EEMEA Oil and Gas Chartbook Equities Oil & Gas No rush EEMEA ◆ OPEC+ agrees to postpone output hikes as oil demand remains weak ◆ The third wave of Saudi jack up rigs suspensions may be larger than expected previously ◆ Oil imports to China rebound on stockpiling, refining margins weakened again, tanker and LNG spot freight rates remain under pressure and European gas inventories dropped below 2022 levels This chartbook provides a monthly commentary about oil and gas markets across EEMEA (page 3). Please cl ...

Key Points **Industry Overview** 1. **Export Demand**: Export demand remains strong, particularly in the Belt and Road (B&R) regions, contributing to higher margins. However, tariffs pose a downside risk. 2. **Domestic Market**: The domestic market is expected to see limited downside and some signs of recovery in 2025, driven by mild growth and potential stimulus measures. 3. **Sector Performance**: The construction machinery sector has seen a surge in stock prices YTD, driven by sustained export growth and domestic stimulus measures. **Company Analysis** 1. **Sany**: Sany is preferred due to its higher contribution from export and excavators. The target price for Sany is adjusted to HKD22.00 (RMB22.00) with a Buy rating. 2. **Zoomlion-H**: Zoomlion-H is also preferred due to its higher contribution from export and excavators. The target price for Zoomlion-H is adjusted to HKD6.20 (RMB7.90) with a Buy rating. 3. **Zoomlion-A**: Zoomlion-A is downgraded to Hold due to weaker-than-expected domestic sales and export growth moderation. The target price is adjusted to RMB7.90 (HKD6.20) with a Hold rating. **Market Outlook** 1. **Export Growth**: Export growth is expected to sustain at 10-20% in 2025, normalizing from the high base of 30-50% growth in 2024e. 2. **Domestic Growth**: Domestic sales growth is expected to turn positive in 2025, driven by easy comparisons and potential stimulus measures. 3. **Valuation**: The sector trades at a 2.0x 1-year forward PB, below the historical average of 2.3x since 2012. **Additional Considerations** 1. **Tariffs**: Tariffs remain a downside risk for export businesses. 2. **Domestic Weakness**: Domestic weakness in property-related machinery could impact overall sector performance. 3. **Replacement Demand**: Replacement demand is expected to be the main driver of domestic excavator sales in 2025e.

Company and Industry Highlights **1. Company Overview** - **Meituan (3690.HK)**: China's leading e-commerce platform for services, focusing on mass-market, essential, and high-frequency service categories. - **Business Segments**: Food delivery, in-store hotel & travel, new initiatives, and others. - **Growth**: Meituan has experienced significant growth, with its total gross transaction volume reaching Rmb515.6bn in 2018, a 44.3% increase year-over-year. **2. Post-3Q24 Management Investor Call Takeaways** - **Shen Hui Yuan and Pin Hao Fan**: Successful redirection of Shen Hui Yuan membership from food delivery to other segments like in-store, hotel, and travel. - **Core Local Commerce Unit Economics (UE)**: Significant improvement in UE due to economies of scale, increased 1P orders, and improving ad revenue as a percentage of GTV. - **Instashopping**: Order volume growth outgrew food delivery, reflecting management's efforts to increase purchase frequency. - **Instore, Hotel, and Travel**: Healthy growth in transaction frequency, particularly in lower-tier cities. - **New Initiatives**: Operating loss of new initiatives narrowed in 3Q24, with potential fluctuations in 4Q24E due to increased investments in overseas expansion and other factors. - **Overseas Expansion**: Management maintains an open-minded approach to overseas expansion, particularly in the Saudi market. **3. Valuation and Investment Strategy** - **Buy Rating**: Citi maintains a Buy rating on Meituan, citing its value proposition, technology-centric infrastructure, data capabilities, unique platform position, and attractive valuation. - **Catalysts**: Expected profitability of the food delivery business, scale-back of investments in new initiatives, and faster growth of higher-margin businesses. - **Valuation**: Citi uses a sum-of-the-parts (SOTP) approach to value Meituan, resulting in a target price of HK$203 per share. **4. Risks** - **Competition**: Intense competition in the food delivery market. - **Labor Costs**: Rising labor costs. - **COVID-19**: Resurgence of COVID-19 cases in China. - **Economic Activities**: Weaker economic activities affecting consumer consumption. - **User Behavior**: Changes in user behavior and threats of mini programs. - **Strategic Partnerships**: Shifts in the nature of collaborations with strategic partners.

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V i e w p o i n t | 05 Dec 2024 21:56:26 ET │ 30 pages Fund Flow Insights Small recovery in EM fund flow CITI'S TAKE US$8.2bn inflow into equity funds — In the week ended 4 December 2024, bond funds and equity funds saw inflows of US$4.9bn and US$8.2bn respectively. Flows to US and Global ETFs remained strong at US$13.3bn and US$4.8bn respectively, but non-ETFs had seasonally weak flows. European funds saw large outflows of US$5.1bn. US$0.6bn inflow into EM funds — This is the first net inflow in 8 weeks to ...

6 December 2024 Equity Research Report China's poultry industry Equities Agricultural Products 2025 outlook: Supply pressure persists, but low costs may fuel an earnings improvement ◆ 9M24 chicken meat supply growth beats our estimates; we expect supply pressure to persist in 2025 ◆ Lower breeding costs due to falling raw material prices should improve breeding profitability in 2025 ◆ Maintain Buy on Sunner, TP to RMB19.40 (from RMB21.50), and Wellhope, TP to RMB9.10 (from RMB8.30) Recent share price rally ...

6 December 2024 Global bond flows compass ixed Incon 2024 in review: Flows in favour of high yielders � Asia: India Gsecs recorded their largest inflow in EM Asia followed by KTBs in Korea; sizeable outflows from China government bonds ♦ LatAm: Strong inflows into Brazil local government debt; foreign demand for Mexico Mbonos has remained choppy ◆ CEEMEA: Strong foreign inflows into long-dated PolGBs and SAGBs; non-residents trimmed their exposure in CZGBs Chart of the week: Strong y-t-d foreign inflows int ...

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06 Dec 2024 16:00:00 ET │ 24 pages US Equity Strategy 2025 Outlook: Expect a Volatile Bull CITI'S TAKE We maintain a positive view on US equities headed into 2025. A base case 6500 S&P 500 target allows for mid-single digit gains on the heels of backto-back 20%+ years. Ongoing soft landing and Artificial Intelligence tailwinds now interact with Trump policy promises, and risks. Continued broadening beyond Mega Cap Growth impacts is critical but an extended valuation starting point will be an ongoing hurdle. ...

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