Summary of US Large Cap Pharmaceuticals: Mid-Year State Of Play Industry Overview - The report focuses on the US Large Cap Pharmaceuticals sector, analyzing key companies such as ABBV, LLY, JNJ, MRK, BMY, and PFE [6][5][32]. Core Insights and Arguments 1. **Revenue Growth and Stability**: Projected revenues from growth/stable products for 2025-2030 are as follows: ABBV at $10.39 billion, LLY at $3.06 billion, JNJ at $1.68 billion, MRK at $1.37 billion, BMY at $0.60 billion, and PFE at $0.54 billion [5]. 2. **Patent Cliff Exposure**: The number of years to the next major patent cliff varies, with ABBV and MRK at 3.5 years, while LLY and JNJ face longer timelines [5]. 3. **Market Sentiment**: The report indicates a "Launch Trade" momentum, with high investor psychology impacting stock performance, particularly for ABBV and GILD as popular longs, while MRK is viewed as a funding underweight [6]. 4. **Macro Environment**: A friendlier US macro backdrop with diminished recession risks and benign inflation data is noted, which could complicate the case for large-cap biopharma relative to other sectors [6]. 5. **Drug Pricing Uncertainty**: Ongoing debates regarding drug pricing and potential implementation of Most Favored Nation (MFN) pricing are highlighted as significant uncertainties affecting investor sentiment [6]. 6. **Key Catalysts for 2H25**: Important upcoming catalysts include LLY's ATTAIN-1 data for an oral obesity pill, BMY's ADEPT-2 Phase 3 data for Alzheimer's treatment, and MRK's CADENCE trial outcomes [6]. Additional Important Considerations 1. **Tariff Implications**: The report discusses potential tariffs on pharmaceuticals, with an expected starting rate of 25% on transfer pricing, potentially dropping to around 10% based on negotiations [6]. 2. **Investor Positioning**: The healthcare sector is experiencing a positioning cleanse, with Medtech favored over large-cap biopharma [6]. 3. **Earnings Setup**: Investor sentiment is more comfortable with ABBV, PFE, and LLY, while concerns are raised regarding BMY's performance [6]. 4. **Government Exposure**: The report notes that government end-market exposure varies significantly among companies, with LLY and MRK having over 35% exposure to Medicare/Medicaid revenues [5]. Conclusion The US Large Cap Pharmaceuticals sector is navigating a complex landscape characterized by macroeconomic factors, regulatory uncertainties, and evolving investor sentiment. Key companies are positioned differently based on their revenue growth potential, patent cliff exposure, and government market dependencies. The upcoming catalysts and tariff implications will be critical in shaping the sector's performance in the second half of 2025.

Summary of Global Oil Market Conference Call Industry Overview - The conference call focuses on the global oil market, particularly the dynamics of oil prices, supply, and demand forecasts for Brent and WTI crude oil. Key Points Oil Price Forecasts - The 2025 Brent price forecast has been raised marginally by $1/bbl to $67/bbl, with a forecast of $65 in 3Q25, reflecting a slight increase in risk premium [2][16][18] - Oil prices experienced significant volatility in 2Q25, fluctuating over a $20/bbl range due to tariff risks and geopolitical tensions [2][16] - The expectation is for Brent prices to drop to the low to mid-$60s in the near term, with a projected surplus in the oil market [7][37] Supply Dynamics - OPEC+ is expected to increase production, contributing to larger surpluses in the oil market over the next three quarters [3][19] - The unwinding of OPEC+ voluntary cuts is anticipated to add approximately 1.1Mb/d by the end of August, with actual increases likely falling short of targets due to compensation plans [19][55] - US shale production is projected to grow by 0.3Mb/d in 2025 and 0.1Mb/d in 2026, with rig activity trending lower [20][82] Demand Outlook - Global oil demand growth is now expected to be 0.8Mb/d in 2025, reflecting improved GDP growth prospects and resilient demand year-to-date [21][22] - The demand outlook has improved due to a more favorable impact from tariffs than initially feared [40] Geopolitical Risks - The geopolitical risk premium has decreased following a ceasefire between Iran and Israel, with no significant impact on oil flows observed [66] - Renewed tensions in the Middle East could potentially lift Brent prices back into the $70/bbl range, but skepticism about supply disruptions remains [8][22] Market Sentiment - The market is currently in backwardation, indicating a rapid shift in sentiment rather than a fundamental loosening of the market [23] - The overall market balance is looser by 0.2Mb/d in 2025 and 0.1Mb/d in 2026 compared to previous forecasts, driven by rising OPEC+ supply [37] Upside and Downside Risks - Upside risks include firmer global economic growth and improved OPEC+ compliance, while downside risks involve a global economic slowdown and further OPEC+ production increases [32] Inventory Trends - Global oil inventories have been on an upward trend, with a continued build through 2Q25, indicating a growing surplus in the market [37][96] Additional Important Insights - The market is expected to experience a seasonal decline in oil demand, particularly in the Middle East, which could further impact prices [3] - The potential for higher Iranian exports exists, although US pressure on Iran appears less likely [4][66] - The overall sentiment suggests a bearish outlook for oil prices in the near term, with expectations of lower prices driving supply responses from US producers [7][37] This summary encapsulates the critical insights from the conference call regarding the current state and future outlook of the global oil market, highlighting the interplay between supply, demand, geopolitical factors, and market sentiment.

