Nikhil N Jadhav, CFA AC nikhil.nitin.jadhavi@citi.com +44 20 7508 0895 See AppendixA-1 for AnalystCertification, Important Disclosures and ResearchAnalystAffiliations Citi Research is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with companies covered in its research reports. As a result, investors should be aware thatthe Firm may have a conflict ofinterestthat could affectthe objectivity ofthis report. Investors should considerthis report as only a single fa ...

January 6, 2025 03:30 PM GMT RESEARCH Commodities The Oil Manual - Chartbook Source: Shutterstock Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision. For analyst certification and other important disclosures, r ...

January 6, 2025 05:00 AM GMT Global Economic Briefing | North America The Weekly Worldview: Our Global View After the Holiday Break M As we come back from a well deserved holiday break, we lay out our global views. Normally, our Year-Ahead Outlook is a roadmap for markets, but for 2025, it feels a bit more like a choose-your-own-adventure book (for the less familiar, these are American children's books that allow the reader to pick different narratives, and therefore different outcomes). Policy uncertainty ...

Summary of TSMC Conference Call Company and Industry - **Company**: TSMC (Taiwan Semiconductor Manufacturing Company) - **Industry**: Greater China Technology Semiconductors Key Points and Arguments 1. **Role in AI Semiconductor Supply**: TSMC is a key supplier for global cloud AI semiconductors, including NVIDIA's AI GPUs, indicating its significant position in the AI semiconductor market [1][6] 2. **Upcoming Analyst Meeting**: TSMC will host its 4Q24 analyst meeting on January 16, 2025, where it will disclose its 4Q24 earnings and 1Q25 guidance, which are critical for assessing AI demand sustainability [2][6] 3. **Revenue and Margin Guidance**: The market anticipates TSMC to provide conservative guidance for 1Q25 revenue and gross margin, with expectations of low-20% year-over-year growth in USD for 2025 and gross margins above 53% [2][6] 4. **Scenarios for Guidance Outcomes**: - **Scenario 1**: Guidance beats consensus, leading to a 4% stock price increase. - **Scenario 2**: Guidance aligns with consensus, resulting in a 2% stock price increase. - **Scenario 3**: Guidance falls below consensus, causing a 5% stock price decrease [3][4] 5. **Base Case Expectation**: The base case is Scenario 2, with a 60% probability assigned, expecting TSMC to over-deliver and raise its 2025 guidance in subsequent quarters [4][6] 6. **Stock Price Projections**: Projected stock prices based on scenarios are NT$1,170 for Scenario 1, NT$1,148 for Scenario 2, and NT$1,068 for Scenario 3 [5] Additional Important Content 1. **Market Capitalization and Trading**: TSMC's current market capitalization is NT$29,170,363 million, with an average daily trading value of NT$39,889 million [7] 2. **Earnings Per Share (EPS) Forecast**: EPS is projected to be NT$32.34 for FY23, NT$45.60 for FY24, NT$59.93 for FY25, and NT$76.86 for FY26 [7] 3. **Valuation Methodology**: The valuation is based on a residual income model with key assumptions including a cost of equity of 9.2% and an intermediate growth rate of 10% [9] 4. **Risks**: Potential risks include pricing pressures from major clients, lower visibility on AI demand, and increasing costs of overseas fabs [11] This summary encapsulates the critical insights from TSMC's conference call, highlighting its strategic position in the semiconductor industry, upcoming guidance expectations, and potential stock market implications.

