10 February 2025 Global Energy Storage Global Energy Storage: Energy storage demand continues to surge on renewables and data centers Neil Beveridge, Ph.D. +852 2918 5741 neil.beveridge@bernsteinsg.com Brian Ho, CFA +852 2918 5772 brian.ho@bernsteinsg.com Hengliang Zhang +852 2918 7871 hengliang.zhang@bernsteinsg.com ESS battery demand increased by 74% y-o-y to 321GWh in 2024. We expect it will grow by 31% to 420GWh in 2025, but we also think this could be conservative given the project pipeline. With more ...

Summary of the Conference Call on China Power Semiconductor and Silicon Carbide Sectors Industry Overview - The report focuses on the **China Power Semiconductor and Silicon Carbide (SiC) sectors** and provides an updated outlook for 2025, including demand dynamics and earnings estimates for key companies in the sector [2][6]. Key Companies Discussed - **SICC (SiC substrate)**: Downgraded from Overweight (OW) to Neutral - **StarPower**: Neutral rating maintained - **United Nova**: Neutral rating maintained - **NCE Power**: Neutral rating maintained - **CR Micro**: Neutral rating maintained [2][4]. Core Insights and Arguments 1. **Demand Outlook**: - Mixed demand outlook for Chinese power semiconductor companies in 2025: - Continued strength in **China's EV growth** with expected NEV shipments growth of **24% in 2025** and **36% in 2024** [6]. - Limited growth in **industrial and renewables demand** despite a sluggish 2024 [6]. - Mild growth in **consumer demand** following strong growth in 2024 [6]. 2. **Power Semiconductors**: - Companies will remain flexible in product pricing to drive shipment growth, especially in the auto market, due to: - Abundant industry capacity - High bargaining power of auto customers - Active competition from international peers [6]. - Pricing erosion may offset end market growth and suppress margins [6]. - Global revenue for power SiC devices grew mid-teens in 2024, a significant slowdown from **84% growth in 2023**, with an expected **20% growth in 2025** [6]. 3. **Stock Calls**: - **SICC**: Downgraded to Neutral due to lingering competition and high valuation (43x 2026E P/E). Expected to ramp up 8" substrate business but faces potential commoditization risk in the longer term [6][13]. - **StarPower**: Earnings forecasts for 2025 and 2026 are **10% and 19% below consensus**, respectively, due to lower revenue and gross margin [6]. - **United Nova**: Fundamentals improvement is on track, but concerns exist regarding ongoing losses and share count dilution [6]. - **NCE Power**: Fair risk-reward profile noted [6]. - **CR Micro**: Awaiting better visibility on demand outlook or profitability [6]. Financial Estimates and Revisions - **SICC**: - Revenue estimates for 2024E, 2025E, 2026E, and 2027E revised down by **16%, 21%, 29%, and 35%** respectively [14]. - Projected revenue growth of **33% CAGR** from 2024-2027, driven by technology leadership and market growth [13]. - Expected gross margin to peak at **29-30% in 2025** [13]. - **StarPower**: - Revenue estimates for 2024E, 2025E, and 2026E show a decline compared to consensus [9]. - **United Nova**: - Revenue estimates remain stable, but operating losses are a concern [9]. Pricing Trends - Anticipated price reductions for both **6" and 8" substrates** due to competitive pressures and market dynamics [14]. - Significant price decline of **30-40% for 6" substrates** during 2024, with continued competitive pressure expected [14]. Additional Insights - The **SiC device market** is projected to account for **10% of total discrete semiconductor TAM in 2024** [38]. - The growth rate of the power SiC device TAM is expected to influence SICC's substrate revenue growth, with a projected **40% growth for SICC's n-type substrate revenue in 2025** [42][43]. Conclusion - The report indicates a cautious outlook for the China power semiconductor sector, with specific challenges related to pricing, competition, and demand dynamics. The downgrades reflect a more conservative view on growth potential amidst these challenges.

