North America Equity Research 19 November 2024 J P M O R G A N This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. Cryptocurrency Markets Nov 18 Spot ETP Flows: BTC ETPs Rebound Back to Net Sales as ETH ETPs Remain Negative Yesterday; IBIT Options to Launch Immi ...

Summary of Jefferies Equity Research Call on Clean Technology Industry Overview - The focus of the call was on the **European wind sector**, particularly the potential entry of **Chinese wind Original Equipment Manufacturers (OEMs)** into the market [2][5]. Key Points and Arguments Market Context and Challenges - The European wind sector has been historically dominated by **Western suppliers**, creating significant challenges for Chinese turbine manufacturers [2][2]. - Chinese suppliers have struggled to penetrate the market due to **banks' reluctance** to finance projects involving Chinese turbines, leading to a dilemma for developers between cheaper Chinese options and more expensive European alternatives with easier financing [2][2]. - This trend is particularly pronounced in **offshore wind**, where project finance and non-recourse debt are crucial for maximizing returns [2][2]. Evolving Perspectives on Chinese Turbines - There is a **shift in perception** regarding Chinese turbines in Europe, with a gradual change expected mainly in offshore wind [2][2]. - Factors contributing to this shift include **bottlenecks** faced by Western suppliers due to increased demand for GW-scale wind farms, resulting in longer lead times for turbine delivery (at least 5 years) [2][2]. - Developers are increasingly considering Chinese turbines as viable options, especially in the **floating offshore wind sector**, where Western suppliers have been hesitant to invest [2][2]. Adaptation of Chinese Suppliers - Chinese turbine manufacturers are evolving beyond competing solely on price and are becoming more educated about the **European market's requirements** [2][2]. - Many Chinese suppliers are exploring **partnerships for local manufacturing** in Europe to alleviate concerns regarding technology safety and supply chain reliability [2][2]. - This shift has led to discussions about presenting Chinese turbines as serious contenders in the market, particularly as Western suppliers focus on established projects [2][2]. Banking and Financing Dynamics - The banking landscape is beginning to adapt to the possibility of financing projects with Chinese turbines [2][2]. - While many banks remain cautious, about **5 out of 10 banks** are open to exploring financing options on a case-by-case basis, provided there are adequate risk mitigation measures [2][2]. - Banks are particularly concerned about the **supply chain** and availability of spare parts for Chinese turbines over the long term [2][2]. - There is a gradual acceptance of Chinese technology, although political and market dynamics will continue to influence the pace of this shift [2][2]. Other Important Considerations - Developers are now more inclined to consider Chinese turbines, especially in offshore wind projects, as they seek to balance cost and financing considerations in an evolving energy landscape [2][2].

19 Nov 2024 01:07:39 ET │ 11 pages Asia FX and Rates Strategy China: Foreign holdings of China bonds reduced further in Oct'24 Foreign flow in fixed income — Foreign holdings of China bonds decreased by US$20bn in Oct'24, mostly driven by CGBs and NCDs. Foreign investors net bought US$1.4bn on the market, but it was not enough to offset US$21.4bn maturity. Overall portfolio flows — Net remittance turned into outflow of US$25.8bn and conversions led to net FX buying of US$3.1bn. This suggests net outflow of ...

Summary of Key Points from the Conference Call Industry Overview - The conference call focused on the **China Battery and Components** industry, particularly in the context of electric vehicles (EVs) and battery supply and demand dynamics in the Asia Pacific region [1][3]. Core Insights and Arguments - **Global EV Sales Trends**: - Global electric vehicle (EV) sales are projected to reach **2,000K units** in 2024, with a significant increase from **1,200K units** in 2023 [4]. - China’s EV sales are expected to grow from **1,500K units** in 2021 to **800K units** in 2024, indicating a robust market demand [4]. - **Battery Supply and Demand**: - The effective battery capacity in China is forecasted to increase from **1,442 GWh** in 2023 to **3,286 GWh** by 2030, reflecting a strong growth trajectory in battery production capabilities [6]. - The demand for electric car batteries is projected to rise from **353 GWh** in 2021 to **2,739 GWh** by 2030, indicating a compound annual growth rate (CAGR) of approximately **20%** [10]. - **Market Share Dynamics**: - CATL is expected to maintain a dominant market share in the battery sector, with projections showing its sales volume increasing from **116 GWh** in 2021 to **1,056 GWh** by 2030 [14]. - BYD's market share is also anticipated to grow, with sales projected to reach **274 GWh** by 2030 [14]. Additional Important Insights - **Battery Technology Trends**: - The proportion of lithium iron phosphate (LFP) batteries in total battery installations is expected to be around **60%**, indicating a shift towards more cost-effective battery technologies [21]. - The breakdown of battery installations by vehicle type shows a significant focus on electric passenger vehicles (ePV), which are projected to dominate the market [21]. - **Regional Market Insights**: - The conference highlighted the competitive landscape in various regions, with specific emphasis on the market shares of key players like LGES, CALB, and others in the global EV battery market [27][30]. - **Future Projections**: - The overall battery supply is expected to reach **2,670 GWh** by 2030, with a utilization rate projected to improve as demand increases [14][16]. This summary encapsulates the critical insights from the conference call, providing a comprehensive overview of the current state and future outlook of the China Battery and Components industry.

