Summary of Chinese Internet Data Centre Sector Conference Call Industry Overview - The focus is on the Chinese Internet Data Centre (IDC) sector, which is currently undervalued compared to global peers despite higher project returns and EBITDA growth [3][4] - Chinese IDC companies achieved an average return of 13% in 2023, projected to rise to 15% by 2026, driven by AI-related demand [4][11] - The sector is expected to record a 20% CAGR in EBITDA from 2024 to 2026, outpacing the global average of 11% [4][11] Key Insights - **Valuation Discrepancy**: Chinese IDC firms are trading at a 25% EV/EBITDA discount compared to global peers, despite superior growth and returns [4][11] - **Hyperscaler Demand**: There is higher order certainty from hyperscalers, with demand driven by internal AI workloads rather than indirect cloud client demand [5][11] - **Emerging Hubs**: Inner Mongolia is identified as a new IDC hub due to low power tariffs and acceptable latency, with low vacancy rates and pre-committed projects from hyperscalers [6][11] Investment Recommendations - **Top Picks**: VNET, GDS, and Aofei are highlighted as top investment picks due to their potential for new order wins and upcoming REIT launches [3][7] - **Price Targets**: Price targets for VNET raised to $25.00 (92% upside), GDS to $66.00 (53% upside), and Aofei to Rmb28.10 (41% upside) [8][29][30][31] Financial Metrics - **VNET**: Expected EBITDA growth of 18% in 2025 and 26% in 2026, with a price target based on 18x 2026E EV/EBITDA [29] - **GDS**: Anticipated EBITDA growth of 12% in 2025 and 14% in 2026, with a price target based on 17x 2026E EV/EBITDA [30] - **Aofei**: Projected to achieve a 20%+ EBITDA CAGR from 2024-2026, with a price target of 25x 2026E EV/EBITDA [31] Market Dynamics - **AI Demand**: The launch of DeepSeek is expected to increase demand for AI training and inference, leading to a more diversified customer portfolio for IDC operators [38][41] - **Utilization Rates**: The industry utilization rate is projected to improve, with third-party IDC revenue growth expected to reaccelerate to 10-20% in 2025/26E [45][62] Risks and Considerations - **Leverage Risks**: The potential launch of REITs in 2025 may help diversify funding options and mitigate excessive leverage risks due to growth ambitions [6][11] - **Market Competition**: The IDC sector is experiencing increased competition, particularly from hyperscalers' in-house capacity, which could impact pricing and margins [41][45] Conclusion - The Chinese IDC sector presents a distinct opportunity for re-evaluation, with strong growth prospects driven by AI demand and favorable market dynamics. The current undervaluation compared to global peers suggests potential for significant upside in selected stocks.

Globalizer | The Globalizer A "Made in China 2025" Rally? You're reading the Globalizer, offering a recap of Citi's leading research and highlighting key topics. This week, we explain why we expect a "Made in China 2025" rally. We explore our golden rules for investing in European telecoms. Plus more insights from the week at Citi. Bearing Fruits from "Made in China in 2025" Macro-to-Micro The HSII has surged 37% from its January trough, spurred by AI and DeepSeek catalysts as well as Xi's meeting with tech ...

Summary of J.P. Morgan's Global Commodities Research Call Industry Overview - **Industry**: Oil Markets - **Date**: February 20, 2025 Key Points and Arguments U.S.-Iran Relations and Oil Production - The U.S. and Iran have a long history of escalating tensions, particularly since the Islamic Revolution, impacting oil prices and the U.S. economy [2][3] - The Biden administration initially relaxed sanctions on Iran due to high energy prices but faced criticism from Trump, who advocated for a return to strict sanctions [9][12] - Iranian crude oil exports increased from 400 thousand barrels per day (kbd) in 2020 to over 1.6 million barrels per day (mbd) in 2024 [9] - Forecasts suggest Iranian crude production will remain flat at 3.1 mbd in 2025, unchanged from 2024 levels [8] JCPOA and Future Negotiations - The Joint Comprehensive Plan of Action (JCPOA) is set to expire in October 2025, raising questions about future agreements [8][11] - Both the U.S. and Iran have signaled a willingness to negotiate, with potential for a new nuclear agreement [11][15] - Trump's administration may disrupt up to 1 mbd of Iranian oil flows through sanctions targeting Chinese terminals and state-owned enterprises [9] Economic Conditions in Iran - Iran is facing severe economic challenges, including high inflation rates between 30-55% annually and significant currency depreciation [12] - The Iranian government, under President Masoud Pezeshkian, is seeking to stabilize the economy and re-engage with the West for sanctions relief [15] Geopolitical Shifts in the Gulf - Saudi Arabia and the UAE have shifted their approach to Iran, engaging diplomatically amid doubts about U.S. security commitments [26][28] - The rapprochement between Saudi Arabia and Iran, brokered by China, is significant for regional stability and economic transformation [28][29] Inflation and Economic Impact - U.S. inflation has rebounded, complicating the economic landscape for the Trump administration, which may affect oil prices and sanctions strategy [30][32] - The cost of living crisis could exacerbate inflation through higher oil prices, impacting Trump's priorities [32] Oil Supply and Demand Forecasts - Global oil demand is projected to increase, with total oil demand expected to reach 104.0 mbd in 2025 [41] - Total oil supply is forecasted to be 105.3 mbd in 2025, indicating a potential oversupply situation [41] Price Forecasts - J.P. Morgan forecasts Brent crude prices to average $73 per barrel in 2025, with WTI prices averaging $69 per barrel [47] Additional Important Content - The geopolitical landscape is changing, with the potential for new alliances and shifts in oil supply dynamics as countries in the Gulf pursue economic diversification [27][29] - The impact of sanctions and negotiations on oil exports will be closely monitored, as the situation evolves with the upcoming U.S. elections and international diplomatic efforts [22][24]

