12 January 2025 | 6:19PM JST Japan Market Monitor: Re-balancing sector and thematic indices In this week's Japan Market Monitor, we discuss the re-balancing of our Japan Market Monitor indices. Over the end-of-year break, we have re-balanced our equal-weighted sector and thematic indices, and also added 2 new thematic indices: 1) AI Beneficiaries; and 2) Defense. Due to 6M adtvs falling below our US$20mn threshold for some names since the last re-balance, we have removed 30 stocks from our universe (Exhibit ...

Asia Pacific Equity Research 12 January 2025 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. Zijin - A/H Zijin in talks to buy controlling stake in Zangge Mining Zijin-A/H were up 1% and 3% respectively (vs. HSCEI -1%) on January 10. We believe the outperfor ...

Industry Overview * **Leisure Travel Leading Recovery**: Leisure travel has been the primary driver of the lodging recovery, with RevPAR ending 2023 up +5% YOY or +14% vs. 2019. Business transient and group travel have recovered more slowly. * **Supply Growth Below Average**: Construction starts remain below peak levels, leading to lower supply growth in the future. Industry estimates for supply growth over the next few years are lower than historical levels, with 2024E and 2025E growth expected at +1.3% and +1.5% respectively, compared to the long-term average of ~2%. * **Luxury Segment Underperforming**: Luxury RevPAR growth has been below average industry growth in recent years, potentially indicating a late stage in the lodging cycle. * **Top 25 Markets Driving Growth**: Future supply growth is concentrated in the top 25 markets, which have outperformed the US average in RevPAR growth historically. Company Analysis * **Hilton Worldwide Holdings, Inc. (HLT)**: * **Buy Rating**: UBS maintains a Buy rating on HLT, with a price target of $274. * **Unit Growth**: HLT is expected to show acceleration in unit growth in 2025, excluding acquisitions. * **Pipeline**: HLT's pipeline to existing footprint ratio is higher than Marriott's, indicating a potential gain in market share. * **Marriott International, Inc. (MAR)**: * **Neutral Rating**: UBS maintains a Neutral rating on MAR, with a price target of $294. * **Unit Growth**: Marriott's unit growth needs to accelerate to reach long-term 2025 targets. * **Pipeline**: Marriott has a larger share of the US hotel room pipeline but has a lower pipeline to existing footprint ratio compared to HLT. * **Host Hotels & Resorts Inc. (HST)**: * **Neutral Rating**: UBS maintains a Neutral rating on HST, with a price target of $19. * **Portfolio**: HST owns a portfolio of high-quality hotels with significant barriers to entry and limited supply growth. * **Transactions**: HST has been active in the transaction market, with a strong investment grade balance sheet and undrawn liquidity. * **Choice Hotels International, Inc. (CHH)**: * **Neutral Rating**: UBS maintains a Neutral rating on CHH, with a price target of $154. * **Business Model**: CHH operates a pure-play franchise model, providing a less volatile earnings stream. * **Acquisition**: CHH acquired the Radisson Hotel Group Americas, increasing its upscale and upper midscale exposure. * **Park Hotels & Resorts (PK)**: * **Neutral Rating**: UBS maintains a Neutral rating on PK, with a price target of $15. * **REIT**: PK is the second-largest lodging REIT, with a high concentration in the luxury and upper upscale segments. * **Management Contracts**: PK's management fees are structured in an atypical way, potentially benefiting the company early in a cycle. Conclusion The lodging industry is recovering from the impact of the pandemic, with leisure travel leading the recovery. Supply growth remains below average, and the luxury segment is underperforming. UBS maintains a Buy rating on HLT and a Neutral rating on MAR, HST, CHH, and PK, based on their respective strengths and market positions.

Global Markets Strategy 12 January 2025 China Equity Strategy Assessing DoD list consequences & possible index reversal This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. Last week, renewed fears over US-China risks (Tencent and CATL were included into the US D ...