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Industry and Company Overview * **Industry**: The report focuses on the US equity market and provides outlook and investment recommendations for 2025. * **Key Companies**: The report highlights the "Magnificent 7" stocks (AMZN, AAPL, GOOGL, META, MSFT, NVDA, and TSLA) as significant contributors to the S&P 500 index's performance. * **M&A Candidates**: The report identifies a basket of 62 potential US M&A candidates with a meaningful probability of being acquired. * **SMB-Exposed Stocks**: The report recommends a basket of 60 stocks with revenue exposure to US small- and medium-sized businesses. * **AI Phase 3 Stocks**: The report identifies 30 stocks in "Phase 3" of the AI evolution with the potential to monetize AI by generating incremental revenues. Core Views and Evidence * **S&P 500 Index**: Goldman Sachs forecasts the S&P 500 index to rise to 6500 by year-end 2025, reflecting an 11% price gain and 12% total return with dividends. * **Earnings Growth**: The report expects earnings growth of 11% in 2025 and 7% in 2026. * **P/E Multiple**: The report projects a forward P/E multiple of 21.5x at the end of next year, a 1% compression from the current P/E of 21.7x. * **Magnificent 7**: The report expects the "Magnificent 7" stocks to outperform the S&P 500 index by approximately 7 pp in 2025, the slimmest margin in seven years. * **M&A Activity**: The report forecasts a 25% year/year increase in the number of completed mergers in 2025. * **SMB-Exposed Stocks**: The report expects an improving small business operating environment to lift the earnings and valuation of SMB-exposed stocks. * **AI Phase 3 Stocks**: The report expects investor interest to transition from AI infrastructure to broader AI "Phase 3" application rollout and monetization. Investment Recommendations 1. **Think Big**: Invest in the "Magnificent 7" stocks and seek opportunities in mid-cap equities. 2. **Maximize Your Options**: Invest in a basket of potential US M&A candidates. 3. **Low Rent, High Stakes**: Invest in a basket of stocks with revenue exposure to US small- and medium-sized businesses. 4. **Deliver the Goods**: Invest in stocks in "Phase 3" of the AI evolution with the potential to monetize AI. 5. **Protect the Downside and the Upside will take care of itself**: Overweight positions in Materials, Software & Services, and Utilities. Additional Key Points * The report emphasizes the importance of considering a diversified portfolio and taking advantage of periods of low volatility. * The report acknowledges the potential risks associated with high valuations and event risk. * The report provides a detailed analysis of the economic and earnings outlook for the US equity market.

Jefferies UK | Investment Companies Equity Research November 19, 2024 | --- | --- | --- | |-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

Xiaomi (1810) Overweight 1810.HK, 1810 HK EV momentum stronger; Core earnings resilient, with some uptick in hardware GMs; raise PT to HK$34 Xiaomi's 3Q earnings momentum continues to remain strong, with core revenues growing 17% YoY, and EV losses also narrowing. Key highlights were: (1) EV targets for 2024 raised to 130k units, on stronger execution and continued demand, (2) IoT GMs continue to see upside, helping to drive segment GM above 20% for the first time, and (3) Continued strong growth in premium ...

19 November 2024 | 7:23PM CST XPeng Inc. (XPEV): 3Q24 First Take: in-line results with strong 4Q24 guidance; Buy XPeng reported 3Q24 results with revenue in-line with GSe/Visible Alpha Consensus, gross profit +3%/+9% vs. GSe/Consensus, and gross margin improving by 17.9pp yoy/1.3pp qoq to 15.3%. We believe the gross margin improvement is mainly driven by higher volume scale which brought down fixed cost on a per vehicle basis, and further technology services revenue recognition from VW. EBIT was -2% vs. GSe ...

Company and Industry Overview * **Company**: STMicroelectronics N.V. (NYSE:STM) * **Industry**: Semiconductor * **Focus**: Analog and sensors, power electronics, general-purpose microcontrollers Key Messages and Assumptions * **Revenue Target**: $18 billion with an EBIT margin of 22%-24% by 2027-2028. * **Growth Drivers**: * Analog and sensors in high-premium Personal Electronics * Power electronics, particularly power MOSFETs, diodes, and silicon carbide * General-purpose microcontrollers post-2024 and 2025 * **Success Factors**: * Reshaping manufacturing footprint and infrastructure * Cost base resizing to leverage growth and productivity improvement * Execution of the plan Transition Year and Visibility * **2025**: Transition year with low visibility in industrial markets * Bear scenario: Market flattish * Bull scenario: Acceleration in Q2 and H2 * **2026-2027**: Acceleration phase * Megatrends: Electrification of mobility, decarbonization of industry, AI * Additional revenue from connectivity, edge AI, and power: $1.5 billion - $1.7 billion Cost Restructuring * **Reorganization**: Splitting organization into two groups with similar technology and product development * **Manufacturing Transformation**: Transition to 300-millimeter and 200-millimeter fabs * **Headcount Reduction**: Attrition through early retirement and layoffs Industrial Market and Margins * **Visibility**: Short-term, with bear and bull scenarios * **Margin Impact**: Capacity reservation fees declining, unloading charges reducing, and efficiency improving China Strategy * **China-for-China**: Local production to compete with local players * **Partnerships**: Joint ventures with Sanan and [indiscernible] for critical technologies Automotive Market * **China**: Hybrid and extended-range vehicles growing, with ST leading in SiC market share * **Global**: Focus on SiC and power electronics for all vehicle types AI Opportunities * **Edge AI**: $600 million by 2030 * **Silicon Photonics**: $500 million by end of the decade * **AI Server**: 10% market share by end of the decade Sustainable Margin Structure * **2027-2028**: Gross margin of 44%-46% and operating margin of 22%-24% * **Long-term**: Potential for 50% gross margin and 30% operating margin Organic Growth and Acquisitions * **Organic Growth**: Strong belief in organic growth potential * **Acquisitions**: Open to larger-scale accretive acquisitions in automotive or industrial markets