Summary of the Aluminium Sector Equities Conference Call Industry Overview - The conference call focuses on the **Aluminium Sector**, particularly the dynamics of alumina and aluminum prices in China as of early 2025 [1][5]. Key Points and Arguments 1. **Alumina Price Decline**: - Alumina future prices have dropped over **10%** since the start of 2025, currently at approximately **RMB4,250**, compared to an average of **RMB3,800** in 2024 and **RMB3,100** in 2023. This indicates an easing supply shortage due to declining demand and increased production capacity from companies like Rio Tinto [2][5]. 2. **Aluminum Price Expectations**: - Aluminum prices are expected to decline in the short term due to seasonality but are projected to rebound post-Chinese New Year (CNY) holiday. Factors supporting this rebound include: - Capacity ceilings in China have been reached, limiting supply growth. - Structural demand growth from renewable energy sources is anticipated to offset weaknesses in the property sector [3][5]. 3. **Impact of Supply Dynamics**: - The supply situation for alumina is expected to improve further, with more bauxite shipments from Guinea as the rainy season ends. This could lead to a price correction in alumina, which would benefit integrated aluminum producers [2][3]. 4. **Company Fundamentals**: - Integrated Chinese aluminum companies, such as **Hongqiao** and **Chalco-H/A**, are believed to have strong fundamentals. A potential share price correction during the traditional off-season could be positive for these companies [3][5]. 5. **Valuation and Target Prices**: - **Chalco**: - Current price: **HKD4.41** (H-share) and **RMB7.18** (A-share). - Target prices maintained at **HKD6.40** and **RMB10.00**, implying upside potential of **45.1%** and **39.3%**, respectively [7]. - **Hongqiao**: - Current price: **HKD11.10**. - Target price set at **HKD16.00**, indicating a **44.1%** upside potential [7]. Risks Identified - Potential downside risks for both Chalco and Hongqiao include: - Lower-than-expected demand from property completions. - New resources and environmental regulations leading to higher production costs. - Geopolitical risks affecting resource acquisition [7]. Additional Insights - The coal-related business contributed approximately **4%** to Chalco's total revenue in 2023, with no expected increase in investment in this area as the company focuses on renewable energy and reducing coal consumption [7]. - The report emphasizes the importance of ongoing economic stimulus in China, which is expected to support aluminum demand, particularly from the renewable energy sector [3][5]. This summary encapsulates the key insights and projections regarding the aluminium sector and specific companies within it, highlighting both opportunities and risks as of early 2025.

6 January 2025 THIS CONTENT MAY NOT BE DISTRIBUTED TO MAINLAND CHINA China Rates 2025 Fixed Income Just how low can bond yields go? China China government bonds (CGBs) performed very well in December, delivering almost 2% in fixed income returns. The strong performance of CGBs may have caught some investors off guard as based on our tracking of EM local currency bond funds, portfolio managers were, on average, 3ppt underweight CGBs at the end of November. Continued economic uncertainty alongside the PBoC's ...

Auto Sales: Strong End to '24, Smooth Drive in '25? Domestic light vehicle sales for the month of December came in at a better than expected 16.8mm per the Bureau of Economic Analysis (BEA), a healthy outperformance versus the 16.5mm Bloomberg compiled median consensus estimate. December's SAAR showed mid-single digit y/y growth (+6%) and a sequential increase from the strong November print (see Table 1Decmbr 204Auto Salesumry Dashbord). The December auto sales print caps off 2024 at an average 15.8mm domes ...

6 January 2025 Asian Industrial Technology Global Automation: 2025 Outlook -- Acceleration and inflection Jay Huang, Ph.D. +852 2918 5746 jay.huang@bernsteinsg.com Dien Wang, Ph.D. +852 2918 5743 dien.wang@bernsteinsg.com Weibin Liang, Ph.D. +852 2918 5242 weibin.liang@bernsteinsg.com FA demand has turned the corner, albeit only barely (Exhibit 4 to Exhibit 6). FA stocks have not priced in an upcycle (Exhibit 1). In 2025, we expect growth to accelerate from 1H, margin to expand in 2H, and strong stock perfo ...

V i e w p o i n t | 06 Jan 2025 05:53:44 ET │ 21 pages Middle East Economics GCC: Balancing Oil Production Cuts and Diversification CITI'S TAKE Qatar — Growth is projected to climb this year to 2.8% from an estimated 1.7% in 2024. Kuwait — We look for a moderate pick-up in activity this year with GDP growing 1.5% after an estimated 2% contraction in 2024. Oman — Economic growth is expected to accelerate to 2.3% this year from an estimated 1.7% in 2024. Bahrain — GDP growth is forecast to quicken to 2.7% thi ...

January 6, 2025 05:02 AM GMT Multi-Industry | North America 2025 Outlook: More Similar Than Different See a return to positive revisions in 2025 behind sustained capex strength & tariff tailwinds. We maintain an Attractive view on US Industrials into 2025. The core pillars of the "Back to GDP +3" thesis from our early September launch have only strengthened — namely stronger & more durable growth behind Improved ROI on Efficiency + US Reshoring. Evolving geopolitics + a Trump presidency signals rising prote ...