model remains strong in Europe, with many retail investors using their primary banks for investments. This trend supports the growth of banks like KBC and Intesa [5][107]. Additional Important Insights - **Geographic Preferences**: Retail investors show a balanced interest in investing in Europe and the US, with a notable preference for global investments among higher-income European respondents [109][114]. - **Market Conditions Impacting Investment Decisions**: Factors such as improving personal finances, positive market momentum, and interest rate changes are significant motivators for retail investors considering reallocating their investments [87][100]. Conclusion - The findings from the survey indicate a shift in retail investor preferences towards thematic investments, particularly in innovation and security/defense, alongside a growing interest in private markets. The stability of money market funds remains a key consideration, with demographic trends influencing investment behaviors across different age groups.

January 12, 2025 10:13 PM GMT ADM & Bunge | North America Morgan Stanley & Co. LLC M Update 45Z Guidance Update The U.S. Treasury released its long-awaited preliminary guidance for the Clean Fuels Production Credit (45Z). The updated guidance (issued Friday) includes both: i) a notice of intent to propose regulations on the 45Z credit; and ii) a notice providing the annual emissions rate table for 45Z (please see below for more details). The response from industry participants has been mixed, highlighting t ...

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **China SMID Internet** sector, which includes companies with market capitalizations between **$10 billion and $50 billion**. Key players discussed include **Trip.com (TCOM)**, **Baidu (BIDU)**, and **Tencent Music (TME)** [1][2][3]. Core Themes and Insights 1. **Market Dynamics**: The China SMID Internet sector is characterized by two main themes: - **Single vertical platforms** (e.g., travel, mobility) that are structural winners in their categories. - **New media companies** (e.g., short-form video, streaming music) that face strong competition and have more tactical business models [1][2]. 2. **Consumer Spending Shift**: There is a notable shift in consumer spending from material goods to services and experiences, driven by post-COVID recovery and changing consumer preferences, particularly among Gen-Z [2][12]. 3. **AI and Product Innovation**: Companies are expected to focus on AI applications and product innovation, with a need for unique data ecosystems to effectively monetize these innovations [2][3][12]. 4. **Travel Sector Recovery**: The travel industry is anticipated to normalize in 2025, with robust growth expected in both domestic (approximately **10%** growth) and outbound travel (approximately **18-20%** growth) as the last effects of COVID recovery phase out [4][38]. Company-Specific Insights Trip.com (TCOM) - **Growth Projections**: TCOM is expected to maintain strong growth rates, with an estimated **18% revenue growth** for 2025, driven by international expansion and sustained domestic growth [40]. - **Market Position**: TCOM is gaining market share in the online travel agency (OTA) space, currently at **45% penetration**. The company is expected to continue expanding its offerings, including customized tours and car rentals [5][39]. - **Earnings Outlook**: The long-term earnings per share (EPS) growth is projected at mid-teens, supported by operational leverage and a strong competitive position [5][37]. Baidu (BIDU) - **Monetization Challenges**: Baidu is facing difficulties in monetization, with recovery expected to extend into **2026**. The company is struggling with lower ad rates and building an effective AI ecosystem [5][9]. - **Market Rating**: Baidu is rated as **Market-Perform**, with a target price of **$87**, reflecting a cautious outlook on its recovery trajectory [9][10]. Tencent Music (TME) - **SVIP Program Expansion**: TME plans to enhance its SVIP products, which could drive user growth and increase average revenue per user (ARPU) above current levels. The company is rated as **Outperform** with a target price of **$13** [5][10]. Additional Important Insights - **Investment Implications**: The overall investment thesis suggests that TCOM is a long-term quality compounder in the travel sector, while Baidu's challenges may limit its performance relative to peers [9][10]. - **Consumer Behavior Trends**: The shift towards experiences is expected to continue, with increased spending on travel, entertainment, and dining, indicating a robust recovery in consumer services sectors [12][17][25]. Conclusion The China SMID Internet sector is poised for growth, particularly in travel and new media, with TCOM showing strong potential for long-term performance. Baidu faces significant challenges, while TME is positioned to capitalize on its subscription model. The overall market dynamics reflect a structural shift in consumer spending and a focus on innovation and unique content.

