Equity and Derivatives Strategy Macro Note January 12, 2025 Julian Emanuel 212 446 9481 julian.emanuel@evercoreisi.com Source: Evercore ISI Research Three-peat: The S&P 500 rises more than 20% for a third consecutive year Michael Chu, CFA, CMT 212 446 9498 michael.chu@evercoreisi.com Barak Hurvitz, CFA 212 653 9036 barak.hurvitz@evercoreisi.com Steven Fandozzi 646 709 8498 steven.fandozzi@evercoreisi.com What Could Surprise In 2025 What Could Surprise in 2025 In a word, Everything. Donald Trump will be Inau ...

Summary of Sunny Optical Conference Call Company Overview - **Company**: Sunny Optical (2382.HK) - **Industry**: Greater China Technology Hardware - **Market Cap**: RMB 64,507 million - **Stock Rating**: Overweight - **Price Target**: HK$72.00, with a 15% upside from the current price of HK$62.70 as of January 10, 2025 Key Takeaways - **Handset CCM Shipments**: Experienced a strong month-over-month (MoM) recovery in December 2024, indicating potential for new orders in 2025 to maintain industry leadership [1] - **Segment Performance**: - Handset lens growth was slightly above target - Vehicle lens growth was within the target range [1] Shipment Data - **Handset CCM Shipments**: - January 2023: 40,720 k units, YoY -19% - December 2023: 47,089 k units, YoY -9% - January 2024: 62,256 k units, YoY +32% [2][10] - **Handset Lens Shipments**: - January 2023: 66,673 k units, YoY -49% - December 2023: 106,916 k units, YoY -9% - January 2024: 103,237 k units, YoY -3% [2][10] - **Vehicle Lens Shipments**: - Growth of 13% in 2024, within the target range of 10-15% [10] Financial Metrics - **Revenue Projections**: - FY23: RMB 31,681 million - FY24e: RMB 36,300 million - FY25e: RMB 40,514 million [7] - **Earnings Per Share (EPS)**: - FY23: RMB 0.99 - FY24e: RMB 2.39 - FY25e: RMB 2.75 [7] - **Valuation**: - P/E ratios projected to decrease from 65.3 in FY23 to 19.4 in FY26 [7] Risks and Opportunities - **Upside Risks**: - Improvement in handset lens gross margin due to larger scale - Faster-than-expected growth in vehicle lens/module - Gaining market share with new international clients [18] - **Downside Risks**: - Component shortages affecting gross margin and supply - Increased competition in the CCM market leading to potential oversupply - Weaker-than-expected demand for handset lenses [18] Conclusion Sunny Optical is positioned for growth in 2025, with a strong recovery in handset CCM shipments and solid performance in both handset and vehicle lens segments. The company aims to secure new orders to sustain its market leadership, while also navigating potential risks associated with competition and supply chain challenges.

Summary of Taiwan ODMs Conference Call Industry Overview - The conference call focused on the Taiwan ODMs/OEMs sector, particularly in the PC and server markets, highlighting revenue performance and future expectations for 4Q24 and 1Q25 [2][5]. Key Points PC Market Insights - **4Q24 Performance**: Taiwan ODMs reported better-than-expected server revenue but mixed results in PC revenue. PC brand revenue fell short of market expectations due to weak end demand [2][5]. - **1Q25 Outlook**: The notebook ODM build is expected to be slightly above seasonal trends with a forecasted decline of 12% QoQ. However, PC brands anticipate YoY growth driven by a new product cycle [2][5]. - **Shipments**: 4Q24 shipments for motherboards and VGA were in line with estimates, with expectations for a strong sequential uptick in VGA shipments in 1H25 due to Nvidia's RTX50 series [2][5]. Server Market Insights - **General Server Demand**: There was resilient demand for general servers, with AWS AI ASIC revenue increasing in 4Q24. However, the transition to Blackwell servers negatively impacted GPU server ODM/OEM revenues [2][5]. - **Revenue Expectations**: Wiwynn is favored for its continued ASIC project ramp-up and potential GPU earnings contribution. Quanta and Hon Hai are preferred for their strong positioning in future-generation Nvidia AI servers [2][5]. Company-Specific Performance - **iPhone Revenue**: iPhone revenue was weaker than expected, particularly for non-Pro models, indicating sluggish demand [2][5]. - **Company Preferences**: For non-server segments, ASUSTek and Lenovo are preferred due to new gaming product cycles and anticipated PC recovery. ASMedia and Realtek are expected to benefit from above-seasonal PC semiconductors momentum in 1Q25 [2][5]. Financial Data Highlights - **PC Brands Performance**: - Asus: 4Q24 revenue down 10% QoQ, up 25% YoY - Acer: 4Q24 revenue down 9% QoQ, up 5% YoY - MSI: 4Q24 revenue down 1% QoQ, up 5% YoY - Gigabyte: 4Q24 revenue down 7% QoQ, up 44% YoY [7]. - **Notebook ODMs Performance**: - Wistron: 4Q24 revenue up 9% QoQ, up 29% YoY - Compal: 4Q24 revenue down 6% QoQ, down 5% YoY - Inventec: 4Q24 revenue up 21% QoQ, up 54% YoY [7]. Future Guidance - **1Q25 Guidance Changes**: - Wistron: <10% QoQ decline (previously teens % decline) - Compal: <10% QoQ decline (previously likely above seasonal trend) - Inventec: ~20% QoQ decline (previously double-digit decline) - Pegatron: Down teens % QoQ (previously single-digit decline) [11]. Additional Insights - **Gaming Cycle**: The launch of Nvidia's RTX series is expected to drive motherboard and VGA sales momentum in 1H25, with ASUSTek and MSI projected to grow revenues by 16% and 18% YoY, respectively [10]. - **iPhone EMS**: Seasonal declines are expected in 1Q25, but a new SE model launch is anticipated [10]. Conclusion The Taiwan ODMs sector is experiencing mixed results with a cautious outlook for 1Q25, particularly in the PC market. However, there are positive signals in the server segment and potential growth driven by new product cycles in gaming and AI servers.

