Figure 27: Phoenix Diesel – ANS $/bbl 10 30 50 70 90 110 130 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5-yr range 2022 2023 2024 50 70 90 10 30 110 130 Source: Bloomberg Finance L.P. Figure 28: Salt Lake City Diesel – WTI Cushing $/bbl - 20 40 60 80 100 120 140 - 20 40 60 80 100 120 140 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 5-yr range 2022 2023 2024 Source: Bloomberg Finance L.P. Source: Bloomberg Finance L.P. 15 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 Figure 29: US Denver – WTI Cushing 3:2:1 Crack Spr ...

China Economic Comment China Weekly: Softer Exports and New Credit, CEWC Takeaways CEWC takeaways: bigger deficit, more rate cuts, greater support China concluded the much-awaited annual Central Economic Work Conference (CEWC) on December 12th, outlining the government's main economic objectives and policy plans for 2025, which are largely in line with our CEWC preview and Politburo meeting. As usual, key growth and policy targets were not announced at CEWC but will Economics Figure 1: Net weekly issuance o ...

Key Takeaways Industry/Company - **Industry**: China Economics, Asia Pacific - **Company**: Not specified, focus on broader economic and policy analysis Core Points and Arguments - **Beijing Forward Guidance**: Beijing provided forward guidance for the fiscal package to be announced in March NPC, marking the first time in over a decade. This was a positive step, although the package is expected to remain modest with a slightly improved mix. - **Consumption Support**: Significant increase in special long-term CGBs for consumer goods trade-in program. The program is expected to double in size next year, covering more non-durable goods. - **Housing Market**: Use of LGSB to support housing inventory digestion and giving local government more autonomy in setting criteria for housing buyback. The size of the housing buyback program could be similar to this year's (~Rmb300bn), but easing the criteria may help accelerate implementation. - **Local Government Fiscal Constraints**: Efforts to promote central-local fiscal reforms and settling payables to corporates. Beijing is expected to adopt more central government leveraging to support the economy and use local debt swaps to mitigate the risk of a deflationary downward spiral. - **Consumption Tax Reform**: A pilot program on consumption tax reform (e.g., high-end watches, jewelry) is possible, but broad-based implementation is unlikely given the deflationary economy. Other Important Content - **Market Reaction**: The market reacted disappointedly to the vague CEWC statement last week, leading to the need for forward guidance. - **Fiscal Package**: The fiscal package is expected to be modest with a slightly improved mix, focusing on consumption support, housing market, and local government fiscal constraints. - **Economic Outlook**: The forward guidance indicates a cautious approach to economic policy, with a focus on addressing specific challenges in the economy.

Summary of the Conference Call on China Property Market Industry Overview - The report focuses on the **China Property** market, specifically analyzing trends in unit sales across different tiers of cities in the Asia Pacific region [3][85]. Key Points Unit Sales Performance - **Weekly Secondary Unit Sales**: - Increased by **70% YoY** but decreased by **14.9% WoW** for the week ending December 15, 2024 [1][96]. - **Tier 1 cities** saw a **126% YoY** increase but a **1.9% WoW** decrease [1]. - **Tier 2 cities** experienced a **43% YoY** increase but a **23% WoW** decrease [1]. - **Shenzhen** had the strongest performance among Tier 1 cities with a **185% YoY** increase [1]. - **Weekly Primary Unit Sales**: - Increased by **28% YoY** and **9.8% WoW** [89]. Sell-Through Rates - The total sell-through rate was **61%**, unchanged from the previous week [96][97]. - In **Tier 1 cities**, the sell-through rate was **56%**, up from **50%** in the prior week [97]. - In **Tier 2 cities**, the sell-through rate dropped to **65%** from **75%** [97]. - **Chengdu** recorded the highest sell-through rate at **89%** [97]. Price Index - The **Centaline six-city secondary asking price tracking index** was **26.1%**, up from **25.3%** the previous week, with Chengdu having the highest index at **44.2%** [90]. Market Trends - The report indicates a mixed performance across different tiers of cities, with Tier 1 cities showing stronger resilience compared to Tier 2 cities [1][89]. - The overall market sentiment appears cautious, with fluctuations in both sales and pricing trends [89][90]. Additional Insights - The data reflects ongoing challenges in the property market, particularly in Tier 2 cities, which may indicate potential risks for investors [1][89]. - The strong performance in Shenzhen could present a unique investment opportunity within the Tier 1 city segment [1]. This summary encapsulates the key findings and trends from the conference call regarding the China Property market, highlighting both opportunities and risks for potential investors.

