Investment Rating - The report maintains a "Buy" rating for selected stocks in the China property sector, specifically mentioning COLI, CRL, Greentown, and Longfor, which are currently trading at the lower end of their trading range, reflecting an average pricing in of a 15-20% decline in property prices from current levels [1][7]. Core Insights - The report indicates that there are signs of a bottoming industry outlook for 2025, with the need for better policy execution to support market stabilization and increase household confidence [1][8]. - It highlights that the physical markets and developers' liquidity are showing incremental positive developments, which could lead to a recovery in the sector [1][40]. - The report emphasizes the importance of effective execution of previously announced government policies, including funding support and inventory reduction measures, to enhance market stability [8][10]. Summary by Sections Market Overview - The report notes that high-tier cities are likely to continue outperforming in transaction volumes, with a 20%+ improvement in QTD transaction volume compared to pre-easing levels [16][18]. - The average price index for 70 cities showed slight declines of -0.1% in primary and -0.3% in secondary markets month-over-month [22][22]. Policy Execution - Key policies include a "whitelist program" with Rmb5.6 trillion in funding support approved by mid-January 2025, and an inventory reduction initiative that has begun to yield results at the local level [8][10]. - The report anticipates further details on funding support and potential RRR cuts, which could lead to lower mortgage rates and stimulate market activity [8][10]. Developer Liquidity - Incremental positive developments in developer liquidity are noted, including Greentown's issuance of US$350 million in senior notes, marking a recovery in investor confidence [40]. - Vanke is expected to benefit from a new government liquidity injection plan to address its funding gap, which includes local government mobilization of Rmb20 billion to acquire unsold projects [40]. Valuation and Market Sentiment - The report suggests that evidence of market stabilization will support higher valuations for the covered developers in the coming months [1][7]. - The sentiment in the primary and secondary markets is improving, with positive year-over-year trends in new project launches observed in February 2025 [16][18].

Investment Rating - The report initiates coverage on Yuneng with a Buy rating, indicating a positive outlook for the company within the LFP cathode sector [3][14]. Core Insights - The report highlights a cyclical recovery in China's LFP cathode sector, forecasting utilization to increase from 71% in 2024E to 86% in 2026E, driven by a robust demand outlook and disciplined capacity expansion [2][19]. - LFP cathode demand is projected to grow at a CAGR of 34% from 2024E to 2026E, supported by strong demand from both Battery Energy Storage Systems (BESS) and New Energy Vehicles (NEV) [12][22]. - The report emphasizes Yuneng's strong market position, with a projected EPS CAGR of approximately 187% from 2024E to 2026E, benefiting from volume growth and margin expansion [4][14]. Summary by Sections Demand Outlook - The demand for LFP cathodes is expected to grow significantly, with NEV demand growing at a CAGR of 27% and BESS demand at 44% from 2024E to 2026E [22][24]. - The cost advantages of LFP batteries over NCM batteries are projected to expand to approximately 30% in 2025E, enhancing LFP's market penetration [21][35]. Supply Dynamics - Capacity growth for LFP cathodes is estimated to decelerate to a CAGR of 19% from 2024E to 2026E, following a substantial 75% reduction in CAPEX from the peak in 2Q23 [39][42]. - The report notes that the LFP cathode sector is experiencing disciplined capacity expansion, which is expected to lag behind the demand growth [39][44]. Company-Specific Insights - Yuneng is positioned to capture significant volume growth and margin recovery, with a market share of approximately 34% globally [3][14]. - The report forecasts Yuneng's unit gross profit to increase from Rmb2.4k/t in 2024E to Rmb6.0k/t in 2026E, reflecting strong operational efficiency [14]. Inventory and Utilization Trends - The report anticipates a rebound in LFP cathode utilization to 86% in 2026E, supported by a positive demand outlook and potential inventory cycle tailwinds [50]. - Early signs of positive inventory momentum are noted, with lithium carbonate prices appearing to reach a bottom, which could further support utilization rates [50].

