Oil Comment: Reducing Our Price Forecast and Dropping Our Range as Downside Risks Realize Daan Struyven +1(212)357-4172 | daan.struyven@gs.com Goldman Sachs & Co. LLC Yulia Zhestkova Grigsby +1(646)446-3905 | yulia.grigsby@gs.com Goldman Sachs & Co. LLC Callum Bruce, CFA +1(212)902-3053 | callum.bruce@gs.com Goldman Sachs & Co. LLC Ephraim Sutherland +1(972)368-0395 | 3 April 2025 | 8:32PM EDT ephraim.sutherland@gs.com Goldman Sachs & Co. LLC Investors should consider this report as only a single factor in ...

4 April 2025 | 5:59PM EDT US Weekly Kickstart What to watch during the 1Q 2025 earnings season David J. Kostin +1(212)902-6781 | david.kostin@gs.com Goldman Sachs & Co. LLC Ben Snider +1(212)357-1744 | ben.snider@gs.com Goldman Sachs & Co. LLC Ryan Hammond +1(212)902-5625 | ryan.hammond@gs.com Goldman Sachs & Co. LLC Jenny Ma +1(212)357-5775 | jenny.ma@gs.com Goldman Sachs & Co. LLC Daniel Chavez +1(212)357-7657 | daniel.chavez@gs.com Goldman Sachs & Co. LLC Kartik Jayachandran +1(212)855-7744 | kartik.jaya ...

4 April 2025 | 10:51AM EDT Weekly Fund Flows How Brief is the Relief? Global fund flows, week ending April 2 | | | Global Fund Flows Summary | | | | --- | --- | --- | --- | --- | | | Millions USD | | % AUM | | | | 4wk sum | 2-Apr | 4wk avg | 2-Apr | | Equity | 33,793 | 2,143 | 0.04 | 0.01 | | Fixed Income | 25,546 | 9,932 | 0.08 | 0.12 | | of which: EM | -1,407 | 1,163 | -0.07 | 0.23 | | Money Markets | 4,821 | 22,536 | 0.01 | 0.23 | | FX Flows* | 23,204 | 11,987 | 0.05 | 0.10 | *Cross-border fund flows, ex ...

Investment Rating - The report highlights a median forward 12-month P/E of 15X for China internet companies, compared to 22X for US counterparts, indicating a potential undervaluation in the sector [2]. Core Insights - The report emphasizes a shift in focus from AI infrastructure to AI applications, with expectations for continued investor interest driven by upcoming model launches and AI agents [2][11]. - Key stock ideas are categorized by mega-cap and large/SMID companies, with notable mentions including JD at 9X 2025 P/E and PDD at 10X 2025 P/E, both identified as solid growth businesses still within 'value' territory [1][19]. - The report identifies three main investor debates: the current state of the AI trade, the focus on domestic consumption proxies, and navigating geopolitical events affecting companies like TikTok and PDD [11][12]. Summary by Sub-Sectors eCommerce - JD is expected to benefit from a government trade-in program, projecting double-digit growth for Q1 2025, while PDD is anticipated to enjoy easier comparisons later in the year [11][16]. - The competitive landscape is normalizing, with JD's unique 1P model and supply chain positioning it as a major beneficiary [17]. AI and Technology - The report notes a significant increase in AI-related capex investments among hyperscalers, with a projected 26% year-over-year growth in 2025 [16]. - The race to develop consumer-facing AI applications is ongoing, with ByteDance leading the way with 32 AI applications launched in the past year [13]. Gaming - The gaming segment is described as relatively healthy, with innovative gameplay enhancing pricing power and an increasing adoption of AI applications in game development [16]. Local Services and Mobility - Meituan is highlighted as a dominant player in food delivery, with stable EBIT margins expected in Q1 2025 [18]. - Full Truck Alliance is noted for its strong order volume growth in freight matching [18]. Data Centers and Cloud - The demand for data centers is entering a new expansion cycle, driven by AI training and public cloud client needs [19]. Advertising - The report anticipates improvements in monetization through AI-powered ad tech, with Tencent positioned favorably due to its Weixin ecosystem [19].

