Summary of the Conference Call on China Steel and Iron Ore Industry Industry Overview - The conference call focused on the **China Steel and Iron Ore** industry, providing insights into consumption trends, inventory levels, and production rates. Key Points Steel Consumption Trends - Apparent consumption of **rebar** continued to decline, while consumption of **flat products** remained relatively high [1] - Downstream consumption for rebar fell further by **10% week-over-week (WoW)**, attributed to holidays and the upcoming **Chinese New Year** [2] Inventory Levels - **Steel inventory** at traders increased by **75,000 tons (kt)**, or **1.0% WoW**, while inventory for long products rose by **2.9% WoW**. Conversely, inventory for flat products decreased by **0.4% WoW** [2] - **Steel inventory** at mills was reported at **3,491 kt**, down **0.3% WoW** [2] - **Iron ore inventory** at small and medium-sized mills increased by **9.9 kt**, or **4.7%**, from the previous week [3] - Inventory at ports decreased by **0.6% WoW**, totaling **142.9 million tons (mt)** [3] Production Rates - The **utilization rate** of 247 mills dropped by **0.58 percentage points (ppts) WoW**, reaching **85.6%** [4] - Average daily output for **long products** decreased by **3.5% WoW**, totaling **2.89 million tons (mnt)**, while output for **flat products** dropped by **0.6% WoW**, totaling **5.41 mnt** [4] - The **iron ore operating rate** at 126 sample mines was **60.9%**, down **3.2 ppts** compared to two weeks prior, with an average daily output of **383.9 kt**, down **5.0%** [3] Market Dynamics - The **steel demand** outlook remains cautious, with the industry facing challenges due to seasonal factors and inventory adjustments [6] - The **CISA (China Iron and Steel Association)** reported that member mills' production was **1.98 million tons per day** for mid-December, down **2.3%** from the preceding 10 days but up **2.5% year-over-year (YoY)** [4] Additional Insights - The **EAF (Electric Arc Furnace)** capacity utilization rate decreased by **0.34 ppts WoW**, reaching **52.45%** as of December 27 [4] - The overall sentiment in the industry remains **attractive**, indicating potential for recovery in the medium to long term [6] Conclusion - The China Steel and Iron Ore industry is currently experiencing a decline in rebar consumption and mixed inventory trends, with production rates also showing a downward trajectory. Seasonal factors and market dynamics are influencing these trends, but the long-term outlook remains cautiously optimistic.

Industry and Company Overview * **Industry**: Offshore oilfield services (OFS) * **Company**: COSL (China Oilfield Services Limited) * **Analyst**: UBS * **Date**: 2 January 2025 Key Points Industry Trends 1. **Offshore OFS Utilization and Day Rates**: The offshore OFS industry has been experiencing an upcycle since 2021, driven by rising oil prices and increased capex by global oil companies. Rig utilisation rates have been high, with average day rates for jack-ups, semi-subs, and drill ships increasing annually since 2022. * [2] 2. **Global Offshore Rig Utilization**: The average utilisation rate for offshore rigs in 2024 was 79%, with jack-up utilisation experiencing a temporary decline in Q324 due to service suspensions in the Middle East, followed by a recovery in Q424. * [2] 3. **Offshore Rig Day Rates**: Day rates for offshore rigs have remained on an upward trajectory in 2024, with rates for jack-ups, semi-subs, and drill ships increasing by 12%, 8%, and 16% respectively from the end of 2023. * [2] 4. **Global Offshore OFS Demand**: Global offshore OFS demand is expected to remain solid, with day rates for jack-ups, semi-subs, and drill ships projected to increase by 6%, 9%, and 9% respectively from 2026 to 2028. * [3] 5. **Regional Variations**: The Mediterranean, Southeast Asia, and Australia have seen the fastest growth in average day rates for jack-ups in 2024. Norway has maintained high day rates for semi-subs, with the average leading edge day rate increasing by 23% YoY. * [4] 6. **Rig Suspensions in the Middle East**: Some rigs in the Middle East were suspended from service in 2024 due to service suspensions. However, new contracts have been secured for a quarter of the suspended rigs, and demand is expected to recover in 2026. * [4] 7. **Supply Gap**: UBS expects a supply gap to emerge in 2030, requiring an investment of US$250-400bn/year to fill the gap, accounting for the natural decline at mature fields and the need for new projects. * [19] COSL Analysis 1. **COSL Drilling Business**: UBS has updated its analysis of COSL's drilling business and adjusted its 2024/2025/2026 earnings estimates. The company's drilling segment is expected to experience high growth in 2025, driven by new contracts for suspended rigs and higher day rates for some of its semi-subs. * [5] 2. **COSL Earnings Estimates**: UBS has adjusted its DCF-based price target for COSL from HK$10.80 to HK$10.60, implying a 10x 2025E PE. The company's 2025 net profit growth forecast is 40%. * [5] 3. **COSL Valuation**: COSL's 2025E PE of 6.6x is below the global OFS peer average of 11.9x, and its 2025E P/BV of 0.6x is below the global OFS peer average of 1.6x. * [5] 4. **COSL Rig Contracts**: UBS has provided a detailed breakdown of COSL's rigs subject to contract changes in 2025, including new contracts for suspended rigs and higher day rates for some of its semi-subs. * [40] 5. **COSL Financials**: UBS has provided a financial overview of COSL, including revenue, EBITDA, net profit, capex, EPS, DPS, ROE, and gearing ratio. * [42] Risks 1. **Oil Prices**: COSL's share price tends to track oil prices, which could impact sentiment on the stock. 2. **Deep-water Drilling**: The market may have higher earnings expectations for COSL from deep-water drilling offshore China, which faces higher risks than shallow-water drilling. 3. **Exchange Rates**: If the US dollar appreciates against the renminbi, there could be upside risk to COSL's earnings. 4. **Large Portion of Revenue from CNOOC**: While this represents reliable revenue, there is a risk that COSL may not raise rates in line with overseas peers. * [48]