Summary of Shenzhen Goodix Technology Co Ltd Conference Call Company Overview - **Company**: Shenzhen Goodix Technology Co Ltd (603160.SS) - **Industry**: Greater China Technology Semiconductors - **Current Price**: Rmb75.39 (as of January 9, 2025) - **Market Cap**: Rmb34,358 million - **Price Target**: Raised from Rmb62.00 to Rmb81.00 Key Points Industry and Market Dynamics - **Smartphone Market Recovery**: The smartphone inventory de-stocking has shifted to re-stocking in 2024, indicating a market recovery. Consumption subsidies for smartphones will be extended nationwide in 2025, which is expected to positively impact smartphone OEMs and supply chain companies [2][11]. - **Ultrasonic Fingerprint Adoption**: The adoption of ultrasonic fingerprint technology is anticipated to increase, particularly with the rise of flexible OLED displays. The price of ultrasonic fingerprint sensors has decreased to US$2-3 from US$10, making it more competitive against optical fingerprint sensors priced around US$1. Expected adoption rates are ~8% in 2025 and ~12% in 2026, potentially generating Rmb408 million and Rmb768 million in revenue for Goodix in those years, respectively [3][19]. Product Development and Revenue Growth - **Light Sensor Market**: Light sensors are rapidly growing, with a total addressable market (TAM) of around US$1 billion in 2022, projected to grow at an 8% CAGR from 2022 to 2026. Goodix aims to capture market share among Chinese smartphone OEMs due to its high-precision and compact light sensor technology [4][20][21]. - **New Product Lines**: Goodix has started shipments of NFC+eSE security chips and has made progress with healthcare sensor chips. These developments are expected to contribute to revenue growth [5]. Financial Performance and Projections - **Earnings Growth**: Goodix is expected to achieve a 17.8% earnings CAGR from 2024E to 2027E. The company’s EPS is projected to rise from Rmb0.36 in 2023 to Rmb1.72 in 2026 [5][31]. - **Revenue Estimates**: Projected revenues are Rmb4,408 million for 2023, Rmb4,339 million for 2024E, Rmb5,093 million for 2025E, and Rmb6,024 million for 2026E [53]. Valuation and Investment Thesis - **Valuation Metrics**: The new price target of Rmb81 implies a 2025e P/E of 55.0x, aligning with the company's historical average. The valuation reflects higher earnings estimates driven by ultrasonic fingerprint and light sensor contributions [25][34]. - **Investment Risks**: Potential risks include slower adoption of ultrasonic fingerprint solutions, geopolitical tensions affecting Huawei smartphone shipments, and aggressive pricing competition in the fingerprint sensor market [30][42]. Conclusion - **Outlook**: The overall outlook for Shenzhen Goodix Technology Co Ltd is cautiously optimistic, with expectations of recovery in the smartphone market and growth in new product lines. The company is positioned to benefit from technological advancements and market trends, although it faces certain risks that could impact its performance [42][25].