January 12, 2025 07:25 AM GMT January 12, 2025 08:35 AM GMT January 12, 2025 09:24 AM GMT | M | | | | --- | --- | --- | | | | Update | | January 12, 2025 07:25 AM GMT January 12, 2025 08:35 AM GMT January 12, 2025 09:24 AM GMT | | | | Haitian International Holdings Limited | Asia Pacific | Morgan Stanley Asia Limited+ | | | | Sheng Zhong Equity Analyst | | | China BEST Conference | Sheng.Zhong@morganstanley.com | +852 2239-7821 | | | Chelsea Wang | | | | Equity Analyst Jinlin.Wang@morganstanley.com | +852 2 ...

Summary of J.P. Morgan's 2025 Internet Sector Survey Industry Overview - **Industry**: Internet Sector - **Date**: January 12, 2025 - **Survey Participants**: Nearly 100 investors Key Findings Market Performance Expectations - **US Internet Sector**: ~79% of respondents expect market-cap weighted Internets to rise more than 5% in 2025, with 38% anticipating increases of 15% or more [2][5] - **S&P 500**: Only ~66% expect the S&P 500 to increase by more than 5% [2][5] Economic Outlook - **Recession Probability**: ~76% of respondents believe there is a 25% or less chance of a recession in 2025 or the first half of 2026 [2][5] Tailwinds for the Internet Sector 1. **Advances in Technology & Innovation/New Products**: 17% [7][25] 2. **Return on AI Investments**: 14% [7][25] 3. **Upward Earnings Revisions**: 13% [7][25] Headwinds for the Internet Sector 1. **Lack of AI Monetization**: 19% [7][30] 2. **Heavy Capex/Margin Compression**: 17% [7][30] 3. **Unattractive Valuation**: 17% [7][30] Generative AI Expectations - **New Applications**: 37% expect compelling new GenAI agents and applications [2][36] - **Revenue Contribution**: Only ~6% expect material revenue contributions from GenAI/LLMs [2][36] Stock Performance Predictions - **Best Performing Internet Stock**: GOOG/L is expected to be the best performer among Internet Mag 7 stocks with 43% of respondents [2][46] - **Worst Performing Internet Stock**: META is anticipated to be the worst performer with 46% of respondents [2][49] - **Best Performing Large-Cap Stock**: UBER is expected to lead with 40% [2][56] - **Best Performing Mid-Cap Stock**: RDDT is expected to lead with 22% [2][61] - **Best Performing Small-Cap Stock**: Z/ZG is expected to lead with 18% [2][67] - **Best Performing Sub-Sector**: Subscription-Based Companies (26%) and Online Ads (23%) are expected to perform best [2][77] Investor Preferences - **Rideshare/Food Delivery**: UBER is preferred by 51% of respondents [2][81] - **Online Travel**: BKNG is favored by 38% [2][81] - **Video Games**: RBLX and TTWO are both favored by 28% [2][81] Turnaround Stories - **Best Turnaround Stories**: UBER (31%), PINS (16%), and ABNB (15%) are viewed as the best turnaround stories for 2025 [2][81] Additional Insights - **Investor Composition**: 55 Long Only, 30 Hedge Fund, and 5 Others participated in the survey [2][5] - **Survey Timing**: Conducted from January 3 to January 10, 2025 [2][12] This comprehensive survey provides a positive outlook for the Internet sector in 2025, with significant expectations for growth driven by technological advancements and AI investments, despite some concerns regarding valuation and profitability.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: US Large Cap Banks - **Outlook for 2025**: Constructive on bank stocks with expectations of EPS growth accelerating and P/E multiples expanding [5][16][13] Core Insights - **EPS Growth**: Anticipated high single-digit to low double-digit EPS growth in 2025 and 2026, following minimal growth in 2024 [5][16] - **Factors Driving Growth**: - Accelerating loan growth - Declining funding costs - Increased fee income - Return of positive operating leverage - Measured increase in provisions for credit losses - Relatively stable tax rates - Lower share count and higher book values [5][16] - **Historical Context**: The growth formula mirrors the persistent earnings growth seen from 2011 to 2019 [5][16] - **Consolidation**: Expectation of accelerated industry consolidation, with a focus on disciplined buyers [5] Market Volatility Outlook - **2025 Volatility Expectations**: Market volatility influenced by pro-growth policies and inflationary implications, with potential for high dispersion in policies and market reactions [6][18] - **AI