5 February 2025 Equity Research Report China software Equities DeepSeek-R1 marks further AI monetization China DeepSeek-R1 – strong performance at low cost: DeepSeek-R1 is a reasoning model developed by DeepSeek, a Chinese AI startup. As a reasoning model (vs general model), it first generates a Chain of Thought to enhance the accuracy of responses before delivering the final answer. This open-source model has shown robust performance (rivaling OpenAI's o1 in mainstream benchmarks) at a much lower cost in m ...

Summary of Precious Metals Daily Commodities Report Industry Overview - The report focuses on the precious metals market, specifically gold, silver, platinum, and palladium, highlighting recent price movements and market dynamics [1][2][3]. Key Points Gold Market Insights - Gold prices reached a new high of USD 2,882/oz, driven by geopolitical tensions and trade issues, alongside a weaker USD and lower yields [6][5]. - The World Gold Council reported record demand for gold in Q4 2024, with total demand rising by 1% year-on-year to 4,974 tons, supported by significant central bank purchases exceeding 1,000 tons [8][5]. - Central bank demand in Q4 2024 was approximately 333 tons, indicating strong institutional interest [8][5]. - Gold ETFs showed stabilization after three years of outflows, suggesting renewed investor confidence [8][5]. - The report anticipates that geopolitical and trade risks will continue to support gold prices, although potential breakthroughs in trade could lead to price declines [9][5]. Silver Market Dynamics - Silver prices lagged behind gold, with underlying demand from both industry and coin purchases considered weak [10][5]. - The report suggests that silver prices could decline if gold's rally moderates, indicating a close correlation between the two metals [10][5]. Platinum and Palladium Trends - Platinum prices showed some strength, while palladium remained sluggish, affected by concerns over auto demand and potential tariff impacts [10][5]. - The report notes a mixed outlook for platinum group metals (PGMs), with a shift away from electric vehicles potentially providing some support [10][5]. Economic Indicators - The US ADP jobs report indicated an addition of 183,000 jobs in January, while the ISM services index eased to 52.8 from 54.0 in December, reflecting a mixed economic outlook [4][5]. - Richmond Fed President Tom Barkin expressed expectations for a significant decrease in annual inflation rates in Q1, suggesting no strong case for a rate hike [7][5]. Additional Insights - The report emphasizes the impact of tariff risks on the USD, which could further influence gold prices [6][5]. - The overall sentiment in the precious metals market remains cautious but optimistic, with a focus on geopolitical developments and their potential effects on investor behavior [9][5].

ab 5 February 2025 Global Research Asian Autos Sector What conditions support buying on weakness? High quality is key The 25% import tariffs on goods from Canada and Mexico to the US have been delayed one month to March, but tariffs, including on exports to the US from other regions, remains a risk factor for the auto and auto parts sector. Negative impact comes not only in the form of direct increases in vehicle costs, but also from multiple factors such as higher prices for parts and raw materials and del ...

5 February 2025 Equity Research Report China Consumer Equities Spring Festival: Green shoots amid moderation China Tourism – solid passenger traffic; strong inbound tourism. Inter-regional passenger trips exceeded 2.3bn during the eight-day Chinese New Year (CNY) – Spring Festival holiday (compared with 2.29bn during the seven-day CNY holiday last year) (as per Xinhua). According to the Ministry of Culture and Tourism, the eight-day Spring Festival holiday registered 501m domestic trips (5.9% y-o-y) and RMB ...

February 5, 2025 06:47 AM GMT China Tourism Group Duty Free | Asia Pacific Hainan DF Sales During CNY Holiday - Lukewarm Yet Sequentially Stable Offline Hainan duty free (DF) market: Per Haikou Customs (CCTV news, offline sales only), average daily DF sales during the CNY holiday (Jan 28-Feb 4) were at Rmb262mn/day, -16%, vs. 2024 CNY. The YoY decline widened from -5% in Dec-24 due to a high base, but it was visibly narrower vs -30% to -40% during March-Nov 2024. A sequentially stable CNY trajectory, in our ...