Summary of Key Points from the Conference Call Industry Overview - **Global Inflation Trends**: Global headline inflation in May remained stable at 2%, marking four consecutive months at historically normal levels. Core inflation slightly decreased to 2.4%, still above pre-pandemic levels, primarily due to elevated services inflation [1][5][6]. Core Insights - **US Inflation Expectations**: Limited tariff-related increases have been observed in US inflation, but survey evidence indicates that inflationary pressures are expected to rise as tariff impacts materialize. The expectation is for US inflation to increase due to these pressures [1][5]. - **Global Economic Conditions**: Below-trend growth and low oil prices, despite geopolitical challenges, are anticipated to keep inflation in regions outside the US contained [1][5]. - **Expansion of Inflation Monitor**: The latest global inflation monitor has been expanded to include US import prices, providing a broader view of inflation dynamics [1][5]. Important Data Points - **Core Inflation Rates**: The core inflation rate for developed markets (DM) is at 2.4%, while emerging markets (EM) excluding China show a core inflation rate of 2.6% [1][5]. - **PPI Trends**: The Producer Price Index (PPI) for global DM is at -0.8%, while EM stands at 1.7%, indicating differing inflationary pressures across regions [1][5]. - **Services Inflation**: Services inflation remains high at 4.7% for DM, with EM ex-China at 2.8% [1][5]. Additional Insights - **US Import Prices**: The report highlights US import inflation, which is currently at 0.2% overall and 1.3% excluding food and fuels, indicating a nuanced view of import price pressures [1][28][29]. - **Geopolitical Factors**: The geopolitical landscape continues to influence inflation dynamics, particularly in relation to oil prices and trade tariffs [1][5]. Conclusion - The conference call provided a comprehensive overview of global inflation trends, with a specific focus on the US market. The insights into core inflation rates, PPI trends, and the impact of geopolitical factors are crucial for understanding the current economic landscape and making informed investment decisions.