Summary of the China Basic Materials Monitor (December 2024) Industry Overview - The report focuses on the **China Basic Materials** industry, highlighting a divided demand picture as of December 2024, with varying trends across different sectors. Key Points and Arguments 1. **Demand Trends**: Downstream producer feedback indicates a continuation of trends observed in November, with robust growth in sectors such as **EV/auto**, **appliances**, and **consumer electronics** due to policy stimulation. However, there is a noted softening in demand for construction materials and seasonal products [1][1][1]. 2. **Inventory Levels**: Current demand for cement and construction steel is reported to be **10-18% lower year-over-year (YoY)**, while demand for copper is **4-9% higher** and lithium is **1.3 times higher**. Inventory levels for aluminum are above normal, while alumina and copper inventories are below normal [1][1][1]. 3. **Market Conditions**: The year-end construction market remains depressed, with a lack of new infrastructure projects leading to declining shipments in cement and weak construction sections in aluminum. The report notes that margins and pricing for aluminum, steel, and lithium have softened, while copper prices have slightly improved [1][1][1]. 4. **Order Book Trends**: The forward order book trend has softened, with **33%** of respondents reporting month-over-month (MoM) improvement in December for downstream sectors and basic materials [1][1][1]. 5. **Sector-Specific Insights**: - **Cement**: The absence of new project starts has led to deeper supply cuts [1][1][1]. - **Aluminum/Alumina**: Weaker demand coupled with surging alumina prices has resulted in lower margins [1][1][1]. - **Copper**: Strong demand is leading to a drawdown in inventory levels [1][1][1]. - **Lithium**: The market is likely to remain in deficit in the near term [1][1][1]. 6. **Feedback from Producers**: The proprietary survey indicates that **80%** of respondents are seeing above-normal inventory levels for steel and aluminum, while **100%** of respondents report below-normal inventory levels for alumina [1][1][1]. Additional Important Content - The report includes a detailed analysis of the **MoM order book trends** across various sectors, indicating a mixed outlook for the basic materials market [1][1][1]. - The **China PMI** data is referenced, providing context for the overall economic environment affecting the basic materials sector [1][1][1]. This summary encapsulates the critical insights from the December 2024 China Basic Materials Monitor, reflecting the current state and outlook of the industry.

Summary of Key Points from the Conference Call Company and Industry Overview - **Company**: BeiGene (Ticker: BGNE) - **Industry**: Biotechnology, specifically focusing on oncology and hematologic malignancies Core Insights and Arguments - **Brukinsa's Market Position**: Brukinsa, a second-generation BTK inhibitor, has shown significant growth, contributing $690 million or 69% of net product revenue in Q324. The drug is positioned for various B-cell malignancies, including CLL and WM, with a strong safety and efficacy profile compared to competitors like Imbruvica and Calquence [37][38][39] - **Market Growth Projections**: The BTK inhibitor market is expected to grow from approximately $11 billion in 2024 to around $16 billion by 2028, with Brukinsa anticipated to capture a significant share due to its superior safety and efficacy [38][46] - **Regulatory Catalysts**: Key upcoming regulatory catalysts for Brukinsa include the 114 tablet formulation aimed at improving patient adherence and reducing pill burden, as well as ongoing Phase 3 trials for combination therapies [40][41][52] - **Pipeline Developments**: BeiGene's pipeline includes Sonrotoclax, a BCL2 inhibitor, and BGB-16673, a BTK protein degrader, both expected to enter Phase 3 trials in 1H25. These assets could potentially generate significant revenue, with projections of ~$2.5 billion by 2030 [41][42] Additional Important Information - **Valuation Metrics**: BeiGene currently trades at approximately 5.7x 2024E Price/Sales, which is considered undervalued compared to the long-term averages of 4.6x for US Pharmaceuticals and ~6.7x for US Biotechnology. This suggests potential for price appreciation if growth continues [43] - **Market Share Trends**: Brukinsa's market share in the US has grown by ~6% to 14% in 2024 YTD, indicating a positive trend against competitors [54] - **Future Expectations**: 2025 is viewed as a pivotal year for BeiGene, with expectations of revenue growth driving consensus estimates higher and breaking out of historical trading ranges [61][62] This summary encapsulates the critical insights from the conference call, highlighting BeiGene's strategic positioning, market dynamics, and future growth potential in the biotechnology sector.

