China Industrials 26 December 2024 ab 23 Foreign Bank. UBS Asesores is registered under number 30060-001-(14115)-21/06/2016 and subject to the supervision of the Mexican Banking and Securities Commission ("CNBV") exclusively regarding the rendering of (i) portfolio management services, (ii) securities investment advisory services, analysis and issuance of individual investment recommendations, and (iii) anti-money laundering and terrorism financing matters. This UBS publication or any material related there ...

Equity Research Report China Strategy Tracker Equity Strategy China ◆ Most economic indicators missed in November, indicating that the economy is still not out of the woods ◆ More proactive policy support is in the pipeline ◆ The 10Y CGB yield has fallen to a record low of 1.70%; recovering house prices in first-tier cities a positive signal * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/ qualified pursuant to FINRA regulations. Issuer of report: HSBC Qianhai Securities ...

Industry and Company Key Points **1. Information Services Sector**: * The Information Services sector saw an average increase of +1% this week and +11% YTD. * Top movers included MCO (+3%), SPGI (+3%), CSGP (+2%), CLVT (+2%), and FDS (+2%). * Investors had mixed views on credit bureaus, with slightly negative feedback on EFX and TRU and more positive feedback on EXPN. * FactSet consensus estimates for 2025 mortgage revenue and EBITDA margin at EFX and TRU were considered overly elevated. **2. CoStar Group (CSGP, Buy)**: * Homes.com online traffic accelerated in y/y growth over the past three months, surpassing traffic growth at Zillow. * CSGP's residential revenue is expected to increase from $46mn in 2023 to $300mn+ by 2026, representing an 85%+ 3-year CAGR. * CSGP's residential business is expected to drive robust earnings growth and valuation upside, with EBITDA margins expanding from 8% in 2024 to 27% in 2026 and 40% over the medium-term. **3. Bright Horizons Family Solutions (BFAM, Buy)**: * Kastle swipe data shows an ongoing recovery in return-to-office, which is positive for BFAM's child care center occupancy rates. * BFAM's child care center occupancy rates are expected to increase from low-60s in 2024 to ~65% in 2025 and ~70% in 2026. * BFAM's NTM P/E multiple of 27x based on FactSet consensus compares favorably to the 10-year average of 34x. **4. KinderCare (KLC, Buy)**: * Kastle swipe data shows an ongoing recovery in return-to-office, which is positive for KLC's child care center occupancy rates. * KLC's child care center occupancy rates are expected to increase from 69% in 2024 to ~70% in 2025 and ~71% in 2026. * KLC's valuation upside is leveraged to its differentiated focus on community-based centers and targeting of customers across all income demographics. **5. Robert Half (RHI)**: * Investors expressed cautious sentiment on RHI due to risks from AI and the impact on revenue. * There is a high probability that RHI will not achieve FactSet consensus EPS expectations of $4/shr by 2026. **6. Korn Ferry (KFY)**: * Investors expressed positive sentiment on KFY, given its insulation from AI risks with its focus on recruiting for executive roles. * KFY's 8% sell-off in response to F2Q earnings earlier this month presents an attractive buying opportunity. **7. Staffing Industry**: * The Staffing industry saw an average increase of +1% this week and +13% YTD. * Top movers included NATL (+10%), BV (+3%), KFY (+3%), BFAM (+2%), and VSTS (-4%). * Staffing revenue demonstrated signs of stability, including positive growth in exec search and narrowing y/y declines in RPO and professional search & interim. **8. Business Services**: * The Business Services sector saw an average increase of +1% this week and +13% YTD. * Top movers included NATL (+10%), BV (+3%), KFY (+3%), BFAM (+2%), and VSTS (-4%). * Investors had negative feedback on RHI and positive feedback on KFY. **9. Diversified Business Services**: * The Diversified Business Services sector saw an average increase of +1% this week and +13% YTD. * Top movers included NATL (+10%), BV (+3%), KFY (+3%), BFAM (+2%), and VSTS (-4%). * Investors had negative feedback on RHI and positive feedback on KFY. **10. Macro Developments**: * The Consumer Confidence Index decreased to 104.7 in December from 112.8 in November. * Initial jobless claims decreased to 219k for the week ending 12/21 from 220k the prior week. * The tightening labor market is incrementally positive for temp staffers MAN and RHI.

Kweichow Moutai (600519.SS): Distributor conference: 2024 goals achieved; Modestly increasing Feitian wholesaler quota for 2025; Buy Leaf Liu +852-3966-4169 | leaf.liu@gs.com Goldman Sachs (Asia) L.L.C. Hongda Zhong +852-2978-2300 | hongda.zhong@gs.com Goldman Sachs (Asia) L.L.C. Christina Liu +852-2978-6983 | christina.liu@gs.com Goldman Sachs (Asia) L.L.C. Julia Mu +852-2978-1219 | julia.mu@gs.com Goldman Sachs (Asia) L.L.C. Valerie Zhou +852-2978-0820 | valerie.zhou@gs.com Goldman Sachs (Asia) L.L.C. n S ...