Industry/Company * **Industry**: Online gaming and entertainment * **Company**: NetEase, Inc. (NTES.O, NTES US) Key Points * **Marvel Rivals Season 1 Success**: The first season of Marvel Rivals, a new game launched by NetEase, has been a major success. The peak number of players reached over 644k on Steam, a new high and 35% more than the debut level. The game has topped Steam's global best-seller rankings and received positive feedback from players. * **Milestone for NetEase**: This success marks a significant milestone for NetEase's overseas expansion strategy, as it demonstrates the company's ability to develop and launch successful games for foreign players. * **Revenue Contribution**: The strong performance of Marvel Rivals suggests that it will contribute more than the current forecast of Rmb3.5bn annually to NetEase's revenue. * **Importance of Marvel Rivals**: Marvel Rivals is considered more important than another new title, Where Winds Meet, in terms of contributing to NetEase's 2025 growth. * **Upcoming Releases**: NetEase has a strong pipeline of upcoming games, including FragPunk, which is expected to be an important title for its overseas expansion. Additional Information * **Revenue Sharing Agreement**: NetEase's revenue-sharing agreement with Marvel may limit its profit margins from Marvel Rivals. * **Valuation**: NetEase is currently valued at 13.5x 2025e P/E, compared to 15-30x for US/EU publishers. * **Risks**: Risks to upside include slower growth, limited overseas exposure, and weaker-than-expected margins.

Key Points Company and Industry Information 1. **Company**: Editas Medicine, Inc. (NASDAQ:EDIT) 2. **Industry**: Biotechnology, Gene Editing 3. **Event**: 43rd Annual JPMorgan Healthcare Conference Call 4. **Date**: January 15, 2025 5. **Time**: 2:15 PM ET 6. **Participants**: - Gilmore O'Neill - President and Chief Executive Officer - Linda Burkly - Executive Vice President and Chief Scientific Officer - Erick Lucera - Executive Vice President and Chief Financial Officer - Brian Cheng - JPMorgan Senior Biotech Analyst - Miriam Yurco - Associate, JPMorgan [1] Core Views and Arguments 1. **Progress and Vision**: Editas Medicine aims to become a leader in vivo gene editing. 2. **New Data Release**: The company has released exciting new data this week. 3. **Future Plans**: Editas Medicine will discuss its plans for the current year and the next couple of years. [2] Forward-Looking Statements 1. **Risk Disclosure**: Gilmore O'Neill emphasizes the importance of reading the company's disclosure and filings for a full understanding of potential risks. [3] Additional Important Information 1. **Historical Reference**: O'Neill mentions an announcement made two years ago at the same conference. [3]

Key Points Company and Industry 1. **Company**: Intuitive Surgical, Inc. (NASDAQ: ISRG) 2. **Industry**: Medical technology (med-tech) 3. **Event**: 43rd Annual J.P. Morgan Healthcare Conference Call 4. **Date**: January 15, 2025 5. **Time**: 12:00 PM ET Core Views and Arguments 1. **Motivation**: Intuitive Surgical views itself as a solutions provider in healthcare. 2. **Statistics**: Lung cancer is the largest cancer killer in the United States, with a delay of about a year in definitive detection and assessment compared to early detection. 3. **Statistics**: Women typically suffer from endometriosis symptoms for more than five years before it is definitively defined and even longer before treatment. Additional Important Content 1. **Forward-looking statements**: Intuitive Surgical encourages participants to refer to their SEC filings on the Investor page of their website for forward-looking comments. 2. **Gary Guthart's role**: CEO of Intuitive Surgical 3. **Jamie Samath's role**: Executive Vice President & Chief Financial Officer of Intuitive Surgical

