Haier Smart Home Co. (600690.SS): Consumer & Leisure Corporate Day: High-end leading domestic improvement, focus on tariff; Buy 10 January 2025 | 4:28PM CST We hosted Haier Smart Home's management for a virtual meeting at the Consumer & Leisure Corporate Day on Jan 10. Key takeaways include: 1) Management commented revenue growth accelerated to DD% in 4Q mainly driven by domestic sales recovery (10%+ growth) supported by trade-in program, while overseas organic growth was largely stable vs previous quarters ...

V i e w p o i n t | 12 Jan 2025 16:12:30 ET │ 18 pages Taiwan Electronics & Semiconductors Taiwan Technology Sector Monthly Tracking – AI-related Names Still Outperforming CITI'S TAKE Given solid AI demand and upstream semiconductor component restocking, foundry makers including TSMC, UMC and VIS all reported inline/upbeat Dec and 4Q revenue. Mediatek also delivered better-than- expected 4Q revenue. In downstream, server players' Dec sales were tracking ahead. Wiwynn and Accton both delivered record-high mo ...

12 Jan 2025 15:22:58 ET │ 13 pages China Internet 2025 China Bus Tour Takeaways CITI'S TAKE We hosted an Internet bus tour in China on Jan 7th -10th and met with several internet companies including Alibaba Group, Autohome, Bilibili, JD.com, Kanzhun, Kuaishou, Trip.com and discussed ecommerce and local services landscape with industry speakers. Most discussed topics included trade-in program and its impact to various ecommerce players; implication to user traffic, ad spend and cross-sell on other categories ...

Summary of the Conference Call on LA Fire Exposure Analysis Industry Overview - The analysis focuses on the **U.S. Consumer** sector, specifically within **Consumer Discretionary** categories including **Hardlines, Softlines, and Restaurants** due to the ongoing wildfires in the LA area [1][2]. Core Insights - **Impact of Wildfires**: Historical data indicates that natural disasters like wildfires can lead to an immediate negative impact on sales, followed by a potential recovery in certain categories [1]. - **Current Situation**: As of January 12, 2025, the LA wildfires have been ongoing for six days, with significant destruction reported, including over 12,000 structures and more than 150,000 residents under evacuation orders [2]. - **Store Exposure Analysis**: The analysis categorizes companies based on their proximity to fire sites and areas affected by air pollution, using government data and company store location data [3]. Sector-Specific Findings U.S. Broadlines, Hardlines & Food Retail - **Exposure Level**: Minimal direct exposure to fire zones; no stores are located within the fire zones, and only a few are within a five-mile radius. Indirect exposure to the greater LA metro area is low to mid-single-digit percentages [8]. - **Sales Impact**: Expected slight negative impact on comparable sales due to store closures and reduced customer traffic from evacuations and air pollution [8][9]. U.S. Specialty Retail, Apparel & Footwear - **Exposure Level**: Limited direct exposure with only one store inside the fire zones. Certain retailers like JWN, ROST, and URBN are more susceptible to indirect exposure due to their locations in the greater LA area [13][14]. - **Sales Impact**: Anticipated slight sales headwind and negative impact on comparable sales due to store closures and reduced traffic [13]. U.S. Restaurants - **Exposure Level**: Most restaurants have minimal direct exposure, with only a few in the fire zones. However, some companies like Del Taco (~23% exposure), Kura Sushi (~18%), and Jack in the Box (~13%) have higher indirect exposure due to their presence in California [17]. - **Sales Impact**: Expected slight negative impact on comparable sales due to potential closures and reduced customer traffic from evacuations and air pollution [17]. Additional Insights - **Recovery Potential**: Some sectors, particularly home improvement and furnishings, may recover lost sales over time as consumers seek to rebuild and repair homes post-disaster [9]. - **Geolocation Data**: Specific retailers like RH have a higher exposure, with 7.5% of its U.S. store base located in areas affected by air pollution. Other notable retailers include TGT and COST, both with over 5% of their stores in the affected area [10]. Conclusion - The ongoing wildfires in LA present both immediate challenges and potential long-term recovery opportunities for various sectors within the U.S. Consumer industry. The analysis highlights the need for companies to adapt to changing consumer behaviors and market conditions in the aftermath of natural disasters [1][9].

Summary of the Conference Call on Greater China Technology Semiconductors Industry Overview - The report focuses on the **Greater China Technology Semiconductors** industry, specifically analyzing the performance of Taiwan's tech companies in December 2024 [1][2]. Key Financial Performance - **December Revenue**: Taiwan's tech companies experienced a **1% decrease month-over-month (MoM)** but a **35% increase year-over-year (YoY)**. Notably, several AI server supply chain companies achieved record monthly revenues [4][2]. - **Performance by Segment**: - **Datacenter/Smartphone Hardware and Packaging & Testing** companies exceeded expectations. - **Virtual Reality (VR), semiconductor materials, and thermal solutions** underperformed relative to expectations [4][2]. Investment Preferences - **Preferred Stocks**: The report recommends stocks with strong order visibility or leading market positions, including: - TSMC - KYEC - AllRing - ASMedia - Hon Hai - AVC - King Slide - E-Ink - Accton - Wiwynn [4][2]. - **Underweight Recommendations**: The report identifies Nanya Technology, Macronix, and NYPCB as key underweight (UW) stocks [4][2]. Market Outlook - The overall industry view is classified as **In-Line**, indicating that the performance of the semiconductor sector is expected to align with broader market trends over the next 12-18 months [2][4]. Additional Insights - The report emphasizes the dominance of **Artificial Intelligence (AI)** in driving revenue growth within the semiconductor sector, highlighting its critical role in shaping future market dynamics [1][2]. - Analysts express a cautious outlook on segments that did not meet expectations, suggesting potential risks for investors focusing on those areas [4][2]. Conclusion - The December revenue wrap-up indicates a mixed performance across Taiwan's tech companies, with AI-related sectors showing strength while others lagged. Investment strategies should focus on companies with robust order visibility and market leadership to navigate the current landscape effectively [4][2].