Investment Rating - The report maintains a Neutral rating across equity regions to maximize diversification, with an Overweight (OW) stance on bonds and an Underweight (UW) on credit [3][6]. Core Insights - The report highlights a cross-asset repricing of growth and inflation due to rising tariff risks, leading to a more defensive investment stance [1][7]. - US equity strategists have reduced their S&P 500 return forecasts to -5% for 3 months and +6% for 12 months, while European strategists have adjusted their forecasts to -6% for 3 months and +5% for 12 months [3][19]. - The average US tariff rate is expected to rise by 5 percentage points to 15%, with GDP growth revised down to 1% from 1.5% [1][2]. Summary by Sections Economic Outlook - The report indicates a mixed economic outlook with US manufacturing PMI falling to 49.8, and inflation expectations rising, leading to a revised recession probability of 35% [1][2]. - European economists have also cut growth forecasts and raised inflation expectations, anticipating an ECB cut in July [1]. Asset Allocation - The report suggests a shift to more defensive positions, recommending selective hedges due to elevated implied volatility across asset classes [3][6]. - The commodities team has raised their 2025 gold forecast to $3,300 per troy ounce, indicating a shift in diversification strategies towards gold and the Yen [2][19]. Market Performance - The report notes a decline in cross-asset pricing of growth across regions, with credit repricing growth risks more clearly [2][19]. - The Dollar has become more sensitive to the S&P 500, reducing its diversification potential, while gold and Yen have emerged as key diversifiers [2][19].

Investment Ratings - The report includes a "Buy" rating for MediaTek, CR Land, Weichai Power, and Krafton, while removing Advantest, Delta Electronics, Keppel Ltd, and Zijin Mining from the APAC Conviction List [1]. Core Insights - MediaTek is transitioning from a traditional smartphone application processor provider to an AI-focused company, with expected revenue and earnings growth of 16% and 17% CAGR from 2024 to 2027, respectively [2][24]. - CR Land is positioned for recovery in business growth and profitability, with forecasts indicating a re-acceleration in contract sales growth and market share gains [3][41]. - Weichai Power is expected to benefit from an improving outlook for heavy-duty trucks and a more profitable engine portfolio, with a forecasted 18% EPS CAGR over two years [4]. - Krafton's PUBG franchise is anticipated to drive earnings, with a focus on strong performance in upcoming results [5][9]. Summary by Company MediaTek - Positioned to transition to AI applications, with a forecasted revenue growth of 16% CAGR from 2024 to 2027, driven by market share gains and new total addressable markets (TAMs) [2][24][25]. - Expected operating margin (OpM) improvement from 19% in 2025 to 22% in 2027 [25]. - Current trading at 16x/13x FY26/27E P/E, at the mid/low-end of its historical range [26]. CR Land - Forecasts indicate contract sales growth re-acceleration and market share gains, with a projected gross profit margin recovery to 18% by 2027 [3][41]. - Expected average free cash flow (FCF) yield of 11% during 2025-2027 [3]. - Current share price implies a compelling valuation at 0.4x P/B on its development property business [3]. Weichai Power - Anticipated re-rating due to improved cyclical outlook for heavy-duty trucks and a more profitable engine portfolio [4]. - Forecasted gradual increase in dividend payout supported by strong net cash position and FCF generation [4]. - Currently trades at 10x 2025E P/E with a 6% dividend yield [4]. Krafton - Focus on the strong momentum of the PUBG franchise as a key earnings driver [5][9]. - Expected to outperform consensus estimates in upcoming earnings release [9]. - Currently trading at near-historical trough level at 12x 2025E P/E [9].

