First Read: China Property 19 December 2024 ab 12 shuinu9870 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 shuinu9870 First Read: China Property 19 December 2024 ab 13 Unless otherwise indicated, please refer to the Valuation and Risk sections within the body of this report. For a complete set of disclosure statements associated with the companies discussed in this report, including information on valuation and risk, please contact UBS Securities LLC, 1285 Avenue of Americas, New York, NY 10019, USA, Attention: Investment R ...

Industry and Company Overview * **Industry**: China Entertainment, specifically focusing on short and mini dramas. * **Key Company**: Hongguo Drama (ByteDance Group), a free short drama app. * **Analyst Firm**: Goldman Sachs China Entertainment. Key Points 1. **Rapid Growth of Short and Mini Drama Industry**: * The short and mini drama industry has experienced significant growth, with a TAM of RMB 50 billion in 2024E, surpassing the domestic box office of the movie industry. * The industry is expected to grow at a 22% CAGR from 2024 to 2027E, reaching RMB 91 billion by 2027E. * The format is gaining popularity due to its convenience, affordability, and diverse content offerings. 2. **Monetization Model Shift**: * The monetization model is shifting from In-App Purchase (IAP) to In-App Advertising (IAA), with IAA expected to account for 70% of total revenue by 2027E. * The freemium model, particularly with Hongguo Drama, is becoming increasingly popular, driven by its free access and ad-supported content. 3. **Key Players and Value Chain**: * Key players include short drama producers, advertising platforms (e.g., Douyin, Kuaishou, Tencent), and content producers/IP owners. * Advertising platforms, particularly Douyin and Kuaishou, are expected to benefit significantly from the rising short drama TAM and advertising spend. * Producers typically earn around 12% of total revenue, with the majority of revenue going to advertising platforms for marketing and user acquisition. 4. **Overseas Opportunities**: * The overseas short drama market is still in its early stages, with the US being the largest market. * The overseas TAM is expected to reach over US$10 billion with 200-300 million users in the future. * Challenges include enriching localized content offerings and improving profitability due to higher production costs in overseas regions. 5. **Impact on Long-Form Video (LFV) Platforms**: * The rise of short and mini dramas is gaining time share and may affect content consumption habits, potentially challenging LFV incumbents like IQ and Mango. * LFV platforms are increasingly introducing mini and short dramas to their content libraries to stay competitive. Potential Winners and Losers * **Winners**: * Advertising platforms (e.g., Douyin, Kuaishou, Tencent) * Short drama producers * Hongguo Drama (ByteDance Group) * **Losers**: * LFV platforms (e.g., IQ, Mango) * Traditional LFV producers

Industry and Company Overview - **Industry**: Life Science Tools & Diagnostics - **Survey Source**: J.P. Morgan survey - **Respondents**: 60 investors, including 43% from long-only funds and 57% from L/S funds - **Geography**: 90% based in the United States, 8% in Europe, and 2% in APAC Key Findings - **Overall Sentiment**: Cautiously optimistic with lingering concerns on China and pharma spending - **Upside Potential**: NTRA identified as having the greatest upside potential to consensus numbers for 2025, followed by TMO and DHR - **Downside Risk**: ILMN and DHR selected as having the greatest downside potential - **M&A Activity**: 57% of respondents expect a moderate increase in M&A activity in 2025, with 29% anticipating a more significant rise compared to 2024 - **Market Growth**: 42% of respondents believe the Life Science Tools market will grow +MSD in 2025, with 38% expecting +LSD growth in the instruments market - **Risk Factors**: China weakness and pharma spending identified as the biggest risk factors for 2025 - **Long Ideas**: TMO and DHR selected as top large-cap stocks to buy, with BRKR, GH, and RGEN as top mid-cap stocks - **Short Ideas**: ILMN, DHR, and WAT identified as top large-cap stocks to short, with TXG, RGEN, and CRL as top mid-cap stocks to short Subsector Analysis - **Core Tools**: Most likely to outperform in 2025, with Dental and Synbio expected to underperform - **Bioprocessing**: Expected to grow +MSD or +HSD in 2025, with 40% of respondents expecting +HSD growth - **Instruments**: Expected to grow +LSD in 2025, with 38% of respondents expecting +LSD growth Catalysts and Positioning - **Catalysts**: Incoming Trump Administration policies (tariffs, NIH budget, HHS and CMS confirmations, DOGE, etc.), China stimulus, and company-specific data readouts - **Positioning**: Mixed sentiment in the healthcare sector, with Medtech viewed as a safer spot amid uncertainty Conclusion The survey indicates a cautiously optimistic outlook for the Life Science Tools & Diagnostics industry in 2025, with investors expecting moderate growth and increased M&A activity. However, concerns remain regarding China's economic weakness and pharma spending. The survey also highlights specific companies and subsectors that investors believe will outperform in the coming year.