V i e w p o i n t | 10 Jan 2025 03:00:00 ET │ 12 pages US Semiconductors More CES DRAM Datapoints – PC End Market Slow, Handsets a Little Better Although DRAM Inventory in PC Market Almost Normal CITI'S TAKE We met with companies across the memory, PC and cell phone food chain at CES this week. It appears demand in the PC food chain is a little sluggish, while cell phone demand appears "ok". However, DRAM inventory in the PC food chain has declined and is close to optimal levels while in the cell phone food ...

10 Jan 2025 06:28:21 ET │ 10 pages Effects of 2024 Old-for-New Policy — (1) National scrap replacement met Cui's expectations. According to Cui, 2024 national scrap replacement declarations reached 2.9mn units by 31-Dec-2024, with FY volume likely reaching 3mn after accounting for pending approvals by 11-Jan-2025. Daily activity slowed to c.6k units in the final week of Dec-24, as consumers had acted early to meet 2024 policy deadlines. Cui estimates the program's total subsidy at Rmb60-70bn (c. Rmb20k/unit ...

January 12, 2025 10:13 PM GMT ADM & Bunge | North America Morgan Stanley & Co. LLC M Update 45Z Guidance Update The U.S. Treasury released its long-awaited preliminary guidance for the Clean Fuels Production Credit (45Z). The updated guidance (issued Friday) includes both: i) a notice of intent to propose regulations on the 45Z credit; and ii) a notice providing the annual emissions rate table for 45Z (please see below for more details). The response from industry participants has been mixed, highlighting t ...

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **China SMID Internet** sector, which includes companies with market capitalizations between **$10 billion and $50 billion**. Key players discussed include **Trip.com (TCOM)**, **Baidu (BIDU)**, and **Tencent Music (TME)** [1][2][3]. Core Themes and Insights 1. **Market Dynamics**: The China SMID Internet sector is characterized by two main themes: - **Single vertical platforms** (e.g., travel, mobility) that are structural winners in their categories. - **New media companies** (e.g., short-form video, streaming music) that face strong competition and have more tactical business models [1][2]. 2. **Consumer Spending Shift**: There is a notable shift in consumer spending from material goods to services and experiences, driven by post-COVID recovery and changing consumer preferences, particularly among Gen-Z [2][12]. 3. **AI and Product Innovation**: Companies are expected to focus on AI applications and product innovation, with a need for unique data ecosystems to effectively monetize these innovations [2][3][12]. 4. **Travel Sector Recovery**: The travel industry is anticipated to normalize in 2025, with robust growth expected in both domestic (approximately **10%** growth) and outbound travel (approximately **18-20%** growth) as the last effects of COVID recovery phase out [4][38]. Company-Specific Insights Trip.com (TCOM) - **Growth Projections**: TCOM is expected to maintain strong growth rates, with an estimated **18% revenue growth** for 2025, driven by international expansion and sustained domestic growth [40]. - **Market Position**: TCOM is gaining market share in the online travel agency (OTA) space, currently at **45% penetration**. The company is expected to continue expanding its offerings, including customized tours and car rentals [5][39]. - **Earnings Outlook**: The long-term earnings per share (EPS) growth is projected at mid-teens, supported by operational leverage and a strong competitive position [5][37]. Baidu (BIDU) - **Monetization Challenges**: Baidu is facing difficulties in monetization, with recovery expected to extend into **2026**. The company is struggling with lower ad rates and building an effective AI ecosystem [5][9]. - **Market Rating**: Baidu is rated as **Market-Perform**, with a target price of **$87**, reflecting a cautious outlook on its recovery trajectory [9][10]. Tencent Music (TME) - **SVIP Program Expansion**: TME plans to enhance its SVIP products, which could drive user growth and increase average revenue per user (ARPU) above current levels. The company is rated as **Outperform** with a target price of **$13** [5][10]. Additional Important Insights - **Investment Implications**: The overall investment thesis suggests that TCOM is a long-term quality compounder in the travel sector, while Baidu's challenges may limit its performance relative to peers [9][10]. - **Consumer Behavior Trends**: The shift towards experiences is expected to continue, with increased spending on travel, entertainment, and dining, indicating a robust recovery in consumer services sectors [12][17][25]. Conclusion The China SMID Internet sector is poised for growth, particularly in travel and new media, with TCOM showing strong potential for long-term performance. Baidu faces significant challenges, while TME is positioned to capitalize on its subscription model. The overall market dynamics reflect a structural shift in consumer spending and a focus on innovation and unique content.

January 12, 2025 07:25 AM GMT January 12, 2025 08:35 AM GMT January 12, 2025 09:24 AM GMT | M | | | | --- | --- | --- | | | | Update | | January 12, 2025 07:25 AM GMT January 12, 2025 08:35 AM GMT January 12, 2025 09:24 AM GMT | | | | Haitian International Holdings Limited | Asia Pacific | Morgan Stanley Asia Limited+ | | | | Sheng Zhong Equity Analyst | | | China BEST Conference | Sheng.Zhong@morganstanley.com | +852 2239-7821 | | | Chelsea Wang | | | | Equity Analyst Jinlin.Wang@morganstanley.com | +852 2 ...