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 January 1, 2025 09:00 PM GMT China Financials | Asia Pacific Banks' shares hitting new highs; what to do from here? Risk control and high dividend yields have sent banks shares to new highs. We believe first natural economic cycles bottom in China, a modest LPR cut of only 15-20 bps and resumption of interest rate reform could support banks' NIM and drive further bank outperformance in 2025. Attractive dividend yields and rational policy combo have driven major banks' shares to ...

Summary of Conference Call on China Property Market Industry Overview - The conference call focused on the **China Property** industry, specifically the performance of major developers in December 2024 and expectations for early 2025 [2][5]. Key Points and Arguments 1. **Sales Performance in December 2024**: - Major developers' contracted sales were down **10% year-on-year (y-y)** but up **11% month-on-month (m-m)** in December [2][3]. - The top 50 developers saw a **2% y-y increase** in sales, while the top 100 developers remained flat at **0% y-y** [3]. 2. **Yearly Sales Declines**: - Full-year sales declines for the top 50 and top 100 developers were **-26%** and **-27% y-y**, respectively [3]. 3. **State-Owned Enterprises (SOEs) Performance**: - SOEs outperformed with positive y-y growth, with notable performances from COLI (+76%), Jinmao (+66%), CR Land (+52%), and Yuexiu (+48%) [4]. - In contrast, private developers like Agile, Sunac, CIFI, and Country Garden experienced declines exceeding **50% y-y** [4]. 4. **Factors for SOE Outperformance**: - The outperformance of SOEs is attributed to better brand recognition, more new saleable resources in top-tier cities, and lower risks of stalled construction [4]. 5. **Sales Expectations for 1Q25**: - Sales are expected to remain decent in **1Q25**, with potential for positive y-y growth in February due to a low base and the earlier Chinese New Year [5]. - However, visibility on stabilizing housing sales in 2025 is low, particularly for primary sales due to significantly reduced land sales [5]. 6. **Policy Response**: - The housing policy response is expected to remain reactive, with any incremental stimulus likely muted until March [5]. - Faster and more coordinated policy actions are deemed necessary to support homebuyer confidence and sustain recovery [5]. Additional Important Insights - The divergence in sales performance highlights the challenges faced by private developers compared to their state-owned counterparts, indicating a potential shift in market dynamics [4]. - The data suggests a cautious outlook for the property market, emphasizing the need for supportive policies to enhance buyer confidence and stabilize sales [5]. This summary encapsulates the key insights from the conference call regarding the current state and future expectations of the China Property market, particularly focusing on the performance of major developers and the implications of government policies.

更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 January 2, 2025 06:02 AM GMT China Property | Asia Pacific Secondary Home Prices Weakened In December December secondary home prices in major cities witnessed m-m decline after a two-month up-trend amid diminishing policy impact. In combination with slightly increased listings and seasonality, there could be downside pressure on home sales in 1Q25. December transaction home prices weakened as expected, with -1.1% m-m (-9.8% y-y) in the ~50 sample cities we track (vs. +0.5% in No ...