Analog Devices (ADI, Buy) Toshiya Hari +1(646)446-1759 | toshiya.hari@gs.com Goldman Sachs & Co. LLC Anmol Makkar +1(212)357-1366 | anmol.makkar@gs.com Goldman Sachs & Co. LLC Chris Kress +1(212)902-6696 | chris.kress@gs.com Goldman Sachs & Co. LLC 10 January 2025 | 12:00AM EST Americas Technology: Semiconductors CES 2025 Takeaways; AI optimism offset by non-AI caution We hosted group meetings with management/IR teams from Analog Devices, Credo Technology, Lam Research, Marvell, Micron, Nvidia, ON and Skywo ...

Summary of J.P. Morgan's 2025 Internet Sector Survey Industry Overview - **Industry**: Internet Sector - **Date**: January 12, 2025 - **Survey Participants**: Nearly 100 investors Key Findings Market Performance Expectations - **US Internet Sector**: ~79% of respondents expect market-cap weighted Internets to rise more than 5% in 2025, with 38% anticipating increases of 15% or more [2][5] - **S&P 500**: Only ~66% expect the S&P 500 to increase by more than 5% [2][5] Economic Outlook - **Recession Probability**: ~76% of respondents believe there is a 25% or less chance of a recession in 2025 or the first half of 2026 [2][5] Tailwinds for the Internet Sector 1. **Advances in Technology & Innovation/New Products**: 17% [7][25] 2. **Return on AI Investments**: 14% [7][25] 3. **Upward Earnings Revisions**: 13% [7][25] Headwinds for the Internet Sector 1. **Lack of AI Monetization**: 19% [7][30] 2. **Heavy Capex/Margin Compression**: 17% [7][30] 3. **Unattractive Valuation**: 17% [7][30] Generative AI Expectations - **New Applications**: 37% expect compelling new GenAI agents and applications [2][36] - **Revenue Contribution**: Only ~6% expect material revenue contributions from GenAI/LLMs [2][36] Stock Performance Predictions - **Best Performing Internet Stock**: GOOG/L is expected to be the best performer among Internet Mag 7 stocks with 43% of respondents [2][46] - **Worst Performing Internet Stock**: META is anticipated to be the worst performer with 46% of respondents [2][49] - **Best Performing Large-Cap Stock**: UBER is expected to lead with 40% [2][56] - **Best Performing Mid-Cap Stock**: RDDT is expected to lead with 22% [2][61] - **Best Performing Small-Cap Stock**: Z/ZG is expected to lead with 18% [2][67] - **Best Performing Sub-Sector**: Subscription-Based Companies (26%) and Online Ads (23%) are expected to perform best [2][77] Investor Preferences - **Rideshare/Food Delivery**: UBER is preferred by 51% of respondents [2][81] - **Online Travel**: BKNG is favored by 38% [2][81] - **Video Games**: RBLX and TTWO are both favored by 28% [2][81] Turnaround Stories - **Best Turnaround Stories**: UBER (31%), PINS (16%), and ABNB (15%) are viewed as the best turnaround stories for 2025 [2][81] Additional Insights - **Investor Composition**: 55 Long Only, 30 Hedge Fund, and 5 Others participated in the survey [2][5] - **Survey Timing**: Conducted from January 3 to January 10, 2025 [2][12] This comprehensive survey provides a positive outlook for the Internet sector in 2025, with significant expectations for growth driven by technological advancements and AI investments, despite some concerns regarding valuation and profitability.

Summary of Gaming Industry Outlook Industry Overview - The report focuses on the **Gaming Industry**, particularly the performance and recovery of gaming revenues in **Macau**, **Singapore**, and **Las Vegas** [1] Key Insights on Macau - **Macau GGR Recovery**: Expected to recover to **80%** of 2019 levels in **2025E** and **82%** in **2026E**, up from **78%** in 2024, **63%** in 2023, and **14%** in 2022 [2] - **Mass vs. VIP Performance**: Mass GGR projected to reach **115%** of 2019 levels by **2025E** and **119%** by **2026E**, while VIP GGR is expected to be **23%** in 2025E and **24%** in 2026E [2] - **Capacity Recovery**: Flight capacity has recovered to **77%** of pre-Covid levels as of November 2024, up from **53%** in 2023; ferry capacity at **71%**, up from **61%** in 2023 [2] Key Insights on Singapore - **Singapore GGR Forecast**: Expected to decline by **1%** YOY in **2025E** (at **121%** of 2019 levels) and increase by **3%** YOY in **2026E** [3] - **Historical Context**: Pre-Covid visibility on Singapore GGR was low due to declines in VIP volume and increasing regional competition [3] Key Insights on Las Vegas - **Strip Gaming Revenue Trends**: YTD through November 2024, Vegas Strip gaming revenue was down **1%** YOY, with total visitation down **2%** compared to 2019 [4] - **Passenger Capacity Growth**: Las Vegas airline passenger capacity increased by **13%** compared to 2019, indicating a potential for future revenue growth despite current declines [4] - **Revenue Composition**: Non-gaming revenues have become a significant part of profitability, accounting for over **60%** of gross revenues for major operators like Wynn and MGM [16] Revenue Performance Metrics - **Las Vegas Strip Gaming Revenue**: - 2023 revenue was **$8.9 billion**, a **7%** increase YOY, supported by record air passenger traffic [22] - Revenue excluding baccarat showed a **4%** increase YOY in 2023 [22] - **RevPAR Trends**: - RevPAR improved to **up 19%** YOY in 2023 but has decelerated to **up 1%** YOY year-to-date through November 2024 [19] Additional Observations - **Market Dynamics**: The Las Vegas market is facing tough comparisons from a record 2023, with operators like WYNN and MGM highlighting challenges in Q4 and upcoming Super Bowl comparisons [4] - **Baccarat's Role**: Baccarat remains a volatile component of gaming, representing about **21%** of total Vegas gaming revenues pre-Covid, indicating its significance in the VIP segment [24] Conclusion - The gaming industry is on a recovery path post-Covid, with varying performance across regions. Macau shows strong recovery potential, while Las Vegas faces challenges from tough comparisons and changing consumer behavior. Singapore's GGR is stabilizing but remains under pressure from competition. Non-gaming revenues are crucial for profitability, especially during economic downturns.

