Summary of the Conference Call on China Technology and AI Landscape Industry Overview - The report focuses on the AI landscape in China, highlighting the significant cost advantages of AI inference in China compared to the US, which could lead to wider adoption once a compelling use case is identified [1][2][3] Key Developments in AI Models - Major Chinese tech companies such as Alibaba (BABA), ByteDance, Tencent, and startups like MiniMax and Moonshot AI have made substantial advancements in AI models since the last update in September 2024 [2] - Chinese AI players have narrowed the gap with US counterparts through innovative techniques and fine-tuning existing models [2] Cost Advantages - The cost of adopting AI in China is approximately 80% cheaper than in the US, with ByteDance's model showing input and output costs at 4% and 3% of OpenAI's GPT-4o costs, respectively [3] - Despite lower costs, many Chinese AI companies are not prioritizing monetization in the near term [3] Innovations and Techniques - DeepSeek's R1 model has shared its training techniques publicly, which may accelerate global AI model development [4] - The commercial value of AI is expected to depend on discovering a "killer use case" [5] - The report emphasizes the importance of model efficiency, particularly through the Mixture-of-Experts (MoE) framework and reinforcement learning (RL) [11] Performance Comparisons - Recent models from Chinese companies have shown competitive performance against leading global models like GPT-4o and Claude-3.5-Sonnet [18] - ByteDance's Doubao-1.5-pro is noted for its efficiency, outperforming several benchmarks while maintaining low costs [26][29] Consumer Applications and Market Dynamics - Consumer AI applications in China are still in early stages, with no dominant "killer app" emerging yet [44] - ByteDance's Doubao leads the AI chatbot market with 75 million monthly active users (MAUs), significantly outperforming competitors [45] - User engagement metrics indicate a growing interest, with Doubao showing a notable improvement in user retention [46] Company-Specific Innovations Alibaba - Launched Qwen2.5-Max, which claims to outperform DeepSeek V3 and GPT-4o in some benchmarks, with a training cost of approximately $12 million [25] - Focused on enhancing model safety and alignment through extensive human evaluations [21] ByteDance - Released Doubao-1.5-pro, achieving a 7x efficiency leverage and maintaining a gross margin of 50% [26][27] - Plans to invest $12 billion in AI infrastructure in 2025 [27] Moonshot AI - Introduced Kimi k1.5, emphasizing long-context scaling and multimodal capabilities [28] - Achieved significant performance improvements in reasoning tasks [34] MiniMax - Launched MiniMax-01, focusing on expanding context windows and employing linear attention for efficiency [31][32] - Open-sourced its models to enhance collaboration and innovation [31] Tencent - Released Hunyuan large, which outperforms several benchmarks and introduced multimodal capabilities with Hunyuan3D 2.0 and HunyuanVideo [33][39] Baidu - Plans to unveil the next generation of its ERNIE model in early 2025, with significant improvements in performance [39] Conclusion - The Chinese AI landscape is rapidly evolving, with significant advancements in model efficiency and cost-effectiveness. However, the market for consumer applications remains nascent, and the search for a breakthrough use case continues. The competitive dynamics among leading Chinese firms indicate a strong push towards innovation and market leadership in the global AI arena.