Key Points Company and Industry 1. **Company**: AbbVie Inc. (NYSE: ABBV) 2. **Event**: J.P. Morgan 43rd Annual Healthcare Conference 3. **Date**: January 15, 2025 4. **Time**: 11:15 AM ET 5. **Participants**: - Rob Michael - CEO - Scott Reents - Executive Vice President, CFO - Jeff Stewart - Executive Vice President, Chief Commercial Officer - Roopal Thakkar - Executive Vice President, Research & Development, Chief Scientific Officer - Chris Schott - J.P. Morgan [1] Core Views and Arguments 1. **CEO Rob Michael's Performance**: Rob Michael expresses satisfaction with the company's performance, noting that they are beating their top line by $1.8 billion and earnings are well ahead of expectations. 2. **Focus on Growth Platform**: Michael emphasizes the importance of executing the growth platform effectively, which he believes will provide a clear runway for growth for at least the next 8 years. 3. **Pipeline Expansion**: Michael also highlights the need to add to the pipeline to ensure sustained growth beyond the current period. [3][4] Other Important Points 1. **Investor Perception**: Michael acknowledges that investors may not fully appreciate the company's clear runway for growth over the next 8 years. 2. **Management Team**: The conference call features a broad swath of AbbVie's management team, indicating a collaborative approach to the company's strategy and execution. [3][4]

The Wall Street Journal (WSJ) is a leading global business publication, providing comprehensive coverage of financial news, market analysis, and business trends. Here's a summary of key topics from the January 15, 2025, issue: **Business & Finance**: * **SEC Sues Musk**: The Securities and Exchange Commission (SEC) filed a lawsuit against Elon Musk, accusing him of misleading shareholders about his purchases of Twitter stock. This escalates the agency's ongoing feud with the billionaire. * **China Explores Sale of TikTok in U.S. to Musk**: Chinese officials are considering allowing a trusted non-Chinese party, such as Elon Musk, to invest in or take control of TikTok's U.S. operations to avert a U.S. ban. * **China Reins In Bankers**: Chinese leader Xi Jinping is cracking down on the financial sector, implementing measures to curb capitalist excess and bring the industry more under state control. * **Meta to Eliminate 5% of Its Workers**: Meta Platforms, the parent company of Facebook and Instagram, announced plans to cut 5% of its workforce as part of a cost-cutting initiative. * **JPMorgan Chase Names Jennifer Piepszak as New COO**: The bank appointed Jennifer Piepszak as its new Chief Operating Officer, while Daniel Pinto, Jamie Dimon's top ally, plans to retire. * **BlackRock Executive Mark Wiedman to Leave**: One of the top candidates to succeed BlackRock CEO Larry Fink, Mark Wiedman, announced his departure from the world's largest asset manager. **World News**: * **U.S. to Remove Cuba From Terror-Sponsor List**: The Biden administration announced plans to remove Cuba from the U.S. list of state sponsors of terrorism as part of a deal to free political prisoners on the island. * **South Korea Leader Arrested in Standoff**: South Korean authorities arrested and detained impeached President Yoon Suk Yeol over his brief declaration of martial law last month. * **China's yuan tightrope**: The Chinese central bank faces a dilemma as the yuan comes under pressure, with economic fundamentals suggesting a weaker currency but the risk of capital outflows. * **Denmark Entertains Greenland Options**: The Danish government has signaled its willingness to negotiate military and economic deals related to Greenland with the incoming Trump administration. * **China's AI Advances**: The U.S. imposes new measures to limit China's advancements in artificial intelligence, requiring companies to get government approval to export certain information about their AI models and set up large AI computing facilities overseas. **Other Key Topics**: * **Longevity Science Is Having Its Moment**: Incoming president's picks for the country's top health jobs have ties to the antiaging field, signaling potential support for antiaging treatments and research. * **Arcade Games Are Getting a Makeover**: Arcades are adding big-ticket prizes to claw machines and gacha machines, targeting a lucrative market of "kidult" consumers. * **China's Central Bank Reiterates Easing Vow**: The People's Bank of China again pledged to help the economy grow this year, firming expectations of more monetary easing. * **SEC Proposes New Food Warning Label**: The FDA proposed a rule that would require food manufacturers to add new labels to the front of packages flagging key nutrition information on salt, added sugar, and saturated fat. * **Drug Managers Boosted Prices**: A new report by the FTC found that pharmacy-benefit managers (PBMs) hiked the prices of dozens of drugs dispensed through their own pharmacies, reaping billions in profits. The January 15, 2025, issue of the WSJ provides a comprehensive overview of the latest developments in business, finance, and global affairs, highlighting key trends and potential implications for the future.