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **China Chemical New Materials** sector, focusing on companies like **Tinci Materials**, **Beijing SinoHytec**, and **Valiant Co.** [6][10][14] Company Insights Tinci Materials - Tinci is the largest global producer of **LiPF6** and electrolytes by capacity, with a highly integrated value chain that enhances cost competitiveness [6] - The company is expanding production capacity internationally and has developed additional battery materials such as **LiFSI** and electrolyte additives [6] Beijing SinoHytec - SinoHytec is a leading manufacturer of **fuel cell systems** in China, with strong R&D capabilities and partnerships with major commercial vehicle manufacturers [10] - The company has seen a rebound in market share to approximately **30%** in 2024, despite intense competition [110] - Forecasts indicate a **30% revenue CAGR** for SinoHytec from 2024 to 2026, with cash flow expected to break even by 2026 [110] Valiant Co. - Valiant's OLED material subsidiaries reported significant revenue growth, with **Gem Chemicals** at **Rmb490 million** (+35% YoY) and **Sunera** at **Rmb70 million** (+92% YoY) in H124 [14] - The **Penglai Industrial Park project** is expected to generate annual revenue of **Rmb10.6 billion** at full capacity [14] Market Dynamics - The **LiPF6** sector is projected to see a **20%** increase in demand and a **12%** increase in supply in 2025, indicating a potential recovery in prices after a trough [38] - The electrolyte industry is currently experiencing low capacity utilization at the **26th percentile** of its five-year history, suggesting a recovery in prices is likely in H225 [38] Competitive Landscape - Despite nearly a hundred participants in the fuel cell market, the **CR10** (concentration ratio) remains high at **60-80%**, indicating a few dominant players [111] - The competitive advantages for leading electrolyte producers include in-house raw material production and capabilities for overseas expansion [38] Financial Performance and Projections - **Huaheng Biotechnology** has seen a significant drop in share price, down nearly **60% YTD**, primarily due to a **37% YoY** decline in the price of its main product, valine [44] - The company expects a ramp-up in sales for new products like **PDO** and **malic acid** in 2024-25, despite recent earnings cuts [44] Future Outlook - The conference call indicates a positive outlook for the **fuel cell electric vehicle (FCEV)** market, with expected sales volume growth of **45%** in 2025, driven by favorable policies and cost parity with diesel [110] - The hydrogen market is projected to grow significantly, with expectations for **H2** to claim **10%** of China's energy consumption by 2060 [110] Conclusion - The China Chemical New Materials sector is poised for recovery and growth, with key players like Tinci and SinoHytec leading the way in their respective markets. The anticipated recovery in prices and demand, along with strategic expansions, positions these companies favorably for future performance [38][110]

shuinu9870 更多一手调研纪要和研报数据加V： 更多一手调研纪要和研报数据加V： shuinu9870 shuinu9870 更多一手调研纪要和研报数据加V： China CXO shuinu9870 be passed (see our earlier note), it is always possible that another bill targeting China CXO is proposed. • We expect the US Department of Defense (DoD) to submit a biotechnology assessment report to Congress by June 15, with some content related to China. As noted in the past, we believe such a report will include an assessment of China's biotechnology capabilities. Though we don't know when or whether ...