Summary of J.P. Morgan Japan Equity Strategy Conference Call Industry Overview - The conference call primarily discusses the **Japanese corporate sector**, focusing on the findings from the **June BOJ Tankan survey** regarding business sentiment and corporate earnings forecasts. Key Points and Arguments Impact of US Tariffs - The June BOJ Tankan indicates that **US tariffs have not significantly dampened corporate sentiment**, with a business conditions diffusion index (DI) for large manufacturers remaining steady at **13 points**, surpassing the Bloomberg consensus of **10 points** [1][4] - However, corporate earnings forecasts predict a **10% drag on net profit**, particularly affecting the **manufacturing sector**, especially **automobiles** and other processing industries [1][4] Corporate Earnings Forecasts - The FY2025 net profit growth forecast for large enterprises is revised to **-5.3%**, down from **-1.3%** in the March survey, aligning with the broader TSE Prime constituents' forecast of **-5.8%** [1][4] - **Manufacturers** lowered their profit growth forecast to **-9.8%**, while **non-manufacturers** raised theirs to **-0.8%** from **-2.0%** [1][4] Sales and Capital Expenditure (Capex) - Both manufacturers and non-manufacturers have increased their sales forecasts, with capex plans revised sharply upward to **+11.5% YoY** overall for large enterprises, driven by investments in **semiconductors**, **automation**, and **power transmission/distribution** [1][5] - Capex growth for manufacturers is projected at **+14.3%**, while non-manufacturers expect **+9.9%** [5] Foreign Exchange and Inflation Outlook - The corporate forex estimate for FY2025 is set at **¥145/$**, indicating a **4% YoY strengthening of the yen**, which is expected to negatively impact EPS by approximately **2 percentage points** [5][30] - The inflation outlook has slightly decreased, with companies expecting general prices to rise by **2.4%** in one year, down from **2.5%** previously [5][31] Sector-Specific Insights - Business conditions DI worsened in sectors more exposed to US tariffs, such as **automobiles** and **machinery**, while sectors like **materials** (paper & pulp, steel, oil & coal) and **construction** showed improvement [4][5] - The market consensus appears more cautious than company outlooks in sectors like **steel**, **services**, and **paper & pulp**, while being relatively optimistic for **electric & gas utilities**, **real estate**, and **communications** [4][5] Overall Corporate Sentiment - Despite the challenges posed by tariffs, corporate earnings remain resilient, particularly in domestic non-manufacturing sectors, which aligns with the investment strategy focusing on domestic demand sectors and potential upside in **semiconductors** and **machinery** [1][5] Additional Important Information - The report highlights the **limited impact of tariffs** on business conditions, with a flat DI for manufacturers and slight deterioration for non-manufacturers, which was in line with market expectations [4][5] - The report also notes that the **FY2025 TOPIX consensus EPS** has seen downward revisions in overseas demand sectors, particularly **automobiles**, which have been lowered by **18%** over the past three months, yet still shows a modest **+3.3% YoY profit growth forecast** as of end-June [4][5] This summary encapsulates the critical insights from the conference call, providing a comprehensive overview of the current state of the Japanese corporate sector and its outlook amidst external pressures.

Summary of Key Points from the Conference Call Industry Overview - **Industry**: Multi-Industry, focusing on North America - **Key Trend**: US Reshoring evidenced by a significant shift in global capital expenditure (capex) trends since 2018 [1][3][7] Core Insights - **US Capital Formation**: The US has gained approximately 200 basis points (bps) in global investment share since 2018, reversing decades of decline, with total global investment around $30 trillion annually [3][7] - **Incremental Capex Share**: The US has captured about 30% of incremental global capex since 2018, a nearly threefold increase compared to the period from 1999 to 2017 [7][8] - **Profit Growth Potential**: The US Industrial sector is expected to grow profits at an accelerated rate, with projections suggesting a potential 10x profit uplift due to favorable capex trends [3][8] Economic Drivers - **Policy Impact**: The Trump administration's tariffs and the COVID-19 pandemic have highlighted the need for supply chain resiliency, contributing to the reshoring trend [3][8] - **Trade Deficit Strategy**: The ongoing trade negotiations aim to address the $1.2 trillion trade deficit by increasing domestic production and investment, which presents opportunities for companies focused on the US market [8] Market Positioning - **Investment Recommendations**: Favorable outlook on US companies involved in capex, with specific recommendations for companies like Trane Technologies (TT), Eaton Corporation (ETN), Rockwell Automation (ROK), and Johnson Controls International (JCI) [8][70] - **Caution on International Exposure**: A more cautious stance on international investments due to uncertainties in capacity expansion when the US market is contracting [8] Additional Insights - **Manufacturing Disconnect**: Despite the US Manufacturing PMI being in contraction for over two years, the US Industrial coverage has shown healthy organic growth, indicating a disconnect from broader manufacturing trends [15][8] - **Historical Context**: The US has historically lost market share to China since its WTO entry in 1999, making the recent gains particularly significant [3][13] Conclusion - The US is experiencing a notable shift in capital expenditure trends, with implications for domestic production and investment strategies. The reshoring trend is expected to be durable, providing a favorable environment for US industrial companies to thrive in the coming years [3][8][7]

Scott Silver - Specialist Sales - European TMT AC (44-20) 7134-0412 scott.silver@jpmorgan.com J.P. Morgan Securities plc Europe Specialist Sales 01 July 2025 J P M O R G A N ASML Buyside Survey Hi, We are conducting a buyside survey of investor expectations ahead of results on Wed 16thof July. Let me know your thoughts and will share the results next week. Click here to take the survey. Best, Scott European Tech Hardware & Payments Sandeep Deshpande AC (44-20) 7134-5276 sandeep.s.deshpande@jpmorgan.com J.P. ...