Table of Contents The world this week Politics Business The weekly cartoon This week's cover Leaders The vast, sophisticated and fast-growing global enterprise that is Scam Inc The meaning of Donald Trump's war on woke workers America's scheme for Gaza contains much to regret It's not over: Donald Trump could still blow up global trade How Labour can unshackle Britain's most innovative region Letters Letters to the editor By Invitation Donald Trump poses a grave threat to others' sovereignty and freedom, sa ...

Company and Industry Overview * **Company**: Dana Incorporated (NYSE:DAN) * **Industry**: Automotive and mobility * **Focus**: Engineered powertrain, sealing, and thermal management solutions for internal combustion engines (ICE), plug-in hybrids (PHEV), and electric vehicles (EV). Key Financial Highlights * **Third Quarter 2024**: * **Sales**: $2.5 billion, down 2.5% year-over-year due to softening demand for EVs and ICE vehicles. * **Adjusted EBITDA**: $232 million, down slightly from last year despite the sales reduction. * **Profit Margin**: 9.4%, up 30 basis points year-over-year. * **Year-to-Date 2024**: * **Sales**: $7.95 billion, down $119 million year-over-year. * **Adjusted EBITDA**: $699 million, up $10 million year-over-year. * **Profit Margin**: 8.8%, up 30 basis points year-over-year. Market and Operational Updates * **Off-Highway Segment**: * **Demand**: Lower, particularly in Europe, due to softening construction and agriculture equipment markets. * **Efficiency**: Company achieved company-wide efficiency improvements, resulting in increased profit margin. * **EV Segment**: * **Demand**: Declining due to lower end market demand in driveline segments, partially offset by gains in battery cooling sales. * **Investment**: Company continues to invest in EV technology and capacity, but remains flexible based on market demand. * **Overall Strategy**: * **Maintain Discipline**: Achieve balanced growth while navigating market cyclicality and volatility. * **Leverage Synergies**: Maximize impact through product, system, and technology offerings across all end markets. * **Optimize Resources**: Maintain agility to meet ICE, PHEV, and EV demand across multiple markets and regions. * **Prudent Capital Allocation**: Maximize investment in new business growth. Future Outlook * **2024**: * **Sales**: Expected to be about $10.3 billion, down from previous guidance due to lower demand for traditional and electric vehicles. * **Adjusted EBITDA**: Expected to be about $875 million at the midpoint of the updated range. * **Free Cash Flow**: Expected to be about $100 million. * **2025**: * **Lower Cost Structure**: Expected due to navigating softer end market demand and tempered demand for electric vehicles. * **Investment**: Expected to be about $375 million to support backlog and technology development. Additional Notes * **Inflation**: Company continues to manage inflationary pressures through cost-saving actions and improved efficiency. * **Commodity Prices**: Lower commodity prices have positively impacted profitability. * **Capital Allocation**: Company remains focused on prudent capital allocation to support growth and maximize returns.