Summary of Integrated Oils Sector Conference Call Industry Overview - The crude oil market is facing challenges as supply growth is expected to outpace demand growth, leading to a below mid-cycle crack spread year for downstream operations [4][4] - The price forecast for Brent crude oil is set at $70 per barrel for 2025, aligning with current market strip pricing, while the 2026 base case shows a downside risk skewed towards lower prices [4][4] Key Financial Metrics - The estimated earnings per share (EPS) for Q4 are approximately 3% below market expectations, with 2025 estimates around 27% lower due to a combination of reduced crude price forecasts and lower crack spread assumptions [4][4] Company Ratings and Financial Projections - **Chevron (CVX)**: - Rating: Not Rated (NR) - 2023 Total Return of Capital Yield: 9.8% - 2025 Estimated Dividend Yield: 11.7% [11][11] - **ExxonMobil (XOM)**: - Rating: Overweight (OW) - 2023 Total Return of Capital Yield: 7.6% - 2025 Estimated Dividend Yield: 8.1% [11][11] - **Canadian Companies**: - **Crescent Point Energy (CVE)**: - Rating: Overweight (OW) - 2023 Total Return of Capital Yield: 5.2% - 2025 Estimated Dividend Yield: 6.5% [11][11] - **Suncor Energy (SU)**: - Rating: Neutral (N) - 2023 Total Return of Capital Yield: 7.3% - 2025 Estimated Dividend Yield: 5.8% [11][11] Market Positioning - Defensive positioning is recommended in the current market, favoring US companies over Canadian counterparts due to more attractive downside valuations and better free cash flow (FCF) resilience [4][4] Price and Yield Forecasts - The forecast for Brent crude oil prices includes: - Downside: $70/bbl - Base case: $80/bbl - Upside: $90/bbl [5][5] - Free Cash Flow (FCF) Yield projections for 2025 and 2026 indicate a range from 0% to 16% across various companies, with US companies generally showing stronger resilience [6][6] Additional Insights - The integrated oils sector is expected to experience a challenging environment with modest growth in both supply and demand, impacting overall profitability and investment returns [4][4] - The analysis suggests a cautious approach to investment in the sector, with a focus on companies that demonstrate strong cash flow and capital return capabilities [4][4]

shuinu9870 更多一手调研纪要和研报数据加V： 更多一手调研纪要和研报数据加V： shuinu9870 shuinu9870 19 Dec 2024 05:35:44 ET │ 10 pages Weekly Battery Updates (up to 15 Dec) 更多一手调研纪要和研报数据加V： Dec-24E NEV+ESS Battery Forecasts: We estimate full sector NEV+ESS battery production at 116.6GWh in Dec-24E (-1% MoM) and 1,082GWh in FY24E (+39% YoY); Dec/FY24E ESS domestic shipments at 20.9GWh (-0.2% MoM) and 198.2GWh (+108% YoY); Dec/FY24E domestic NEV-PV battery installation at 62.4GWh (+6% MoM) and 480.7GWh (+36% YoY), factoring Dec-24E NEV-PV re ...

Summary of Key Points from the Conference Call Industry or Company Involved - The conference call primarily discusses the economic data related to the US economy, particularly focusing on GDP growth and manufacturing indices. Core Points and Arguments 1. **GDP Growth Revision**: Q3 real GDP growth was revised up by 0.3 percentage points to 3.1% (saar), which aligns with expectations and is stronger than the consensus forecast of no change [12][26] 2. **Consumption Growth**: The pace of consumption growth was revised up by 0.2 percentage points to a robust 3.7% (saar) [12][26] 3. **Services Spending**: There was an upward revision in services spending from 2.6% (saar) to 2.8% (saar) based on the final quarterly services survey [12][26] 4. **Investment in Intellectual Property**: Investment in intellectual property products was revised higher to 3.1% (saar) from a prior estimate of 2.5% (saar) [12][26] 5. **Exports and Imports**: Exports grew by 9.6% (saar), revised from 7.5% (saar), while imports were slightly revised to 10.7% from 10.2%, leading to a smaller drag from net exports [12][26] 6. **Manufacturing Sentiment**: The Philly Fed manufacturing index declined significantly from -5.5 to -16.4 in December, indicating a contraction in manufacturing sentiment [8][32] 7. **Future Activity Expectations**: A survey indicated that 50% of firms expect a decrease in total production growth for Q4 compared to Q3, with a median expected capacity utilization rate of 70-80% [32] Other Important but Possibly Overlooked Content 1. **Profit Trends**: National after-tax profits without inventory valuation and capital consumption adjustments were revised from a flat +0.02% (saar) to a decline of 1.2% (saar), although profits are up 9.3% year-over-year [7] 2. **Core PCE Price Growth**: Core PCE price growth was revised up by 0.1 percentage points to 2.2% (saar) in Q3, returning to the initial estimate [7] 3. **Employment Metrics**: Employment metrics showed a slight decline, with the number of employees index falling from 8.6 to 6.6, indicating softer labor market conditions [32] This summary encapsulates the key findings and insights from the conference call, highlighting the economic indicators that are crucial for understanding the current state of the US economy and potential investment implications.