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: China Materials, specifically in the sectors of aluminum, lithium, gold, steel, cement, coal, glass, and battery metals [1][2][3][4][5][6] Core Insights and Arguments - **Aluminum and Lithium Production**: Domestic production of aluminum and lithium is resuming post-Chinese New Year (CNY) holiday, with multiple aluminum plants in Sichuan gradually restarting operations [1][30] - **Lepidolite Mine Resumption**: A leading lithium battery producer has resumed production at its lepidolite mine in Jiangxi, which is expected to enhance domestic lithium carbonate supply [2][33] - **Gold Demand**: Gold prices increased by 2.1% week-over-week (WoW) to US$2,856/oz, with total gold demand reaching a record of 4,975 tons in 2024, driven by central bank purchases [3][39] - **Steel Market Stability**: Steel prices remained flat WoW, with slight increases in long steel inventories (up 9.1% WoW) and flat steel inventories (up 5.5% WoW) [3][9] - **Cement Market Weakness**: Cement prices were flat at Rmb399/ton, with weak supply and demand in southwest China during CNY [4][43] - **Coal Price Decline**: Coal prices decreased by 0.3% WoW to Rmb704/ton, with a notable drop in inventory levels [4][42] - **Glass Market Dynamics**: Glass fiber prices remained flat, while float glass prices increased slightly by 0.2% WoW [5] Additional Important Insights - **Trade Tensions**: Escalating trade tensions between the US and China, including a 10% incremental tariff on Chinese goods announced by the US [1][24] - **Inventory Levels**: Significant increases in inventory levels for various materials post-CNY, with glass inventory rising by 40% and solar glass inventory increasing to 39 days [5][6] - **Tariff Implications**: The State Council of China announced additional tariffs of 15% on US-origin coal and liquefied natural gas, indicating ongoing trade disputes [4][42] - **Market Sentiment**: Despite bullish sentiment in the steel market, supply pressures are limiting price increases, highlighting a cautious outlook for the near term [21][30] This summary encapsulates the key points discussed in the conference call, providing a comprehensive overview of the current state of the materials industry in China, along with significant market dynamics and external factors influencing these sectors.

J P M O R G A N Global Commodities Research 10 February 2025 Commodity Market Positioning & Flows Base metals drive a return to inflows as aluminum and steel are targeted for tariffs Global Commodities Research Tracey Allen (44-20) 7134-6732 tracey.l.allen@jpmorgan.com J.P. Morgan Securities plc Gregory C. Shearer (44-20) 7134-8161 gregory.c.shearer@jpmorgan.com J.P. Morgan Securities plc Natasha Kaneva (1-212) 834-3175 natasha.kaneva@jpmorgan.com JPMorgan Chase Bank NA Shikha Chaturvedi (1-212) 834-3245 sh ...

Summary of J.P. Morgan's Economic Research on China: January CPI Inflation Industry Overview - **Industry**: Economic Research focusing on China's inflation metrics, specifically Consumer Price Index (CPI) and Producer Price Index (PPI) trends. Key Points CPI Inflation Trends - **CPI Inflation Rate**: Increased to 0.5% year-over-year (YoY) in January 2025, up from 0.1% YoY in December 2024, aligning with J.P. Morgan's expectations of 0.5% and above the consensus of 0.4% [1][4] - **Lunar New Year (LNY) Effect**: The uptick in CPI is attributed to the timing of the LNY holiday, which occurred in January this year compared to February last year [1][4] - **Sequential Decline**: Seasonally adjusted, CPI fell by 0.1% month-over-month (MoM) in January, marking the fifth consecutive monthly decline [1][4] Food and Non-Food Prices - **Food Prices**: Rose modestly by 0.4% YoY in January, recovering from a decline of 0.5% YoY in December. However, food prices fell by 0.6% MoM seasonally adjusted [2][4] - **Non-Food CPI**: Increased to 0.5% YoY in January, up from 0.2% YoY in December, with energy prices showing mixed trends [3][5] Producer Price Index (PPI) Trends - **PPI Deflation**: Continued to show significant deflation at -2.3% YoY in January, unchanged from December. Seasonally adjusted, PPI fell by 0.1% MoM [7][11] - **Sector-Specific Trends**: Easing prices in industrial metals and construction materials were noted, while energy-related PPI saw a slight increase due to global oil price dynamics [8][11] Economic Outlook - **Deflationary Pressures**: Ongoing deflationary pressures are