and Policy Impact**: The US is leading in AI advancements, which may create divergent market conditions [6][18] Sovereign Climate Performance - **Climate Risk**: Sovereign bonds represent systemic climate risk, affecting asset valuations and credit ratings [6][24] - **Framework for Assessment**: Expanded Barclays Sovereign Emissions Model to assess climate performance across 70 countries, covering 85% of emissions and 90% of global GDP [6][24] Key Data Points - **Bank Performance**: The BKX index increased by 32.8% in 2024, recovering from a 4.8% decline in 2023 [15] - **Market Concentration**: The top 10 stocks in the S&P 500 represent a record percentage of the index weight, indicating high concentration risk [7] Additional Insights - **Investor Sentiment**: Caution advised regarding potential missed opportunities due to excessive caution in the face of market volatility [6] - **Economic Indicators**: Strong economic performance with inflation concerns, leading to speculation about future Fed rate hikes [39][47] Conclusion - The outlook for US Large Cap Banks in 2025 is positive, driven by several growth factors and a favorable economic backdrop, despite potential market volatility and climate risks impacting sovereign bonds.

Summary of Shenzhen Goodix Technology Co Ltd Conference Call Company Overview - **Company**: Shenzhen Goodix Technology Co Ltd (603160.SS) - **Industry**: Greater China Technology Semiconductors - **Current Price**: Rmb75.39 (as of January 9, 2025) - **Market Cap**: Rmb34,358 million - **Price Target**: Raised from Rmb62.00 to Rmb81.00 Key Points Industry and Market Dynamics - **Smartphone Market Recovery**: The smartphone inventory de-stocking has shifted to re-stocking in 2024, indicating a market recovery. Consumption subsidies for smartphones will be extended nationwide in 2025, which is expected to positively impact smartphone OEMs and supply chain companies [2][11]. - **Ultrasonic Fingerprint Adoption**: The adoption of ultrasonic fingerprint technology is anticipated to increase, particularly with the rise of flexible OLED displays. The price of ultrasonic fingerprint sensors has decreased to US$2-3 from US$10, making it more competitive against optical fingerprint sensors priced around US$1. Expected adoption rates are ~8% in 2025 and ~12% in 2026, potentially generating Rmb408 million and Rmb768 million in revenue for Goodix in those years, respectively [3][19]. Product Development and Revenue Growth - **Light Sensor Market**: Light sensors are rapidly growing, with a total addressable market (TAM) of around US$1 billion in 2022, projected to grow at an 8% CAGR from 2022 to 2026. Goodix aims to capture market share among Chinese smartphone OEMs due to its high-precision and compact light sensor technology [4][20][21]. - **New Product Lines**: Goodix has started shipments of NFC+eSE security chips and has made progress with healthcare sensor chips. These developments are expected to contribute to revenue growth [5]. Financial Performance and Projections - **Earnings Growth**: Goodix is expected to achieve a 17.8% earnings CAGR from 2024E to 2027E. The company’s EPS is projected to rise from Rmb0.36 in 2023 to Rmb1.72 in 2026 [5][31]. - **Revenue Estimates**: Projected revenues are Rmb4,408 million for 2023, Rmb4,339 million for 2024E, Rmb5,093 million for 2025E, and Rmb6,024 million for 2026E [53]. Valuation and Investment Thesis - **Valuation Metrics**: The new price target of Rmb81 implies a 2025e P/E of 55.0x, aligning with the company's historical average. The valuation reflects higher earnings estimates driven by ultrasonic fingerprint and light sensor contributions [25][34]. - **Investment Risks**: Potential risks include slower adoption of ultrasonic fingerprint solutions, geopolitical tensions affecting Huawei smartphone shipments, and aggressive pricing competition in the fingerprint sensor market [30][42]. Conclusion - **Outlook**: The overall outlook for Shenzhen Goodix Technology Co Ltd is cautiously optimistic, with expectations of recovery in the smartphone market and growth in new product lines. The company is positioned to benefit from technological advancements and market trends, although it faces certain risks that could impact its performance [42][25].