Summary of Key Points from the Conference Call Companies Involved - **Innovent Biologics (1801 HK)** - **Akeso (9926 HK)** Core Insights and Arguments Innovent Biologics - Innovent is positioned as a significant player in the China biopharma sector, focusing on oncology and GLP-1 therapies [4][8] - The company has 16 drugs on the market and approximately 4,000 commercial staff, with expectations to achieve IFRS net-income break-even by 2025 [8] - Projected sales for 2027 could reach RMB 20 billion based on company guidance [8] - Key upcoming events include: - Approval of IBI112 (IL-23p19 inhibitor) for psoriasis in 2H25 [5] - Phase 3 data readout for IBI343 (CLDN18.2 ADC) in 2H25 [5] - Data readout for IBI362 (GLP-1/GCGR) in 2H25/1H26 [5] - IBI363 (PD-1/IL-2α-bias) has shown promising data, with peak sales forecasted at RMB 7 billion in China and RMB 10 billion ex-China [16][8] - The GLP-1 drug mazdutide (IBI362) is expected to capture approximately 11% of the China GLP-1 market, with potential peak sales of RMB 50 billion [8] - Risks include potential pricing cuts, pipeline development setbacks, and competition in the weight loss drug market [8] Akeso - Akeso is recognized as a leading bispecific antibody company in China, having launched the first bispecific drug, AK104 (PD-1/CTLA-4), in 2022 [33][36] - Forecasted peak sales for AK104 in China are around RMB 6 billion, with potential expansions into various cancer indications [36] - AK112 (PD-1/VEGF bispecific) has been out-licensed to Summit Therapeutics, with expected peak sales of over RMB 5 billion in China and over USD 2.5 billion in the US [36] - Upcoming key events for Akeso include: - Sales data for AK104 and AK112 in 1H25 [34] - Detailed data readout for AK112 in various trials in 2H25/1H26 [34] - Concerns exist regarding AK112's commercialization potential in the US due to previous trial results, but there is optimism for improved outcomes with longer follow-up [40] - AK104's efficacy in trials has not been fully appreciated by the market, and a global development plan announcement could enhance investor interest [41][44] Additional Important Content - Innovent's pipeline includes a diverse range of assets across oncology, cardiovascular, autoimmune, and ophthalmology, which supports its growth strategy [12] - Akeso's sales forecasts indicate a strong growth trajectory, with total product sales expected to reach RMB 16.1 billion by 2034 [45] - Both companies face risks related to pipeline development and market competition, which could impact their future performance [8][34]

