Summary of Key Points from the Equity Research Report Industry Overview - The report focuses on the **China Equity Strategy** and highlights the current economic indicators and market conditions in China as of December 2024 [2][11][27]. Core Insights and Arguments 1. **Economic Indicators**: Most economic indicators missed expectations in November, indicating that the economy is still struggling. Retail sales softened to **3.0% y-o-y** (expected **5.2%**), and year-to-date FAI growth slowed to **3.3% y-o-y** [27][36]. 2. **Policy Support**: More proactive policy support is anticipated, particularly for consumption, as indicated by the language used in the December Politburo meeting [27][36]. 3. **Market Outlook**: Despite current challenges, there is a projected **12-18% upside** for the stock market due to ample liquidity and potential earnings improvement from a low base [27][36]. 4. **Bond Market Divergence**: The **10Y CGB yield** fell to a record low of **1.70%**, reflecting a divergence in economic outlook between the bond and stock markets [27][36]. 5. **Sector Performance**: Notable sector data includes a **120% y-o-y increase** in mutual fund issuance and a **143% y-o-y increase** in southbound net inflows, indicating improved market liquidity [27][36]. Additional Important Content 1. **Manufacturing and Infrastructure**: Growth in both manufacturing and infrastructure investment has decelerated, while property investment has become less of a drag, showing a decline of **-11.6% y-o-y** [21][27]. 2. **House Sales**: Monthly sales from the top 100 developers fell **6.9% y-o-y** in November, indicating a return to contractionary territory, although there was a slight pick-up in second-hand housing prices in first-tier cities (+0.4% m-o-m) [27][55]. 3. **Global Economic Context**: The US economy shows resilience, but rising unemployment and declining housing demand could pose risks. US CPI was reported at **+2.7% y-o-y** in November, indicating persistent inflation [27][36]. 4. **Sector Earnings Revisions**: Non-bank financials and banks saw the most upward earnings revisions, while real estate and conglomerates were revised down the most [34][36]. Conclusion The report provides a comprehensive overview of the current state of the Chinese economy, highlighting the challenges and potential opportunities within the market. The anticipated policy support and liquidity improvements could provide a favorable environment for investors despite the current economic struggles.

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 ...

M Update may not be suitable for all investors, and certain investors may not be eligible to purchase or participate in some or all of them. Morgan Stanley Research is not an offer to buy or sell or the solicitation of an offer to buy or sell any security/instrument or to participate in any particular trading strategy. The value of and income from your investments may vary because of changes in interest rates, foreign exchange rates, default rates, prepayment rates, securities/instruments prices, market ind ...

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.

Summary of Shennan Circuits (002916.SZ) Research Report Company Overview - **Company**: Shennan Circuits (002916.SZ) - **Industry**: Printed Circuit Board (PCB) manufacturing, focusing on high-end markets including telecom, datacom, automotive, industrials, and medical sectors Key Insights 1. **AI PCB Demand**: The demand for AI PCBs is expected to be a significant growth driver into 2025, with a projected 70% increase in 800G transceiver volume and a ramp-up in 800G switch production [10][25] 2. **Market Position**: Shennan is well-positioned to capture a substantial share of the AI demand growth due to its leading technology and available capacity, especially as competitors face tight capacity constraints [10][25] 3. **Revenue Contribution**: AI PCB is forecasted to contribute 12% of total revenue in 2025, up from 6% in 2024, and 17% of total gross profit [25] 4. **Earnings Revisions**: The 12-month target price (TP) for Shennan has been revised up to Rmb143 from Rmb135, based on a 25x 2025E P/E multiple [11][25] 5. **Financial Estimates**: Revenue estimates for 2024-2026 have been raised by up to 1.6%, while net profit estimates have increased by up to 2.5% due to favorable market conditions and currency impacts [26][28] Financial Performance - **Revenue Forecasts**: - 2024E: Rmb17,907 million - 2025E: Rmb21,118 million - 2026E: Rmb23,487 million - **Net Income Forecasts**: - 2024E: Rmb2,079 million - 2025E: Rmb2,932 million - 2026E: Rmb3,351 million - **Gross Margin**: Expected to be around 26.0% in 2024, improving to 27.0% by 2026 [28] Risks and Challenges 1. **Demand Fluctuations**: A potential decline in datacom/AI PCB demand could negatively impact revenue [14] 2. **Geopolitical Risks**: Disruptions in the supply chain or operations of customers due to geopolitical tensions could pose significant risks [14] 3. **Competitive Pressure**: Increased competition may lead to pricing pressures and potential loss of market share [14] 4. **5G Demand**: Further deterioration in 5G demand could adversely affect the company's performance [14] Conclusion - **Investment Rating**: The company is rated as a "Buy" due to its strong positioning in the AI PCB market and expected robust growth in revenue and net profit driven by domestic infrastructure investments in China [25][28] - **Valuation**: Current valuation is considered attractive as it trades at a discount to historical averages, providing a favorable investment opportunity [28]