Summary of Indian Banks Research Call Industry Overview - The focus is on the Indian banking sector, particularly the outlook for 2025, which is anticipated to be a Year of Easing for Indian Banks [2][20]. Key Themes and Insights 1. **Loan and Deposit Growth**: - Loan growth is expected to slow to 11-13%, leading to some cuts in EPS forecasts [2][3]. - Deposit growth has moderated to 11%, aligning with credit growth [3][30]. - The gap between loan growth (16%) and deposit growth (13%) has narrowed, addressing RBI concerns [2][4]. 2. **Regulatory Environment**: - RBI may implement a 50bps cut in policy rates in the first half of 2025, which could support growth and investments [4][38]. - The easing of liquidity stance and CRR by 50bps is expected to have a short-term drag on NIMs [4][42]. 3. **Asset Quality**: - Asset quality pressure is anticipated to ease in FY26, particularly for larger banks focusing on upper-tier clients [5][30]. - Unsecured retail loans are expected to see reduced pressure as provisions are taken upfront and disbursals slow down [5][44]. 4. **Operational Efficiency**: - Banks are controlling operational expenses by moderating branch and staff expansion, which is expected to continue into FY26 [6][30]. 5. **Capital Needs**: - With healthy ROEs and slower growth, banks have limited capital needs, although some PSU banks may require additional capital [7][30]. 6. **Valuation and Investment Recommendations**: - Valuations are considered attractive, with a narrowing earnings growth gap between banks and the market [8][20]. - Preferred banks include ICICI, Axis, HDFC Bank, and SBI, with Kotak upgraded to Buy and BOB downgraded to Hold due to slower deposit growth [8][9]. Important Metrics - **EPS Forecast Changes**: - Axis Bank: Target price INR 1,430 (previously INR 1,500) [9]. - ICICI Bank: Target price INR 1,600 (previously INR 1,550) [9]. - HDFC Bank: Target price INR 2,120 (previously INR 2,020) [9]. - SBI: Target price INR 970 (previously INR 1,030) [9]. Additional Insights - **Economic Indicators**: - Real GDP growth slowed to 5% in Q2 FY25 compared to 8% in FY24, while inflation remains sticky around 5% [2][30]. - The banking sector is expected to see a convergence in loan and deposit growth, with a pick-up anticipated in FY26/27 [30][31]. - **Market Performance**: - Nifty-Banks index increased by 6% in 2024, slightly underperforming the Nifty index, which rose by 9% [8][20]. - **Sectoral Performance**: - The MFI segment continues to face stress, which may impact mid-sized banks' earnings [5][44]. This summary encapsulates the key points discussed in the research call regarding the Indian banking sector, highlighting the anticipated trends, regulatory changes, and investment recommendations for 2025.

Industry and Company Overview **Industry**: China Consumer Staples, specifically focusing on the snack industry. **Key Themes**: 1. **Channel Shift**: The industry is witnessing a shift towards online and discount channels, with traditional offline channels losing market share. 2. **Pricing Pressure**: Both channels and consumers are adopting value-for-money strategies, leading to pricing cuts. 3. **Traditional Distributors Under Pressure**: Traditional offline distributors are facing challenges, with sales and profit growth slowing down. Company Analysis **Yankershop Food (002847.SZ)**: * **Rating**: Buy * **Key Points**: * Well-positioned to capture growth in snack discounters and major SKUs. * Strong online growth and partnerships with top-tier discounters. * Healthy investment cycle and potential positive catalysts from stronger CNY sales and ongoing discounter openings. * Valuation appears attractive compared to peers. **Three Squirrels (300783.SZ)**: * **Rating**: Neutral * **Key Points**: * Focus on new initiatives aligning with the value-for-money industry trend. * Sales CAGR expected to reach 29% over 2024-26E. * Building up in-house and margin-accretive offline business. * Valuation appears fair at the current price levels. **Chacha Food Co. (002557.SZ)**: * **Rating**: Sell * **Key Points**: * Core business (sunflower seeds) facing sales decline. * Nuts business facing increased competition and margin dilution risks. * Structural margin dilution if nuts continue to lead the company's growth. **Want Want China (0151.HK)**: * **Rating**: Sell * **Key Points**: * Product mix skewed to less healthy flavored milk. * Relatively conservative approach to marketing and distribution leading to market share losses and earnings deterioration. * Overseas market demand outlook relatively strong, but visibility of sales contribution of new product launches and channel expansion remains low. Additional Observations * **Online Exposure**: Snack companies' online exposure is still low compared to other consumer sectors, but has been on a rising trend. * **Discounters**: Fast store openings and consolidation in the discount channel. * **Consumer Trends**: Consumers are increasingly pursuing new products and new tastes, with taste and value-for-money being the most important factors for Gen Z consumers. * **Distributors**: Traditional offline distributors are under pressure, with sales per distributor declining in 1H24. Conclusion The snack industry in China is undergoing significant changes, with a shift towards online and discount channels, pricing pressure, and challenges for traditional distributors. Companies like Yankershop and Three Squirrels are well-positioned to benefit from these trends, while companies like Chacha Food and Want Want face challenges and risks.