Investment Rating - The report indicates a short-term upside risk for oil prices while medium-term risks are skewed to the downside [1][3]. Core Insights - Brent prices have increased to the mid-70s per barrel due to solid spot demand and short-term supply risks from sanctions, outweighing US growth concerns [1]. - President Trump's potential imposition of secondary tariffs on Russian and Iranian oil could impact market dynamics, although the effectiveness of such measures remains uncertain [2]. - US economists have lowered the 2025 GDP growth forecast by 0.5 percentage points to 1%, raising the 12-month recession probability to 35%, which could affect global oil demand [3]. Supply and Demand Summary - Trackable net supply and demand remained flat week-over-week, with OECD commercial stocks decreasing by 2 million barrels to 2,747 million barrels [4][13]. - US Lower 48 crude production nowcast edged down by 0.1 million barrels per day to 11.3 million barrels per day, while Canada liquids production increased by 0.2 million barrels per day to 6.3 million barrels per day [13][15][18]. - Global visible stocks decreased by 5 million barrels week-over-week, indicating a tightening supply situation [4][13]. Price Dynamics - The Brent 1M/36M timespread is currently $2 per barrel below its inventory-implied fair value, suggesting potential price adjustments [4][12]. - The average crude basis has rallied by 1.2 percentage points week-over-week, indicating stronger physical demand relative to futures prices [12][43]. - Brent implied volatility remains low, standing 10 percentage points below its fair value, reflecting a stable market environment [12][49]. Geopolitical and Market Trends - Despite weak consumer sentiment, US gasoline demand remains resilient, with significant crude volumes exported from Russia primarily to India and China [8][12]. - Northwest-Europe net refining margins are above seasonal averages, boosted by strong US refining outages [12][46]. - The report highlights ongoing imperfect compliance with OPEC+ production cuts, which could influence future supply dynamics [22].

Investment Rating - The report assigns a "Buy" rating to Hesai Group, a leading LiDAR solutions provider, indicating a positive outlook for the company's stock performance [9]. Core Insights - The ADAS LiDAR industry is expected to experience high growth, driven by the acceleration of autopilot technology in the domestic market and the increasing recognition of LiDAR as a key sensor by OEMs [1][7]. - There is an anticipated stable gross margin for ADAS LiDAR products, supported by the introduction of affordable options and growing demand for ultra-high performance LiDARs as the industry moves towards L3/L4 levels [2][8]. - OEMs are likely to partner with multiple LiDAR suppliers to minimize supply chain risks, leading to a relatively stable competitive landscape dominated by top LiDAR suppliers [2][10]. Summary by Sections Industry Growth - The ADAS LiDAR industry is projected to grow significantly, with RoboSense reporting a 110% year-over-year increase in total LiDAR shipments, reaching 544k units in 2024 [1]. - Leading OEMs are targeting L3 capabilities by the end of 2025, which will increase the content value per vehicle [1][7]. Market Dynamics - The report highlights that the introduction of a US$200 priced product has made LiDAR more accessible, contributing to stable gross margins [2]. - The demand for ultra-high performance LiDARs is expected to rise as OEMs prepare for L3/L4 stages, which will also support margin stability [2][8]. Competitive Landscape - The trend of OEMs partnering with multiple LiDAR suppliers is emphasized, particularly for those with large volumes, to mitigate supply chain risks [2][10]. - The management anticipates a stable competition landscape where leading LiDAR suppliers will maintain their market dominance [2][10]. Investment Thesis - Hesai is well-positioned to benefit from the acceleration of the NEV market's navigation on autopilot (NOA) adoption starting in 2025, alongside the launch of lower-cost products [9]. - The company is entering a growth phase with its next-generation ATX product, which is expected to drive revenue growth and strong profit CAGR [9].