Company and Industry Highlights * **Company**: Givaudan SA (OTCPK:GVDBF) * **Industry**: Fragrance, Taste & Wellbeing * **Date**: January 24, 2025 * **Key Highlights**: * **Strong Performance**: Givaudan reported a strong performance in the first half of 2024, driven by high sales growth across all markets, segments, and customer groups. * **Sales Growth**: Sales reached CHF3.7 billion, a growth of 12.5% on a like-for-like basis and 5.7% in Swiss francs. * **EBITDA and Profitability**: Comparable EBITDA increased to CHF929 million, lifting the EBITDA margin to 24.8% from 22.7% last year. Net income increased by almost 31% to CHF588 million. * **Market Segments**: Fragrance & Beauty Group grew at 15.3%, while Taste & Wellbeing division grew at 9.9%. High-growth markets represented 46% of total sales. * **Innovation**: Givaudan focused on innovation, launching new products and addressing consumer needs in areas like biotechnology, sustainability, and digitalization. * **2025 Strategy**: Givaudan outlined its 2025 strategy, focusing on expanding the portfolio, expanding customer reach, and focusing market strategies. * **Outlook**: Givaudan expects continued growth in 2024, with a focus on operational excellence and navigating a volatile geopolitical environment. Key Points * **Management Changes**: Tom Hallam, CFO, retired and handed over the position to Stewart Harris, effective August 1, 2024. * **Sales Performance**: * **Fragrance & Beauty**: Sales grew 15.3% on a like-for-like basis, driven by volume growth and new wins. * **Taste & Wellbeing**: Sales grew 9.9% on a like-for-like basis, driven by volume growth and new wins. * **Market Performance**: * **High-growth Markets**: Represented 46% of total sales and grew at a strong double-digit rate. * **Latin America**: Showed the highest like-for-like growth with 31.5%, driven by FX pricing in Argentina. * **Asia Pacific**: Grew at 11.4%, with all key markets contributing to the growth. * **EMEA**: Grew 11.4%, with strong performance in mature and high-growth markets. * **North America**: Posted positive like-for-like growth in the first half of the year. * **Innovation**: * **Scentaurus Vanilla**: A long-lasting, high-performing non-colouring vanilla note for liquid detergents. * **Nympheal**: A game-changing ingredient for white floral fragrances. * **Alternative Dairy Ingredients**: Enabling customers to use natural proprietary ingredients for alternative dairy products. * **Digitalization**: Launching a new digital platform for co-creative innovative wellness experiences. * **Financial Performance**: * **Group Sales**: Over CHF3.7 billion, an increase of 5.7% in Swiss francs. * **EBITDA**: Increased to CHF906 million compared to CHF763 million in 2023. * **Net Income**: Increased to CHF588 million, a growth of 30.9% compared to 2023. * **Free Cash Flow**: Increased to CHF197 million, a growth of CHF93 million compared to 2023. * **2025 Strategy**: * **Expand Portfolio**: Acquired B kolor in Italy to expand in the beauty makeup space. * **Expand Customer Reach**: Focus on local and regional clients. * **Focus Market Strategies**: Focus on growth opportunities in high-growth markets and emerging markets. * **Outlook**: * **Input Costs**: Expected to increase slightly. * **Operational Excellence**: Focus on operational excellence and footprint optimization. * **Geopolitical Environment**: Navigate a volatile geopolitical environment. Additional Information * **Conference Call Participants**: Alex Sloane (Barclays), Celine Pannuti (JPMorgan), Charles Eden (UBS), Daniel Buerki (ZKB), Arben Hasanaj (Vontobel), Georgina Fraser (Goldman Sachs), Nicola Tang (BNP Paribas) * **Q&A Session**: Covered various topics including margins, volumes, pet food, packaged food, Taste & Wellbeing margin, FX impact, raw material procurement strategy, balance sheet, capital allocation priorities, and beverage and consumer products within fragrance.

Industry/Company * **Company**: The Charles Schwab Corporation (NYSE: SCHW) * **Industry**: Investment Banking, Financial Services Core Points and Arguments * **2024 Q3 Results**: Schwab reported strong financial results for the third quarter of 2024, with revenue up 5% year-over-year to $4.8 billion, adjusted pre-tax income up 5%, and adjusted EPS of $0.77. * **Client Growth**: Schwab experienced strong client growth, with net new assets more than doubling from the third quarter of 2023. Former Ameritrade clients continued to contribute positively to net new assets. * **Strategic Focus Areas**: Schwab outlined four strategic focus areas: Scale & Efficiency, Win-Win Monetization, Client Segmentation, and the Brilliant Basics. Progress was made in each area during the third quarter. * **Cost Efficiency**: Schwab captured 95% of its Ameritrade run rate expense synergies and expects to capture the rest by the end of the year. Adjusted expense on client assets (EOCA) fell to 12 basis points in 2024, down from 16 in 2019. * **Wealth Management**: Schwab saw strong growth in managed investing net flows, with year-to-date managed investing net flows up 65% compared to last year. Clients added $11.5 billion to Schwab's full-service wealth offers in the third quarter, a 75% increase from the prior year quarter. * **Pledged Asset Line (PAL)**: PAL balances reached a record $15.7 billion, an increase of 16% over last year. Former Ameritrade clients represented 44% of PAL balance growth. * **RIA Services**: Schwab continues to invest in its custody business for RIAs, providing them with an open architecture platform and unmatched resources, services, and education. * **Client Experience**: Schwab focused on improving the client experience, with average speed to answer the phone less than 40 seconds in the third quarter and client easy scores for service teams at 92%. * **Capital Levels**: Schwab's adjusted Tier 1 Leverage ratio expanded by over 70 basis points to 6.7% in the third quarter, approaching its 6.75% to 7% operating objective. Other Important Points * **Transition**: Walt Bettinger, Co-Chairman and CEO, will transition into his new role as Executive Co-Chairman, and Rick Wurster will assume the role of CEO in January 2025. * **CFO Transition**: Mike Verdeschi joined Schwab as CFO in May 2024 and provided an update on the company's financial performance and outlook. * **Securities Portfolio**: Schwab does not plan to pursue a holistic restructuring of its securities portfolio at this time, as it focuses on paying down supplemental funding at the banks. * **Capital Allocation**: Schwab's capital allocation strategy will focus on supporting business growth, paying down supplemental borrowings, and returning capital to shareholders through various means, including dividends, preferred security redemptions, and stock buybacks. * **2025 Outlook**: Schwab expects to continue building momentum in 2025, with revenue growth in the mid-single digits and adjusted EPS in the upper 80s range. The company remains confident in its ability to deliver profitable growth and return capital to shareholders.