February 20, 2025 12:37 PM GMT WeiChai Power | Asia Pacific Data NOW: Weichai's Share Price vs. LNG HDT Sales in Jan- 25 China's LNG heavy-duty truck (HDT) sales were up 21% y-y (-20% m-m) to 7.7k units in Jan-25, with penetration expanding 7ppt y-y to 16% (vs. 9% in Jan-24). This was attributed to a widening LNG/diesel price gap (Rmb3,148/t in Jan-25 vs. Rmb2,520/t in Jan-24 and Rmb3,009/t in 2024, according to CEIC data). Exhibit 1: LNG HDT Sales vs. Weichai H-share Price Performance -5,000 0 5,000 10,000 ...

19 February 2025 | 5:13PM EST USA: FOMC Minutes Reiterate "Careful" Approach Amid High Uncertainty, Raise Possibility of Slowing Runoff; We Now Expect BOTTOM LINE: The minutes to the FOMC's January meeting noted that the "majority" of participants favored taking a "careful approach" to "additional adjustments to the stance of monetary policy," in light of elevated uncertainty around the economic outlook, the neutral interest rate, and the economic effects of potential government policy changes. The minutes ...

Global Research ab 20 February 2025 First Read EHang Holdings Takeaways from management call We hosted a conference call with EHang Key takeaways: 1) as Two Sessions near, EHang sees continued government support, including project funds of low-altitude economy as well as efforts to build out infrastructure and to clear policy hurdles; 2) EHang estimates the 1st operating certificate would be released soon; 3) EHang plans to launch facelift of EH216 and VT-35 (updated version of VT-30) in the coming months; ...

February 20, 2025 04:20 PM GMT NetEase, Inc | Asia Pacific Overseas expansion and overall recovery on track We think Netease's overseas expansion and overall growth recovery are well on track. The market seems to have overreacted to the top-line miss despite the healthy game grossing and profit beat. We stay OW and highlight the FragPunk release on March 6 as the next catalyst. Overseas expansion in focus: Management spoke highly of Marvel Rivals' performance and targets to run this game as a 10-year evergr ...

China Financials | Asia Pacific Tracking industrial risks – some progress on capex rationalization in 2H24 Key Takeaways We believe a continued slowdown in industrial capex will be needed to ease industrial profit pressure and credit risks. While many industrial sectors still felt pressures in 2024, we believe the policy shift from pushing to containing capex expansion and abating loan window guidance since mid-2024 is bearing some fruit, with progress on rationalization of industrial credit and investment ...

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 ab 17 February 2025 Global Research Luxshare Precision Industry Connecting the new dots: diversification to non- Apple market Shifting gears to new emerging tangible markets We assume coverage of Luxshare with a Buy rating and Rmb58.00 price target. Luxshare's past growth was heavily associated with Apple and its valuation was often penalised as Apple's hardware sales growth slowed. While Apple will remain core to Luxshare's consumer electronics business for the foreseeable futu ...

China MCU market declined less in 2024: According to WSTS data, China MCU market was down 14% in revenue terms in 2024, while global MCU market was down 19%. This is because China MCU market began to correct earlier, in mid-2022 vs. the global peak in Mar-23. Our US analyst, Joseph Moore, recently upgraded NXP to OW, calling the MCU bottom. We think the China market is first in and first out, and we turned positive on China MCU report in Nov-24 (link). 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 February 17, 2025 08:00 PM ...