Investment Rating - The report assigns a "Buy" rating to Bank of China (BOC), Postal Savings Bank of China (PSBC), and China Construction Bank (CCB) with target prices of Rmb 6.73/HK$ 5.00, Rmb 6.82/HK$ 5.59, and Rmb 11.14/HK$ 7.91 respectively [24][27][28] Core Insights - Four large state-owned banks in China announced a total capital raise of Rmb 520 billion, with Rmb 500 billion from the Ministry of Finance and Rmb 20 billion from other state-owned shareholders [1] - The capital injection will increase the average shareholding of the Ministry of Finance and Central Huijin Investment by 5 percentage points to 56% [1] - The capital replenishment is expected to be completed through A-share private placements by the end of 2025 [1] Summary by Sections Capital Raise Details - The capital raise will be evenly distributed among BOC and PSBC, with each bank raising approximately Rmb 120 billion [3] - The new shares will be issued at a price below 1x book value, representing a 16% premium over recent trading prices [3] - New shares as a percentage of outstanding shares post-recapitalization for BOC and PSBC will be 8% and 17% respectively [4] Capital Adequacy - The CET1 ratio for BOC and PSBC is projected to increase by 86 basis points and 151 basis points respectively [4] - The report indicates that to maintain dividend per share (DPS) at 2024 levels, dividend payout ratios would need to rise to 31-36% [5] Growth Projections - The announced capital raise, along with increased dividend payouts, would allow for a 7.9-9.3% growth in risk-weighted assets (RWA) assuming unchanged density [5] - The report anticipates a downward trend in RWA density, which would enable more asset growth without proportionally higher capital consumption [15] Comparative Analysis - The report notes that Agricultural Bank of China (ABC) and Industrial and Commercial Bank of China (ICBC) were excluded from the announced capital injections, with estimates suggesting they may require Rmb 150 billion each for capital support [18][19] - The average CET1 ratio increase for participating banks is expected to be 1.03 percentage points [21]

Investment Rating - The report maintains a "Buy" rating for several companies including Tencent, Xiaomi, PDD, JD, NetEase, YMM, TAL, TCOM, BYD, AMEC, Concordia, GDS, and Kuaishou [1][5][8][9][10][12]. Core Insights - The report emphasizes a shift in focus from AI infrastructure to AI applications, highlighting key stock ideas around the secular AI theme [1]. - It identifies five overarching themes and stock preferences, advocating a dual-pronged approach focusing on domestic policy beneficiaries and defensive games with solid global footprints [1]. - The report outlines expected sales volume growth for BYD, projecting 5.5 million units in 2025, a 29% year-over-year increase, with a stable market share of 35% in China's NEV sales [5]. - The report anticipates a recovery in Japan's tech sector around July-September, driven by a cyclical upturn and AI impact, with key stock recommendations including Murata Mfg, TDK, and Renesas [5]. - In the India QSR sector, the report expects a recovery in demand trends in the first half of FY26, with Domino's projected to outperform with 10% year-over-year LFL sales growth [5]. - AMEC is highlighted for its new product developments and increased R&D spending, with a positive outlook for growth [5]. Summary by Relevant Sections China Internet - The report discusses key investor focuses and debates following the China Internet results season, emphasizing stock ideas related to AI applications [1]. Japan Tech - The report notes early signs of recovery in Japan's tech sector, with a focus on production increases in edge AI devices expected around July-September [5]. BYD - BYD is projected to achieve a sales volume of 5.5 million units in 2025, with improvements in gross and net margins due to cost reduction efforts [5]. India QSR - The report anticipates a sluggish demand trend in Q4 FY25 but expects a recovery in the first half of FY26, with specific growth projections for Domino's and other QSR players [5]. AMEC - AMEC's recent product announcements and R&D advancements are expected to drive solid growth, with a target price set at Rmb275 [5]. Concordia Financial - Concordia Financial aims for a 9% ROE by FY3/28, reflecting a significant increase in net profits [9]. GDS Holdings - GDS's public REIT offering has been approved, with a projected distribution yield of 5.5% for 2025 [9]. Kuaishou - Kuaishou's advertising strategy focuses on content consumption ads and AI benefits, with confidence in achieving solid targets for 2025 despite a slowdown in Q1 [9].