Summary of Geely Automobile Holdings Conference Call Company Overview - **Company**: Geely Automobile Holdings - **Industry**: China Autos & Shared Mobility - **Current Stock Rating**: Overweight [4] - **Price Target**: HK$21.00, representing a 32% upside from the current price of HK$15.96 [4] Key Financial Highlights - **Revised Full-Year Volume Guidance**: Increased by 11% to 3 million units from 2.71 million units, primarily driven by Geely Galaxy [2] - **Sales Performance**: - **Geely Brand (including Galaxy)**: Sold 1.2 million units in 1H25, a 57% increase YoY, exceeding the previous target of 2 million units [2] - **ZEEKR Tech Group**: Sold 245,000 units in 1H25, a 14% increase YoY, with a full-year target of 710,000 units [2] - **Overseas Sales**: 184,000 units in 1H25, down 8% YoY, trailing the full-year target of 467,000 units [2] - **June Sales**: 236,000 units sold, a 42% increase YoY, with 1.4 million units sold in 1H25, up 47% YoY [6] Product and Market Insights - **Geely Galaxy**: Contributed 39% of total sales volume and approximately 85% of the year-to-date increment [2] - **Upcoming Models**: Anticipated launches in 2H25 include the A7 and M9, targeting NEVs in the sub-Rmb150k segment [3] - **Brand Integration**: Monitoring potential scale benefits and cost savings to counteract price pressures in the mass market segment [3] Risks and Considerations - **ZEEKR Group Privatization**: Potential privatization remains a near-term concern [3] - **Market Demand**: A notable slowdown in domestic vehicle demand could impact performance [9] - **NEV Business Losses**: Expanding losses in Geely's NEV businesses amid price competition is a risk [9] - **Overseas Sales Competition**: Increased competition and protectionism may affect overseas sales [9] Financial Projections - **Revenue Estimates**: - 2025: Rmb285,192 million - 2026: Rmb350,643 million - 2027: Rmb377,926 million [4] - **EBITDA Estimates**: - 2025: Rmb21,211 million - 2026: Rmb28,457 million - 2027: Rmb32,366 million [4] - **Earnings Per Share (EPS)**: Projected to increase from Rmb1.68 in 2025 to Rmb2.40 in 2027 [4] Conclusion Geely Automobile Holdings is positioned for growth with a revised sales target and strong performance in the first half of 2025. However, the company faces challenges from market dynamics and competition, particularly in the NEV sector. Monitoring upcoming product launches and market conditions will be crucial for assessing future performance.

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the **global commodities market**, with a focus on **oil**, **agricultural commodities**, and **metals**. Core Insights and Arguments Oil Market Insights - There is a **21% risk of major supply disruption** in Gulf energy production flows, with potential crude prices reaching **$120-130** per barrel [5] - The current stability in oil prices is attributed to energy infrastructure being largely spared from direct attacks, with oil tanker transit through the **Strait of Hormuz** remaining steady [5] - Brent oil prices are averaging just under **$67** per barrel, aligning with forecasts for **2Q25** [5] - Oil is expected to trade in the **low-to-mid $60 range** for the remainder of **2025**, assuming the risk premium dissipates [5] - The US has outlined red lines for actions that would trigger a decisive response, which Iran's leadership historically seeks to avoid [5] Agricultural Market Outlook - Agricultural markets are trading below producer gross margins, indicating a **negative risk premium** across grain, sugar, and cotton markets [6] - The **BCOM Agri Index** is down **4% YTD**, reflecting a multi-year decline in global agricultural commodity availability through **2025/26** [6] - The upcoming **USDA acreage and stocks reports** are expected to be market-moving, with a heavy investor short across row crops [9] Metals Market Insights - Weakness in **gold jewelry demand** is noted, but it is not expected to significantly impact overall gold prices, which are forecasted to reach **$4,000/oz** [11] - The **copper market** is experiencing a slowdown in demand trends, particularly in China, with a **5% output slowdown** in steel production observed [17] - The **US oil-focused rig count** has declined by **six**, indicating a structural downtrend in activity, particularly in the **Niobrara** and **Anadarko Basin** [10] Inventory and Demand Trends - Global oil demand expanded by **400 kbd** in May, while observable liquid inventories built by **2.8 mbd** [20] - OECD oil product inventories are starting to build, indicating a shift in market dynamics [7] - Total liquid inventories globally have increased by **9 mb** in the third week of June, marking the highest rate of build in **13 months** [9] Other Important Insights - The geopolitical landscape, particularly tensions involving Iran, is influencing market dynamics and risk premiums across energy markets [3][19] - The **natural gas market** remains stable despite geopolitical tensions, with current price levels sufficient to meet revised storage targets [11] - The **global commodity market open interest** has stabilized at recent highs, but contract-based flows have declined by **20%** week-over-week [12] This summary encapsulates the key points discussed in the conference call, providing insights into the current state and future outlook of the global commodities market.

Asia Pacific Equity Research 01 July 2025 China SMid Insurance Key investor feedback post the initiation; ZhongAn remains top investor focus See page 4 for analyst certification and important disclosures, including non-US analyst disclosures. 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 objectivity of this report. Investors should consider this report as onl ...