Industry and Company Overview * **Industry**: Semiconductor and EDA (Electronic Design Automation) * **Company**: Synopsys, a leading provider of semiconductor and software solutions Key Points and Arguments * **Record Revenue and Profitability**: Synopsys achieved record revenue of $6.13 billion in FY24, up 15% year-over-year, with double-digit growth across all products and geographies. Non-GAAP operating margin reached 38.5%, and non-GAAP EPS grew 25% year-over-year. * **Strategic Focus on Growth Segments**: Synopsys sold its software integrity business and is acquiring Ansys, doubling down on its silicon to systems strategy and expanding into new adjacent areas. * **Megatrends Driving Growth**: Synopsys benefits from secular growth drivers such as AI, silicon proliferation, and software-defined systems. The company's success is tied to technology innovation cycles, particularly in AI and HPC chip design. * **AI and EDA**: Synopsys has been a pioneer in adding AI optimization engines to its products, with solutions like DSO.ai and VSO.ai delivering significant customer results. The company is also integrating generative AI into its platform, expanding the capabilities of Synopsys.ai. * **Multi-Die Designs**: Synopsys is actively involved in Multi-Die design, partnering with ecosystem leaders like TSMC to improve predictability and yield. The company's 3DIC Compiler and Synopsys.ai solutions are addressing thermal and power integrity challenges for CoWoS interposer packaging. * **Strong Segment Performance**: * **Design Automation**: Revenue grew 12% year-over-year, driven by strength in EDA software and hardware. The Fusion compiler and Synopsys.ai solutions contributed to this growth. * **Design IP**: Revenue grew 24% year-over-year, driven by broad-based strength. The company achieved significant design wins in PCIe 6, security integrity, and data encryption. * **Hardware**: Revenue grew 17% year-over-year, driven by exceptional momentum on both HAPS and ZeBu product lines. * **Financial Guidance**: Synopsys expects to grow revenue 10.1% to 11.1% in FY25, excluding the impact of the extra week and calendar year change. Non-GAAP operating margin is expected to expand by approximately 150 basis points, and non-GAAP EPS is expected to grow by approximately 13%. Other Important Points * **Regulatory Review**: The regulatory review process for the Ansys acquisition is proceeding as expected, with the HSR waiting period expiring and the FTC investigation ongoing. * **Backlog**: Synopsys ended the year with a non-cancelable backlog of $8.1 billion. * **Macroeconomic Uncertainties**: Synopsys is taking a balanced view of the macroeconomic environment, considering factors such as market dynamics, macro uncertainties, and the impact of the Ansys acquisition. * **China**: Synopsys is taking a cautious approach to China, considering the deceleration in revenue growth and the expansion of restrictions. The company expects China to grow in line with the corporate average in FY25.