concerning, with significant demand-supply imbalances. The CPI inflation rate is expected to ease again in the coming months, with a forecast of an average CPI inflation of 0.2% for 2025 [9][12] - **Consumer Confidence**: The consumer confidence index remained subdued at 86.4 in December, indicating persistent concerns regarding job and income uncertainty [10][12] Policy Implications - **Policy Support**: There is an increasing focus on policies to boost consumption and mitigate deflationary pressures, including trade-in subsidies and support for low-income households [12][12] - **Forecast Adjustments**: The average PPI deflation is projected at -1.1% for 2025, reflecting ongoing challenges in the Chinese economy [12][12] Additional Insights - **LNY Impact on Services**: Notable spikes in prices for travel and entertainment services were observed due to the LNY holiday, with air ticket prices rising by 27.8% MoM [6][6] - **Weak Pricing Power**: The overall pricing power for consumer goods and services remains weak, exacerbated by ongoing economic uncertainties and housing market stress [10][12] This summary encapsulates the critical insights from J.P. Morgan's economic research on China's inflation dynamics, highlighting the interplay between seasonal effects, consumer behavior, and broader economic challenges.

February 10, 2025 06:42 PM GMT Investor Presentation | Asia Pacific India Consumer – Our Order of Preference The consumer sector remains under pressure amid the ongoing market correction, given the growth lows that companies continue to make. 1) Prefer F&B over HPC – The growth narrative may turn less negative vs. F25; Mass discretionary better poised for recovery vs. staples. 2) In discretionary, backing the leaders. Among value retailers, tier 2 market plays better placed vs. Metro and Tier 1 plays. 3) Co ...

Summary of Meitu Inc. Conference Call Company Overview - **Company**: Meitu Inc (1357.HK) - **Industry**: Greater China IT Services and Software Key Financial Highlights - **2024 Preliminary Results**: - Normalized net profit range: Rmb575 million, exceeding company guidance (Rmb550 million), Morgan Stanley estimate (Rmb547 million), and Factset consensus (Rmb567 million) [3] - Strong earnings growth driven by AI-led subscription revenue growth and improving operating leverage [2] - **Revenue Growth**: - Expected subscription revenue growth of 43% YoY in 2024, with paying users projected at 11.9 million (+31% YoY) and ARPU at Rmb180 [4] - Total consolidated revenue forecast for 2024: Rmb3,357 million, with a projected increase to Rmb4,675 million by 2026 [25] - **Profitability Metrics**: - Normalized net profit forecast for 2024 raised by 30.6% to Rmb780 million [45] - Expected normalized net profit CAGR of 19% from 2026 to 2029, primarily driven by overseas expansion [5] Strategic Insights - **AI Monetization**: - Meitu has been generating profit from GenAI since 2022, with lower AI model inference costs expected to enhance subscription revenue gross margins [4] - **Overseas Expansion**: - The launch of productivity apps and the X-design platform is anticipated to drive long-term growth [5] - Increased normalized net profit forecast for 2026 to Rmb1.08 billion, aligning with Meitu's target of Rmb1.1 billion [5] Valuation and Price Target - **Price Target**: - Raised by 20% to HK$5.40, reflecting a 16x 2026e P/E, which is considered undervalued compared to the expected 19% normalized net profit CAGR [6] - **Market Capitalization**: - Current market cap: Rmb18,151 million, with a share price close of HK$4.33 as of February 7, 2025 [7] Risks and Considerations - **Investment Risks**: - Potential risks include slower-than-expected growth in paying users, higher R&D expenses, and intensified competition from larger internet companies [44] - **Upside Potential**: - Faster adoption of AI and increased market share overseas could enhance growth prospects [42] Conclusion - Meitu Inc. is positioned for significant growth driven by its transition to a subscription-based model, effective AI monetization strategies, and overseas expansion initiatives. The company's financial performance is expected to improve, with a favorable outlook on profitability and revenue growth. The stock is currently viewed as undervalued relative to its peers, presenting a potential investment opportunity.