Investment Rating - The report assigns a "Buy" rating for Xiaomi Corp. (1810.HK) [1] Core Insights - The report highlights Xiaomi's strong positioning to enhance its AI technology capabilities and expand its "Human x Car x Home" ecosystem, aiming to drive sales and improve its market position in the long term [2] - Revenue forecasts for 2025-26E have been raised by 4%-7%, primarily due to a more optimistic outlook for AIoT and EV segments, with projected revenue CAGRs of 17% and 99% respectively from 2024-27E [10][19] - The target price has been increased to HK$58 from HK$38, reflecting a more favorable growth outlook and strong performance in the AIoT and EV segments [20][22] Financial Forecasts - Revenue projections for Xiaomi are as follows: - 2023: Rmb 270,970.2 million - 2024E: Rmb 362,259.2 million - 2025E: Rmb 470,957.6 million - 2026E: Rmb 606,969.4 million [5][16] - EPS estimates have been revised upward for 2025-26E, with new projections of Rmb 1.37 and Rmb 2.02 respectively, indicating a significant profit growth trajectory [10][19] - The report anticipates a 30% year-over-year group revenue growth in 2025E, aligning with management guidance [10] Market Position and Competitive Advantage - Xiaomi is expected to leverage its native AI interface, Xiaoai, embedded in Xiaomi HyperOS, to enhance customer acquisition and interaction within its hardware and software IoT ecosystem [2] - The company is projected to have approximately 900 million connected AIoT devices by 2024E, positioning it as a leader in the global AIoT ecosystem [2] Valuation Metrics - The report provides the following valuation ratios for Xiaomi: - P/E (2025E): 33.5 - P/B (2025E): 5.5 - EV/EBITDA (2025E): 24.5 [12][16] - The report indicates a significant increase in the valuation of Xiaomi's core business, with a 57% higher 12-month forward valuation at Rmb 921 billion [20][21] Growth Projections - The report forecasts a 26% revenue CAGR for Xiaomi from 2024-27E, indicating one of the fastest growth rates among major Asian TMT companies [21] - The net profit is expected to grow at a CAGR of 36% during the same period, driven by strong performance in the AIoT and EV segments [32]

Investment Rating - Envicool and Kehua are rated as Buy, while Kstar is rated as Neutral [2][12][22] Core Insights - Alibaba's significant increase in capital expenditures, amounting to Rmb31.8 billion (approximately US$4.35 billion) in Q4 2024, reflects a 260% year-over-year growth and an 80% quarter-over-quarter growth, primarily driven by cloud infrastructure investments [2][7] - The anticipated increase in cloud revenue and capital expenditures from Alibaba, a leading hyperscaler in China, is expected to positively impact the demand and supply dynamics within the Chinese data center industry [2][12] - Envicool and Kehua are highlighted as having substantial revenue exposure to data center and server markets, with 54% and 37% of their total revenue in 2024E coming from these sectors, respectively [2][12] - Kstar's revenue exposure to data centers is 62%, but it is split between domestic and international markets, leading to a Neutral rating due to lower exposure to internet and cloud customers [2][12] Summary by Company Envicool - Envicool specializes in precision cooling technology for data centers and energy storage systems, benefiting from the digital economy and carbon reduction trends in China [14] - The company is expected to see strong revenue growth driven by the adoption of liquid cooling technologies, particularly in the context of increasing investments in generative AI [14][16] - The 12-month target price for Envicool is set at Rmb30.2, based on a 2025E P/E of 25x [16] Kehua - Kehua is a leader in the Uninterruptible Power Supply (UPS) market in China, with a 13% domestic market share and a 3% global market share as of 2022 [18] - The company is expected to achieve revenue and net income CAGRs of 20% and 25% respectively from 2023E to 2025E, driven by growth in the energy storage system sector [18][19] - The 12-month target price for Kehua is Rmb22.2, based on a 2025E P/E of 15x [19] Kstar - Kstar focuses on electric power conversion technology, holding the largest UPS shipment in China for 21 years, with a 9% domestic and 3% global market share in 2022 [22] - The company is projected to deliver revenue and net income CAGRs of 17% and 9% respectively from 2023E to 2025E, primarily driven by growth in PV inverters and residential energy storage systems [22][23] - The 12-month target price for Kstar is Rmb18.2, based on a 2025E P/E of 15x [23]