Summary of Quarterly Bank Flows: 4Q24 Securities Holdings Industry Overview - The report focuses on the banking sector in North America, specifically analyzing the changes in bank portfolio holdings across various types of securities for the fourth quarter of 2024 (4Q24) compared to the previous quarter (3Q24) [1][2]. Key Findings Securities Holdings Changes - **US Treasuries**: - Banks added $73 billion in US Treasuries, with JP Morgan contributing $50 billion and Bank of America adding $25 billion. Citigroup reduced its holdings by $12 billion [6]. - Total US Treasuries held increased from $1,426,029 million in 3Q24 to $1,498,640 million in 4Q24, a change of $72,611 million (5.1% increase) [7]. - **Ginnie Pass-Throughs**: - A net addition of $12 billion was observed, with KeyCorp and US Bank adding $7 billion and $6 billion, respectively. Bank of America and Wells Fargo each reduced their holdings by approximately $3 billion [6]. - Total Ginnie pass-throughs increased from $502,441 million to $514,550 million, a change of $12,109 million (2.4% increase) [7]. - **Conventional Pass-Throughs**: - Banks added $10 billion, reversing previous negative demand. JP Morgan added $7.4 billion while Bank of America reduced $8 billion [6]. - Total conventional pass-throughs rose from $1,499,494 million to $1,509,865 million, a change of $10,371 million (0.7% increase) [7]. - **Agency CMBS**: - Demand was strong with a net addition of $7.3 billion, led by Bank of America with a $5.7 billion increase [6]. - Total agency CMBS increased from $343,651 million to $350,915 million, a change of $7,265 million (2.1% increase) [7]. - **CMOs**: - Positive demand continued with a net addition of $5 billion. Bank of America added $2.8 billion while KeyCorp reduced $4.4 billion [6]. - Total CMOs increased from $500,840 million to $506,087 million, a change of $5,247 million (1.0% increase) [7]. Notable Reductions - **Agency Debentures**: - Experienced the largest net reduction of $6 billion [6]. - **Corporate Bonds**: - Banks reduced corporate holdings by $3.9 billion [6]. - **Municipal Bonds**: - A reduction of $3.1 billion was noted [6]. - **ABS**: - Saw a reduction of $5.7 billion, primarily due to TD Bank's $3.5 billion reduction [6]. - **CLOs**: - Holdings declined by $3.9 billion, with Wells Fargo reducing $4 billion [6]. Additional Insights - The report includes detailed tables and charts illustrating the changes in bank holdings by type of securities, highlighting the largest net changes and current holders [2][9][17]. - The data is compiled from call report filings available at the FFIEC's Central Data Repository, focusing on AFS and HTM accounts for securities holdings [2]. - The report emphasizes that the data is based on amortized cost to exclude volatility from market value changes [2]. Conclusion - The banking sector showed a mixed performance in 4Q24, with significant additions in US Treasuries and Ginnie pass-throughs, while facing reductions in corporate bonds and agency debentures. The overall trend indicates a cautious but strategic repositioning among banks in response to market conditions.

Short-lived momentum? Economics Global PMI wrap up (January) The global composite PMI expanded at the start of 2025, with the headline index dropping from 52.6 to 51.8. Within sectors, the global manufacturing PMI rebounded to above the 50 threshold, even if the pace of growth is marginal. Meanwhile, the service sector showed a slower pace of growth. That said, most economies recorded services PMI readings above 50, with this part of the global economy still faring much better than the manufacturing part. G ...

Summary of J.P. Morgan U.S. Oil Production Tracker Industry Overview - The report focuses on the U.S. oil and gas production forecasts, specifically the Lower 48 states (L48) through 2030, highlighting significant growth in oil production driven primarily by the Permian Basin. Key Points Oil Production Estimates - **2024 Oil Production**: Averaged 12.82 million barrels per day (MMBo/d), an increase of 344 thousand barrels per day (MBo/d) or +3% compared to 2023's average of 12.48 MMBo/d [2][3] - **2025 Oil Production Forecast**: Revised to 13.21 MMBo/d, indicating a year-over-year growth of 395 MBo/d, largely attributed to the Permian Basin's growth of 244 MBo/d [3][6] - **2026 Oil Production Forecast**: Estimated at 13.17 MMBo/d, indicating a flat year-over-year change [3][6] Natural Gas Production Estimates - **2024 Natural Gas Production**: Averaged 101.7 billion cubic feet per day (Bcf/d), a decrease of 777 million cubic feet per day (MMcf/d) or -1% from 2023 levels [2][7] - **2025 Natural Gas Production Forecast**: Expected to average 105.8 Bcf/d, reflecting an increase of 3.9 Bcf/d year-over-year, driven by growth in the Permian (+1.4 Bcf/d), Appalachia (+1.2 Bcf/d), and Haynesville (+0.9 Bcf/d) [3][7] - **2026 Natural Gas Production Forecast**: Anticipated to reach 110.5 Bcf/d, with significant contributions from Appalachia (+1.9 Bcf/d), Haynesville (+1.0 Bcf/d), and Permian (+0.9 Bcf/d) [3][7] Basin-Level Insights - The Permian Basin is identified as the primary driver of growth in both oil and natural gas production, compensating for declines in other regions [2][3] - **DUC Count**: The total U.S. drilled but uncompleted (DUC) well count decreased by 113 wells (-4%) to 2,964 in February, with notable decreases in the Permian and Appalachia basins [7] - **TIL Activity**: Total TILs (turn-in-line) decreased by 3 month-over-month to 937 in December, with declines in major basins like Haynesville and Appalachia [7] Market Dynamics - **Commodity Prices**: WTI prices fell by $1.26 per barrel to $72.70 per barrel, while the Brent/WTI spread narrowed to $2.05 per barrel from $2.69 per barrel [7] - **EIA Comparisons**: The report includes comparisons of J.P. Morgan's forecasts against the EIA's Short-Term Energy Outlook, indicating discrepancies in oil supply estimates for December and January [7] Additional Considerations - The report emphasizes the importance of updated modeling that incorporates activity levels, lateral lengths, cycle times, and decline rates to refine production forecasts [3][7] - The potential impact of increased U.S. LNG export capacity on natural gas demand is noted as a significant factor for future growth [3] Conclusion - The U.S. oil and gas production landscape is expected to see continued growth, particularly from the Permian Basin, with revised forecasts indicating a positive outlook for both oil and natural gas production through 2026. The report highlights the need for ongoing monitoring of market dynamics and production activities across various basins.