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]

Summary of the Conference Call Transcript Industry Overview - The report covers the **cosmetics and sanitary products** industry in Japan, focusing on nine companies within this sector [1][33]. Key Points and Arguments - As of December 27, the total market capitalization of the nine companies decreased by **0.4%** from the end of November, underperforming the TOPIX by **4.9 percentage points** [1]. - Uncertainty regarding the **2025 business environment** is identified as a significant factor hindering sector companies [1]. - Notable growth in exports was observed in November, particularly for **cosmetics** and **sanitary products**. Hygiene product exports to China showed a strong year-over-year increase for the second consecutive month [1][33]. - The focus moving forward will be on **sustainability** within the industry [1]. - Despite the growth in exports, there is a cautious investment stance towards the cosmetics sector due to concerns about intensifying domestic market competition [1]. Export and Import Trends - **Cosmetics Exports**: - November saw a **4% year-over-year increase** in cosmetics export value, with skincare exports rising by **8%** and makeup exports declining by **19%** [33]. - Exports to China decreased by **4%**, while exports to South Korea surged by **75%** [33]. - Japan's cosmetics imports increased by **21%** year-over-year in November [33]. - **Sanitary Products Exports**: - November exports of sanitary products grew by **15% year-over-year**, with exports to China rising by **79%** [33]. - Domestic production of disposable diapers showed mixed results, with adult incontinence products increasing by **4%** and infant diapers decreasing by **9%** [33]. Price Trends - The average export unit price for sanitary products rose by **22% month-over-month** to **¥13.3/kg** in November [33]. - The corporate goods price index (CGPI) for cosmetics fell by **0.8% month-over-month** [33]. - Raw material prices for disposable diaper materials showed slight increases, with polypropylene spunbond nonwoven fabric rising by **0.7% month-over-month** [33]. Additional Insights - The report highlights the importance of monitoring **sustainability** trends in the cosmetics and sanitary products sector as a potential driver for future growth [1]. - The competitive landscape in the domestic market is a critical concern, suggesting that companies may need to innovate or differentiate to maintain market share [1]. This summary encapsulates the essential insights from the conference call, focusing on the current state and future outlook of the cosmetics and sanitary products industry in Japan.

Summary of Montage (688008.SS) Conference Call Company Overview - **Company**: Montage (688008.SS) - **Industry**: Technology, specifically semiconductor manufacturing Key Points and Arguments DDR5 Penetration and Product Development - The DDR5 penetration rate exceeded 50% in Q3 2024, with a target of over 60% by the end of 2024 [11] - Montage began shipping gen-2 DDR5 products in the second half of 2024, with gen-3 products starting small-batch shipments and qualification [11] - The company is optimistic about its early development of DDR5 interface ICs compared to peers, which began shipments later [11] Earnings Forecast Revision - Montage revised its earnings forecasts upward by 2% for both 2025 and 2026, driven by AI investments in Shanghai, leading to increased revenues from DDR5 interface ICs and a lower operating expense ratio [12] Revenue Growth Expectations - Anticipated strong revenue growth of 60% year-over-year in Q4 2024, supported by rising DDR5 penetration and ramp-up of gen-3 DDR5 product shipments [20] - New products, including PCIe-retimer, MRCD/MDB, and CKD chipsets, are expected to contribute significantly to revenue starting in 2025 [20][21] Valuation and Price Target - Montage is rated as a "Buy" with a revised 12-month target price of Rmb94, up from Rmb82.5, based on a target P/E of 42.5x for 2025 [23] - The target P/E reflects a positive outlook on semiconductor spending related to AI and is considered undervalued compared to historical averages [23][45] Risks and Challenges - Key downside risks include weaker-than-expected growth in the memory interface IC market, slower DDR5 adoption, and increased competition [25] Financial Performance Metrics - Revenue projections for 2025 are Rmb6,298 million, with net income expected to reach Rmb2,530 million [41] - The gross margin is projected to be around 58.5% for 2025, with an operating margin of 40% [41] Market Context - The Shanghai government's supportive AI policy is expected to positively impact Montage as a supplier of AI interface chips [20] - Montage's market capitalization is approximately Rmb91.4 billion (around $12.5 billion) [47] Additional Important Information - Montage's earnings and revenue growth are closely tied to advancements in AI and semiconductor technology, particularly in the DDR5 segment [20][23] - The company is actively working on new product lines that are expected to drive future growth and revenue diversification [21] This summary encapsulates the critical insights from the conference call regarding Montage's strategic direction, financial outlook, and market positioning within the semiconductor industry.