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Wind Power in China - **Key Focus**: Offshore and onshore wind installations, market dynamics, and stock performance of related companies Core Insights and Arguments 1. **Offshore Wind Installation Growth**: - Expected acceleration of offshore wind installations to 16GW in 2025, 20GW in 2026, and 22GW in 2027, supported by faster approval processes since Q4 2024 [1][3][30] - Total planned capacity of offshore wind projects in China's exclusive economic zone is 230GW, with only 41GW operational by the end of 2024 [3][32] 2. **Onshore Wind Installation Forecasts**: - New installation forecasts raised to 116GW in 2025 and 130GW in 2026, driven by attractive project returns and replacement demand [2][26] - Onshore installations recorded 75.31GW in 2024, up from 69.07GW in 2023 [26] 3. **Market Dynamics**: - The market sentiment has been positive, with stock prices of wind equipment companies rising between 18.8% and 151.3% from September to November 2024 [11] - Concerns arose in December 2024 due to operational delays and profit-taking, leading to weaker stock performance [11] 4. **Component Suppliers' Advantage**: - Component suppliers are expected to benefit from the rapid growth in wind turbine sizes, with ≥8MW models comprising over 35% of public tenders in 2024 [4][19] - The procurement of high-quality large-sized components may become a bottleneck, enhancing suppliers' bargaining power [4] 5. **Regulatory Environment**: - Anticipation of new regulations for deep-and-distant sea offshore wind projects in 2025, which could standardize and facilitate development [3][12] - Limited impact from renewable energy tariff reforms on offshore wind development due to separate categorization from onshore projects [3][17] Stock Recommendations 1. **Overweight (OW) Ratings**: - Ningbo Orient (603606.SS) and ZTT (600522.SS) are favored due to their roles in subsea cable supply and offshore development acceleration [5][18] - Jinlei (300443.SZ) and Riyue (603218.SS) upgraded to OW based on potential price increases for casting parts [5][19] 2. **Equal-weight (EW) Ratings**: - Goldwind A/H (002202.SZ) remains EW on valuation despite cautious views on wind turbine OEMs [5][21] 3. **Underweight (UW) Ratings**: - Ming Yang (601615.SS) and Shanghai Electric A/H are rated UW due to high exposure to offshore WTG market and pricing risks [5][21] Additional Important Insights - **Public Tendering Trends**: - Public wind turbine tenders reached 144GW in 2024, significantly up from 86GW in 2023, indicating strong demand [2][26] - The tendering process has accelerated, with expectations of 15-20GW in 2025 compared to previous years [3][30] - **Price Trends**: - Onshore wind turbine prices are stabilizing with mild increases expected in 2025, influenced by a convention among manufacturers to maintain fair competition [34] - Despite this, no significant market consolidation is observed, which may limit sustained price rebounds [35] - **Future Outlook**: - Continued growth in wind installations is anticipated, driven by favorable economics and regulatory support, with projections of 137GW in 2027 [26][30]

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the oil industry, focusing on the impact of tariffs, sanctions, and OPEC+ production quotas on the oil market [1][2][3]. Core Insights and Arguments 1. **Impact of Tariffs and Sanctions**: Tariffs and counter-tariffs are expected to create uncertainty in oil demand, particularly affecting the oil-intensive sectors of the global economy [1][11]. 2. **OPEC+ Production Quotas**: It is anticipated that OPEC+ will extend current production quotas into the second half of the year, which could lead to a balanced oil market [1][3][12]. 3. **Brent Price Forecasts**: Brent price forecasts for 2025 remain largely unchanged, with slight adjustments for the first quarter. The expected prices are $75.0 for Q1, $72.5 for Q3 and Q4, and $70.0 for 2026 [3][18]. 4. **Demand Growth Forecast**: The demand growth forecast is at the lower end of the consensus range, with expectations of 1.0 to 1.4 million barrels per day (mb/d) [13][14]. 5. **Russian Oil Exports**: Recent sanctions have led to a decline in Russian oil exports, with a reduction of approximately 150,000 barrels per day (kb/d) in the second half of the year [14][23]. 6. **Supply Dynamics**: Non-OPEC supply growth is projected at 0.8 mb/d for 2025, which is below the consensus estimate of 1.1 mb/d. This reflects ongoing challenges in offsetting declines from mature fields [38][39]. 