Summary of Key Points from the Conference Call Industry Overview - **Industry Focus**: China Materials, including sectors such as base metals, battery metals, gold, steel, coal, cement, glass, and others [1][2][3][4][5][6]. Key Insights Base Metals - **Copper**: Shanghai copper prices increased by 3.0% week-over-week (WoW) to Rmb75,530/t, with inventories down by 5.4% WoW [1][10]. - **Aluminum**: Prices rose by 0.7% WoW to Rmb19,980/t, with inventories decreasing by 5.7% WoW [1][10]. Battery Metals - **Lithium Hydroxide**: Domestic industrial-grade lithium hydroxide prices increased by 0.9% WoW to Rmb63,000/t, while battery-grade lithium hydroxide rose by 0.5% WoW to Rmb70,030/t [2][10]. - **Lithium Carbonate**: Both industrial-grade and battery-grade lithium carbonate prices increased by 1.1% WoW to Rmb72,450/t and Rmb75,700/t, respectively [2][10]. - **Shipping Disruptions**: Beira port in Mozambique faced shipping difficulties due to protests, potentially increasing production costs by Rmb2,000/t for lithium carbonate [2][34]. Gold - **Price Movement**: Gold prices rose by 1.0% WoW to US$2,667/oz, with the People's Bank of China (PBoC) increasing its gold reserves to 73.29 million ounces [3][44]. Steel - **Price Declines**: Shanghai hot-rolled coil (HRC) prices fell by 1.5% WoW to Rmb3,340/t, while cold-rolled coil (CRC) prices decreased by 0.7% WoW [4][10]. - **Inventory Trends**: Long steel inventories increased by 0.9% WoW, while flat steel inventories rose by 2.7% WoW [4][10]. Coal - **Price Stability**: Coal prices (5,500 kcal) increased slightly by 0.1% WoW to Rmb708/t, with Qinhuangdao inventory up by 5.7% WoW [5][10]. Cement - **Price Decline**: Cement prices decreased by 0.9% WoW to Rmb404/t as of January 10, 2025 [4][10]. Glass - **Price Movements**: Float glass prices increased by 2.1% WoW to Rmb1,327/m², while glass fiber prices remained flat at Rmb3,933/t [5][10]. Additional Insights - **Government Initiatives**: The National Development and Reform Commission (NDRC) and Ministry of Finance (MoF) announced the extension and widening of the goods trade-in program for 2025, which may impact consumer goods and equipment renewal [4][19]. - **Excavator Sales**: Excavator sales in China totaled 201,131 units in 2024, reflecting a 3.13% year-over-year increase, indicating potential growth in construction and infrastructure sectors [26]. Conclusion The conference call highlighted various trends across multiple sectors within the China materials industry, with notable price movements in metals, disruptions in shipping affecting lithium production, and government initiatives aimed at stimulating economic activity through trade-in programs.

12 Jan 2025 15:35:30 ET │ 61 pages China Consumer Stock-picking in 2025 CITI'S TAKE In our view, it will take time for the government's pro-consumption policies to boost growth of most China consumer companies in 25E. With low expectations on the positive impact of government policies (especially in 1H25E), we have used a thematic approach to analyze the evolved industry landscape in recent years and identify investment opportunities in 25E. Our Top Buys: Mengniu, CR Beer & Giant Bio in staples; Haier, Mide ...