Summary of Key Points from the Conference Call Industry or Company Involved - The discussion primarily revolves around the **Chinese economy**, focusing on fiscal policies, social welfare, and consumption dynamics. Core Points and Arguments 1. **Policy Changes and Economic Measures** - The Central Financial and Economic Affair Office indicated that new policy wordings are significant, with concrete measures expected to be disclosed at the March NPC [1] 2. **Investment and Consumption Dynamics** - There is a noted investment slowdown, but it is insufficient for reflation, highlighting the importance of final demand in economic recovery [3] 3. **Residential Market Analysis** - Data shows a disparity in residential inventory and sales across different city tiers, with lower-tier cities facing more pressure due to elevated inventory levels [8][25] 4. **Social Welfare Spending** - The M Foundation reported an expansion of the consumption subsidy program to RMB 300 billion, indicating a focus on increasing social welfare spending [17] 5. **Monetary Policy Outlook** - A resolute monetary easing tone was noted, with a 40 basis points policy rate cut expected until the end of 2025, alongside ample liquidity measures [17] 6. **Housing Market Concerns** - There are lingering moral hazard concerns regarding housing investments, which are projected to contract by approximately 9% in 2025 [17] 7. **Regulatory Environment** - A more accommodative regulatory environment is anticipated, with inter-ministerial coordination and consistency in economic policies [17] 8. **Fiscal Expansion Expectations** - Modest fiscal expansion is expected, contributing around 1.4 percentage points to GDP in 2025, driven by evolving social dynamics [18] 9. **Social Safety Net Issues** - Insufficient social safety nets for rural residents and migrant workers were highlighted, indicating a need for reform [27] 10. **Birth Rate Concerns** - Financial pressures are contributing to a decline in new births, with various factors such as education costs and housing prices affecting family planning decisions [32][52] Other Important but Possibly Overlooked Content 1. **Urban Village Redevelopment** - A cash resettlement program for urban village redevelopment was mentioned as a positive step, with an assumption of completion within one year [25] 2. **Childbirth Subsidies** - The need for birth subsidies was discussed as a potential pathway toward reflation, addressing demographic challenges [68] 3. **RMB Depreciation Strategy** - A modest RMB depreciation is anticipated to offset tariff impacts, with projections for USDCNY to reach 7.60 by the end of 2025 [71] 4. **Long-term Economic Projections** - The report outlines various scenarios for China's GDP deflator under different policy paths, indicating a cautious approach to economic recovery [21] 5. **Social Security Contributions** - The structure of social security contributions was detailed, emphasizing the burden of aging populations on the system [29] This summary encapsulates the key insights and projections discussed in the conference call, providing a comprehensive overview of the current economic landscape and anticipated policy directions in China.

Summary of Key Points from the Conference Call Industry or Company Involved - The conference call pertains to the foreign exchange (FX) market, specifically focusing on USD positioning and related currency strategies as analyzed by Morgan Stanley Research. Core Insights and Arguments - **USD Positioning**: Speculative USD (DXY) futures positioning increased to 27.5% of open interest in the week ending December 10, up from 24.1% the previous week [11] - **Market Sentiment**: In the week ending December 12, USD experienced the largest improvement in the Daily Sentiment Index, while sentiment on JPY, CAD, and CHF deteriorated the most among G10 currencies [11] - **Options and Futures Market Activity**: Investors added long USD positions and reduced short NOK positions against EUR, while increasing short positions in JPY and GBP. In the futures market, short positions in CHF and CAD were reduced, while short positions in USD and AUD were added [42][45] - **Tactical Investor Behavior**: Options data indicate that tactical investors are predominantly long on USD (DXY) and most short on AUD and GBP, with futures positioning showing long EUR and short CAD and NZD [45] Other Important but Possibly Overlooked Content - **Data Sources and Methodology**: The analysis is based on options and futures data from DTCC, Bloomberg, and Macrobond, with specific methodologies outlined for assessing FX positioning [20][44] - **Market Trends**: The report highlights a shift in investor behavior, indicating a strategic pivot towards USD amidst changing market conditions, which could signal potential investment opportunities or risks in the FX market [42][45] - **Analyst Insights**: The report includes insights from multiple strategists at Morgan Stanley, emphasizing the collaborative nature of the analysis and the importance of diverse perspectives in understanding market dynamics [42] This summary encapsulates the critical points discussed in the conference call, focusing on USD positioning and market sentiment within the FX landscape.