Summary of Conference Call Notes on China Autos & Shared Mobility Industry Overview - The focus is on the electric vehicle (EV) market in China, particularly major brands like BYD, XPeng, Li Auto, NIO, and ZEEKR - The industry is experiencing a significant increase in sales, with December 2024 marking record sales for several brands despite concerns about future demand due to the potential end of subsidies Key Company Insights BYD - December sales reached 509,000 units, a 1% month-over-month increase and a 50% year-over-year increase, setting a new record [2][3] - Total sales for 2024 were 4.25 million units, surpassing the 4 million target [3] - Overseas sales in December were 57,100 units, a 103% increase, contributing to a total of 408,700 units for the year, at the lower end of market expectations [3] Li Auto - December sales grew to 58,513 units, a 20% month-over-month and 16% year-over-year increase, but fell short of the 4Q guidance of 160-170k units [4] - Full-year deliveries for 2024 were 500,500 vehicles, a 33% increase year-over-year [4] - Upcoming OTA update version 7.0 will enhance autonomous driving features [4] XPeng - December sales hit 36,695 units, a 19% month-over-month and 82% year-over-year increase, exceeding guidance [9] - Total annual deliveries for 2024 reached 190,000 units, a 34% increase from the previous year [9] - The company launched a second OTA upgrade for its P7+ model, introducing advanced ADAS features [9] NIO - December sales increased to 31,138 units, a 51% month-over-month and 73% year-over-year increase [10] - 4Q sales totaled 72,689 units, at the low end of guidance [10] - NIO launched its Firefly brand and the ET9 sedan, with pre-sales starting at RMB 148,800 [10] ZEEKR - December sales reached 27,190 units, a 1% month-over-month and 102% year-over-year increase [10] - Full-year deliveries for 2024 were 222,100 units, slightly below the target of 230,000 [10] - Plans for 2025 include launching two new models and aiming for 320,000 deliveries [10] Market Dynamics - The balance between order intake and sell-through in December was positive, but the lack of announcements regarding the extension of auto subsidies may dampen demand in 1Q 2025 [3] - Major OEMs reported strong order intake, indicating continued consumer interest despite potential subsidy changes [3] Additional Insights - The overall sentiment in the industry remains cautiously optimistic, with analysts expecting performance to be in line with market benchmarks in the coming months [5][32] - The upcoming "two sessions" in March 2025 may provide clarity on future government support for the EV sector [3] This summary encapsulates the key points from the conference call regarding the current state and future outlook of the electric vehicle market in China, highlighting significant sales achievements and strategic developments among leading companies.

Key Points Industry/Company Involved * No specific industry or company mentioned in the provided content. Core Views and Arguments * **Economic Calendar**: The document provides a detailed economic calendar for the United States in 2025, outlining the release dates of major economic indicators and FOMC meetings. This includes data such as employment reports, manufacturing indices, trade balances, consumer sentiment, and more. * **Morgan Stanley Estimates**: The calendar includes estimates from Morgan Stanley based on past patterns and historical data. This includes the NY Fed Survey of Consumer Expectations and Senior Loan Officer Survey. * **Accuracy and Completeness**: The document explicitly states that the information provided is based on generally available public sources and is believed to be reliable. However, it is not guaranteed to be accurate or complete. Other Important Content * **Contact Information**: The document provides contact information for Morgan Stanley, including address and phone number. * **Disclaimer**: The document includes a disclaimer stating that it is not an offer to buy or sell any security or a solicitation of an offer to buy or sell any security. It also states that the document is not a recommendation to participate in any particular transaction or trading strategy. * **Copyright Information**: The document includes copyright information for 2025, indicating that it is copyrighted material.

China A-shares Monthly Wrap Dec 2024: Market supported by onshore net inflows 更多资料加入知识星球：水木调研纪要 关注公众号：水木纪要 Global Markets Strategy 02 January 2025 Key market drivers: A-share indices have been largely narrowly range-bound over the past month (CSI300: +0.5%, CSI500: -2.2%, and CSI1000: -3.7%), while HSI (+3.3%) and HSCEI (+4.9%) recorded stronger rebounds (Figure 1). Most onshore investors we spoke with seemed to be convinced by state-owned funds' efforts to stabilize the A-share market, and hesitant to clos ...