7. **Iranian Oil Production**: There is an expectation of a decline in Iranian oil production due to renewed sanctions, with a forecasted decrease of 0.3 mb/d from January 2025 to January 2026 [41][43]. 8. **Saudi Aramco's Pricing Strategy**: Saudi Aramco's Official Selling Prices (OSPs) for March indicate a willingness to keep supply constrained, with significant increases in OSPs compared to market expectations [45][46]. 9. **Regional Impacts of Tariffs**: The potential tariffs on Canadian and Mexican oil imports have created uncertainty, but the overall impact on global oil flows is expected to be modest [26][32]. Additional Important Observations 1. **Geopolitical Tensions**: The oil market is currently facing geopolitical tensions, including sanctions on Russia and Iran, which are influencing supply and demand dynamics [9][21]. 2. **Seasonal Demand Patterns**: Demand growth is expected to be concentrated in the transition from Q2 to Q3, with a forecasted surplus in Q2 turning into a deficit in the second half of the year [16][17]. 3. **Refinery Margins**: Refining margins and product crack spreads have risen to offset the higher costs of Canadian crude, indicating localized market adjustments [30][32]. 4. **Kazakhstan and Libya**: Both countries are noted for their potential production growth, with Libya's exports rising and Kazakhstan's Tengiz expansion project expected to contribute to increased output [49][50][52]. This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the oil industry.

Summary of Key Points from the Conference Call Industry Overview - The conference call discusses the impact of US tariffs on the global economy, particularly focusing on trade dynamics involving Canada, Mexico, and China [2][3][4][6][7]. Core Insights and Arguments 1. **Impact of US Tariffs**: The introduction of US tariffs has led to significant market volatility across various sectors, including currencies, rates, equities, and cryptocurrencies [2][11]. 2. **Trade Vulnerability**: Canada and Mexico are particularly vulnerable, with over 75% of their exports directed to the US. The potential implementation of tariffs could have severe economic repercussions for these countries [3][19]. 3. **US Economic Strength**: Despite the tariff threats, the US economy started 2025 from a position of strength, with consumer consumption rising by 4.2% quarter-on-quarter annualized in Q4 2024, driven by strong real income growth [5][43]. 4. **Global Trade Risks**: The uncertainty surrounding tariffs poses risks to global trade and economic growth, potentially leading to a reevaluation of investment plans and supply chain adjustments [4][9]. 5. **China's Economic Outlook**: China faces challenges due to the imposition of additional tariffs, which could hinder its growth recovery. The economy showed some revival in Q4 2024, but ongoing uncertainty and low consumer confidence may impede further progress [6][54][59]. 6. **European Economic Struggles**: The European economy is facing a gloomy outlook, with stagnant GDP growth in the eurozone and the UK, despite tight labor markets and improving real incomes [7][72]. 7. **Emerging Markets**: India is experiencing signs of economic wobbling, leading to rate cuts by the Reserve Bank of India. Brazil, on the other hand, is showing stronger growth data, prompting tighter monetary policy [8][81][88]. 8. **Inflation Concerns**: The potential for increased goods inflation in the US due to tariffs is highlighted, with the risk of imported inflation affecting consumer prices [32][34][39]. 9. **Central Bank Challenges**: Central banks are faced with the dilemma of managing inflationary pressures while supporting growth amid tariff-related supply shocks [9][42]. Additional Important Insights - **Consumer Confidence**: While business confidence in the US has improved, consumer sentiment remains mixed, indicating potential challenges ahead [45][50]. - **Commodity Prices**: The report notes that while oil prices remain low, gas prices have risen, contributing to inflationary pressures, particularly in food prices driven by oils and dairy [92][98]. - **Trade Dynamics**: The US has seen stronger import growth from Vietnam compared to China, indicating shifts in trade patterns due to tariff implications [27][28]. This summary encapsulates the critical points discussed in the conference call, providing insights into the current economic landscape influenced by tariff policies and their broader implications on global trade and growth.