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Industry Overview * **Hardware Growth Acceleration**: The report forecasts hardware growth to accelerate in 2025, with a focus on enterprise vs. consumer end markets. However, the current valuation at 19 P/E for 4-7% rev/EPS growth in 2025 suggests that acceleration is already priced in. * **CIO Survey**: The 3Q24 CIO survey indicates that CIOs expect spending on PCs, servers, and storage to accelerate in 2025. This aligns with the overall optimistic outlook for hardware spending growth. * **Tech Hardware Valuation**: Tech hardware stocks are currently trading at an all-time high P/E of 19x, which is 4-6x turns above valuations at similar points in past cycles. This suggests that the market has already priced in a growth re-acceleration in 2025. * **Hardware Spending Expectations**: The report forecasts average enterprise hardware revenue growth of 3% Y/Y in 2025, with the strongest growth in AI servers and PCs. Average consumer hardware revenue growth is expected to be 3% Y/Y, ~175bps below consensus. * **Macroeconomic Factors**: The report identifies macroeconomic factors such as interest rates, inflation, and employment as headwinds to hardware spending. However, it also notes that clarity on the presidential election and a favorable interest rate environment could alleviate some of these concerns. * **Tail Risks**: The report identifies tariffs and cuts to government spending as potential tail risks to hardware spending in 2025. However, it believes that the impact of these risks is less significant than perceived. Key Companies and Their Outlooks * **Apple (AAPL)**: The report maintains an Overweight rating on Apple, considering it the Top Pick in the US IT hardware coverage universe. The company is expected to benefit from a multi-year iPhone refresh cycle and consistent double-digit Services growth. * **Dell Technologies (DELL)**: Dell remains one of the core IT hardware Overweights, well-positioned to benefit from accelerating AI server orders and a cyclical recovery in core servers, storage, and PCs. * **Seagate Technology (STX)**: Seagate is considered an Overweight due to its strong position in the HDD market and potential for revenue and gross margin expansion. * **Kornit Digital (KRNT)**: Kornit is the top small cap Overweight, leading in the digital textile printing market with strong growth and margin trajectory. * **Garmin (GRMN)**: Garmin is Underweight due to concerns about sustainability of its growth rates and negative risk-reward profile. * **Sonos (SONO)**: Sonos is Underweight until clearer evidence that the negative consumer reaction to the mid-2024 app update has passed. * **Xerox Corp (XRX)**: Xerox is Underweight due to challenges in its core business and uncertain macro environment. * **CDW Corporation (CDW)**: CDW is Equal-weight, potentially undervalued as a way to play a more robust cyclical recovery in 2025. * **Ingram Micro (INGM)**: INGM is Equal-weight, with potential for upside as a beneficiary of a more robust cyclical recovery in 2025. * **Logitech (LOGI)**: LOGI is Underweight due to concerns about execution and valuation. Conclusion The report provides a comprehensive overview of the IT hardware industry, highlighting key trends, risks, and opportunities. While the industry is expected to grow in 2025, valuation concerns and macroeconomic uncertainties remain. The report offers valuable insights for investors looking to navigate the complex landscape of the IT hardware industry.