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **APAC shipping industry**, particularly the performance and outlook of major shipping companies including **Evergreen Marine (EMC)** and **COSCO Shipping Holdings (CSH)** [1][3][4]. Core Insights and Arguments - **Demand Outlook**: Demand for shipping is expected to remain strong into **March 2025**, with a projected **4-5% growth** in container demand. This is supported by discussions with major shipping companies indicating limited signs of demand fade [3][10]. - **Earnings Forecasts**: The **2025E core earnings** for APAC liners have been increased by an average of **6 times**, with revised earnings approximately **39% below** market expectations, indicating a **core ROE** of **8-12%** [4][28]. - **Upgrades and Downgrades**: - **Evergreen Marine (EMC)** and **COSCO Shipping Holdings (CSH)** have been upgraded to **Buy** from **Sell**, with target prices revised to **NT$282** and **HK$13.3** respectively [4][28]. - **Yang Ming Marine (YM)** has been downgraded to **Sell** from **Neutral** due to limited vessel orders and a challenging market position [4][29]. Financial Metrics - **Target Prices**: - EMC's target price is based on **1.1x 2025E PBV** with a **12% core ROE**. - CSH's target price is based on **0.85x 2025E PBV** with an **8.5% core ROE** [9]. - **Market Capitalization**: - CSH has a market cap of **HK$194.72 billion** and EMC has a market cap of **NT$495.497 billion** [4]. Risks and Considerations - **Tariff Implications**: Anticipation of **Trump's second-term tariffs** starting as early as **June 2025** could impact shipping dynamics, with potential inventory building by US retailers due to expected tariff increases [3][30][38]. - **Supply Chain Adjustments**: The first term of Trump's tariffs led to supply chain alterations rather than a decline in US container imports, with significant market share gains for countries like **Mexico**, **Vietnam**, and **Taiwan** at the expense of **China** [11][17]. - **Potential Strikes**: The **International Longshoremen's Association (ILA)** strike negotiations beyond **January 15, 2025** could pose an upside risk, potentially disrupting supply and increasing rates [43][64]. Additional Insights - **Supply Dynamics**: The effective supply growth is projected to be lower than scheduled due to delays in new vessel deliveries, with a forecast of **5%** effective supply growth in **2026** [21][24]. - **Global Inflation Impact**: Easing global inflation may allow central banks to cut rates, historically supportive of container demand [19]. - **Scrapping Rates**: Scrapping of vessels has been less than **1%** of the fleet, indicating a profitable environment for shipping lines [46]. Conclusion - The APAC shipping industry is poised for a positive outlook with strong demand and revised earnings forecasts. However, potential risks from tariffs, supply chain disruptions, and labor negotiations could impact future performance. The strategic upgrades of key players like EMC and CSH reflect confidence in their ability to navigate these challenges effectively.

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **datacenter market** and **global server shipments** in the **hardware technology** sector, particularly focusing on the **Asia Pacific** region [13][14]. Core Insights and Arguments - **Global Server Shipments**: In 3Q24, global server shipments totaled **3.7 million units**, reflecting a **1% quarter-over-quarter (q/q)** increase and a **19% year-over-year (y/y)** increase [13]. - **AI Server Demand**: AI server shipments continued to ramp up, with Super Micro reporting an **8% q/q** increase in shipments, attributed to improved GPU supply [13]. The average selling price (ASP) for AI servers fell by **1% q/q** to **US$19.5k** due to lower H100 pricing [13]. - **General Compute Server Demand**: General compute server demand is expected to remain stable, with ODMs anticipating **mid-single-digit (MSD) y/y growth** for cloud customers in CY25 [14]. - **High-End Server Performance**: High-end server shipments grew **180% y/y** and **25% q/q**, while mid-range servers increased **113% y/y** and **41% q/q** [38]. Entry-level servers saw a **12% y/y** increase but a **3% q/q** decline [38]. - **Market Share Dynamics**: ODMs regained market share in the general and AI server markets from OEMs, with ODM direct market share increasing to **36.4%** in 3Q24, up **40 basis points (bps)** q/q [35]. Regional Performance - **Regional Growth**: The USA outperformed other regions with a **25% y/y** growth in shipments, followed by Asia Pacific excluding Japan (APxJ) at **18% y/y**, and the rest of the world (ROW) at **13% y/y** [17]. Stock Implications - **Preferred Stocks**: The report favors downstream ODMs such as **Hon Hai (2317.TW)**, **FII (601138.SS)**, **Wiwynn (6669.TW)**, and **Quanta (2382.TW)** for potential investment opportunities [15]. Additional Insights - **ASP Trends**: The ASP for ODM direct servers increased by **38% q/q** to approximately **US$21.6k**, likely due to a higher contribution from AI servers [39]. - **Future Expectations**: The GB200 server racks are expected to ramp up significantly from **mid-February 2025**, with projections of **500 racks in 4Q24**, **~2,000 racks in 1Q25**, and **5,000-10,000 racks in 2Q25** [36]. Conclusion - The datacenter market is experiencing robust growth driven by AI and general compute server demand, with significant opportunities for investment in key ODMs as they regain market share and adapt to evolving technology needs.