Summary of Key Takeaways from the Conference Call Industry Overview - The conference call focused on the **Semiconductors** industry, particularly companies involved in AI infrastructure and related technologies. [1] Core Company Insights Analog Devices (ADI) - **Outlook**: Management maintains a constructive view, expecting high-single digit year-over-year growth in Industrial revenue for CY2025, which constitutes 46% of total revenue. [5] - **Revenue Drivers**: Strong demand in Test & Instrumentation and Aerospace & Defense sectors, along with robust EV demand in China, are key revenue drivers. [5] - **AI Revenue**: Currently generates approximately $400 million in annual revenue from AI-related products. [5] - **Valuation**: Despite a P/E of 31x, the stock is expected to grow into this multiple due to higher revenue and improved cost absorption. [5][6] Credo Technology (CRDO) - **Growth Drivers**: Positive outlook driven by the adoption of Active Electrical Cables in AI compute infrastructure and evolving network architectures. [10] - **Revenue Forecast**: Expected revenue growth from $193 million in FY2024 to $796 million by FY2027. [9] - **Risks**: Customer concentration and competition are noted as potential risks. [11] Lam Research (LRCX) - **Market Position**: Expected to outgrow the Wafer Fab Equipment market due to advancements in technology transitions and strength in HBM. [15] - **Revenue Forecast**: Revenue projected to grow from $14.9 billion in FY2024 to $20.9 billion by FY2027. [14] - **Risks**: Weaker demand in NAND and potential export restrictions are highlighted as risks. [16] Marvell Technology (MRVL) - **AI Revenue**: Management is confident in exceeding AI revenue forecasts of $1.5 billion for FY2025. [20] - **Market Trends**: Emphasis on networking solutions as hyperscalers transition to larger compute clusters. [20] - **Revenue Growth**: Expected revenue growth from $5.5 billion in FY2024 to $11.9 billion by FY2027. [19] - **Risks**: Moderation in AI spending and increased competition are noted as risks. [21] Micron Technology (MU) - **Market Conditions**: Management expects normalization in customer inventory by spring, leading to improved business conditions. [25] - **Revenue Forecast**: Revenue projected to grow from $25.1 billion in FY2024 to $46.1 billion by FY2027. [24] - **Risks**: Weaker demand for consumer electronics and lack of supply discipline are potential risks. [26] Nvidia (NVDA) - **Growth Drivers**: Investments in AI infrastructure by major hyperscalers are expected to drive growth. [30] - **Revenue Forecast**: Revenue expected to grow from $60.9 billion in FY2024 to $242.4 billion by FY2027. [29] - **Risks**: Decline in AI spending and GPU export restrictions are highlighted as risks. [31] ON Semiconductor (ON) - **Market Outlook**: Management expects sequential revenue growth to follow sub-seasonal patterns, with a focus on intelligent power and sensing technologies. [35] - **Revenue Forecast**: Revenue projected to decline slightly before recovering to $7.5 billion by FY2026. [34] - **Risks**: Weakness in key end-markets and increased competition are noted as risks. [36] Skyworks Solutions (SWKS) - **Market Position**: Near-term fundamentals are tracking as expected, with potential for revenue growth in CY2025 and CY2026. [40] - **Revenue Forecast**: Expected revenue growth from $4.2 billion in FY2024 to $4.8 billion by FY2027. [39] - **Risks**: Fluctuations in smartphone demand and market share are potential risks. [41] Texas Instruments (TXN) - **Market Position**: Despite a strong product portfolio, the company is rated as a Sell due to high valuation compared to peers. [45] - **Revenue Forecast**: Revenue expected to decline slightly before recovering to $19.1 billion by FY2026. [44] - **Risks**: Valuation concerns and potential weakness in key markets are noted. [46] Additional Insights - The overall sentiment among companies enabling AI infrastructure is optimistic, while others express caution due to demand uncertainty and inventory challenges. [1] - The conference highlighted the importance of adapting to evolving market conditions and technological advancements in the semiconductor industry. [1]