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Figure 41: MP Days to Cover vs Share Price 10 12 14 16 18 20 22 24 3.0 5.0 7.0 9.0 11.0 13.0 15.0 Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 MP Days to cover - last = 5.3 1yr Avg. = 8.2 Share Px ($/sh - RHS) Source: Bloomberg Finance L.P. | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |----------------------------------|------------------|-----------------------|----------|-------|------------|--------------------------------|--------|----------------|--------|-------------- ...

Company and Industry Overview * **Company**: NIO Inc. (NIO/9866.HK) * **Industry**: Electric Vehicle (EV) and New Energy Vehicle (NEV) industry in China * **Research Firm**: Goldman Sachs Global Investment Research Key Points and Arguments * **New Product Cycle**: NIO is entering a new product cycle in 2025E-26E with the launch of two new Onvo models and facelift versions of existing NIO models. * **Volume Targets**: Management is confident of achieving 30k units of delivery in Dec 2024, with a target of 100% yoy volume growth in 2025E driven by Onvo and NIO facelift models. * **Operational Efficiency**: The company aims to improve operational efficiency and ensure smooth production and delivery of upcoming new models, learning from the lower-than-expected sales performance of NT2.0 products. * **Market Competition**: Management believes the Chinese passenger vehicle industry will remain fragmented, especially in the premium segment, due to diverse consumer needs and a large market size. * **Battery Swapping Stations**: NIO plans to expand its battery swapping network, aiming to have 3,000 stations by end-2024, up from 2,800 as of Dec 16, 2024. * **Financial Performance**: Management expects sequentially improving vehicle gross margin in 4Q24, with close to 15% for the Nio brand and approx. 5% for the Onvo brand. * **Rating**: Goldman Sachs has a Sell rating on NIO with a 12m DCF-based (WACC 11.8%, TGR 3.5%) target price of US$3.9/HK$30 on the ADR/H share. Additional Important Content * **Onvo Brand**: The Onvo brand will launch a 6/7-seat SUV benchmarking Li Auto L8 in 2H25E, followed by a 5-seat SUV benchmarking Li Auto L7. * **Firefly Brand**: The Firefly brand, focused on the small-size vehicle market, started presales of the firefly model at Rmb148.8k on Dec 21, 2024. * **ADAS**: NIO's ADAS team announced a series of organizational adjustment plans, with Mr. Shaoqing Ren leading the large model department to accelerate the delivery pace of the "end-to-end" model. * **M&A Rank**: NIO has a M&A rank of 3, indicating a low probability (0%-15%) of being acquired. * **Investment Thesis**: Goldman Sachs expects lukewarm order momentum, slow production ramp-up, and intensifying price competition to be downside catalysts for NIO's stock price.

Disclosure Appendix The Goldman Sachs Factor Profile provides investment context for a stock by comparing key attributes to the market (i.e. our coverage universe) and its sector peers. The four key attributes depicted are: Growth, Financial Returns, Multiple (e.g. valuation) and Integrated (a composite of Growth, Financial Returns and Multiple). Growth, Financial Returns and Multiple are calculated by using normalized ranks for specific metrics for each stock. The normalized ranks for the metrics are then ...

Key Points Industry or Company Involved - **Municipal bond funds** in the United States Core Views and Arguments - **Net outflows** from municipal bond funds for the third consecutive week, totaling $878 million for the week ending December 25, 2024. - **Outflows driven by open-end funds** (-$1.0 billion), with significant outflows across Investment Grade (-$465 million), High Yield (-$414 million), and Long Duration (Long Term funds lost $747 million). - **ETFs posted modest inflows** of $160 million. - **Duration** was a key factor, with Long Term funds seeing the majority of outflows. - **Credit quality** also played a role, with Investment Grade funds experiencing the largest outflows. - **State-focused funds** saw negative flows, particularly in New York and California. Other Important Content - **YTD inflows** are now tracking slightly lower at +$40.5 billion (+$26.6 billion open-end funds/+$13.9 billion ETFs). - **HY municipal funds** have attracted 13% of their aggregate assets under management (AUM) from the beginning of the year, compared to just 3% for IG fund inflows relative to their AUM at the year's start. - **Market valuations** are calculated as the difference between the change in reported AUM and the week's reported fund flows. - **LSEG Lipper Global Fund Flows** data is used for analysis. References - [15] - [19] - [26] - [27] - [32]

As of December 27, the total market cap of the nine companies we cover was down 0.4% from end-November. Their market cap decline is halting in absolute value terms, but they underperformed TOPIX by 4.9ppt. We believe uncertainty over the 2025 business environment is holding sector companies back. Meanwhile, the most recent data point of note is that exports of both cosmetics and sanitary products rose markedly in November. In particular, hygiene product exports to China rose strongly YoY for the second mont ...