Equity Research Report 6 February 2025 Xiaomi (1810 HK) Buy: Re-rating set to continue Xiaomi is becoming the key beneficiary of the nationwide subsidy programme. As stated in our report, Consumer electronics: Subsidies policy a tailwind, we believe the national subsidy programme will act as a tailwind for China's Android brands with their retail prices ranging mostly below the subsidy price cap. According to BCI data, 25W4 (20-26 January, the first week after the implementation of the national subsidy prog ...

Equity Research U.S. Gaming, Leisure & Lodging 6 February 2025 BYD 4Q24 Review: So You're Saying There's a Chance Solid 4Q report, as expected. Post election bump was downplayed, but likely for the sake of conservatism. Our estimates tick modestly higher. PT to $78, remain EW. BYD reported 3%/6% upside vs. us/Cons property adjusted EBITDAR. Compared to our model, outperformance was driven by Locals, Online and Managed, while MW&S was in-line with our estimate (and 2% ahead of Cons.). Looking forward, our 20 ...

EU Semiconductors ASML Holding NV Rating Our analysis leads us to conclude that our 2025 estimates are covered by the current backlog, assuming that all non-EUV bookings are for 2025. There is a risk that some have been pushed to 2026, but as lead times for these systems are typically 6-9 months, we believe the risk that the backlog would not be covered in time is low. This also implies that ASML still needs just over 19B of bookings to cover the 2026 backlog for our estimates, with just over 7B (or ~32 uni ...

February 6, 2025 12:59 AM GMT Shenzhen Envicool Technology Co Ltd | Asia Pacific Our thoughts on the recent stock price correction The stock correction reflects lower expectations for high- performance GPU demand and slower liquid cooling penetration growth, in our view. We stay constructive on long-term cooling market prospects thanks to accelerated AI application with notably declining costs, still benefitting Envicool. Envicool's share price fell 18% over the past two trading days vs. CSI300's -1%. We hi ...

J P M O R G A N NIM Asset quality Efficiency Capital See page 3 for analyst certification and important disclosures, including non-US analyst disclosures. Latin America Equity Research 06 February 2025 Inter 4Q24 Conference Call Highlights Today Inter hosted its 4Q24 conference call. Main highlights below: Loans J.P. Morgan does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the o ...

Equity Research China Technology 6 February 2025 China Technology CBO - China Brief Overnight - 2/6/2025 Premier Li Qiang vows to strengthen coordination between markets and policies and promote scientific and technological innovation; China's express delivery handled a total of 1.9 billion packages over the Spring Festival holiday; DeepSeek's DAUs have reportedly surpassed 20 million. Our daily product rounds up key stories from the Chinese language media overnight, focusing on developments in the technolo ...