Investment Rating - The report does not explicitly provide an investment rating for the hedge fund industry but indicates a positive performance trend with hedge funds achieving a +3% YTD return and a +10% return for the Hedge Fund VIP list [2][12][13]. Core Insights - Hedge funds are becoming more selective in their investments, particularly rotating away from Financials and increasing exposure to Health Care and Communication Services [4][11]. - The average US long/short equity hedge fund has delivered a +3% YTD return, with popular long positions outperforming concentrated shorts in most sectors [2][12]. - Hedge funds are focusing on stocks related to AI and potential deregulation, with notable increases in positions for companies like CRM and NOW [4][48]. Performance, Leverage, and Short Interest - Hedge funds have lifted gross and net leverage, with gross leverage at 284%, ranking in the 99th percentile compared to the last five years [23]. - The median S&P 500 stock has a short interest of 2.0% of market cap, the highest level since 2020 [24][29]. - Hedge fund long positions have outperformed the S&P 500 by 11 percentage points over the last six months, marking the largest magnitude of outperformance since 2021 [12][20]. Sector Positions - Hedge funds have reduced their net tilt towards Financials, which have rallied +12% since the 2024 presidential election, while increasing exposure to Health Care and Communication Services [11]. - The report highlights that many Financials stocks still appear on the Hedge Fund VIP list, indicating selective interest despite the overall sector reduction [11][4]. Thematic and Factor Tilts - Hedge funds have increased ownership in potential deregulation beneficiaries and stocks with domestic sales, while reducing exposure to companies with significant China supply chain risks [48]. - The report notes a significant increase in hedge fund positions in AI-enabled revenue stocks, with the Software industry now representing 11% of hedge fund long portfolios, the largest weight since Q3 2023 [4][48].

Investment Ratings - Alibaba: Buy with a 12-month target price (TP) raised to US$160/HK$156 from US$117/HK$114 [1] - Xiaomi: Buy with a 12-month TP increased to HK$58 [2] - Humanoid Robots: Buy-rated companies include Harmonic Drive, Sanhua & Tuopu [6] - Rio Tinto: Buy with a 12-month TP of A$143.70 [10] - NetEase: Buy with a 12-month TP of US$116/HK$181 [11] - Bilibili: Buy with a 12-month TP raised to US$23.7/HK$185 [11] - Laopu Gold: Buy with a new 12-month TP of HKD553 [11] - Mengniu Dairy: Buy with a 12-month TP raised to HK$23.60 from HK$21.80 [13] - Tokyo Electron: Buy with a 12-month TP of ¥35,000 [14] - Foxconn Industrial: Buy with a 12-month TP of Rmb25.84 [15] - BYDE: Buy with a 12-month TP of HK$67.05 [15] Core Insights - Alibaba's eCommerce profits are stabilizing, with a significant upside from AI and cloud services, leading to an increase in revenue growth forecasts for Alibaba Cloud [1] - Xiaomi is enhancing its AI capabilities and expanding its ecosystem, resulting in increased revenue forecasts for 2025-26E by 4%-7% [2] - The global humanoid robot industry is transitioning to volume production, with a potential total addressable market (TAM) of US$38 billion to US$205 billion by 2035E [6] - China's "Two Sessions" are expected to maintain a GDP growth target of "around 5%" and increase the fiscal deficit target to 4.0% of GDP, indicating a focus on fiscal expansion [8] - The Chinese property market shows signs of bottoming, with better policy execution needed to support recovery and increase household confidence [8] Summary by Company Alibaba - 3QFY25 results exceeded expectations, leading to a TP increase and a Buy rating [1] - Cloud revenue growth forecast raised to +23%/+25% for FY26/27E [1] Xiaomi - Positioned to leverage AI for expanding its ecosystem, with revenue forecasts raised by 4%-7% [2] - EPS forecasts lifted by 17-20% due to improved profitability in IoT and EV sectors [2] Humanoid Robots - Industry entering volume production phase with significant demand growth anticipated [6] - Preferred stocks include Harmonic Drive, Sanhua & Tuopu [6] Rio Tinto - 2024 results in line with estimates, maintaining a Buy rating with a strong cash flow outlook [10] NetEase - Strong performance in PC games offsetting mobile slowdown, leading to a Buy rating [11] Bilibili - First positive GAAP profit quarter, positioned to benefit from AI and advertising growth [11] Laopu Gold - Profit warning indicates higher productivity, leading to a TP increase [11] Mengniu Dairy - Strong core profit delivery amid low cycle, with earnings estimates revised up [13] Tokyo Electron - Expected growth driven by advanced memory investments, maintaining a Buy rating [14] Foxconn Industrial - Positive outlook on cloud computing business and AI server shipments [15] BYDE - Anticipated growth in automotive electronics supported by smart driving adoption [15]

Investment Rating - The report indicates a challenging week for US equities, with a focus on momentum wobbles, retail pressure, and poor economic data, leading to a negative sentiment in the market [1][2]. Core Insights - US stocks experienced a decline influenced by long-term inflation expectations and new coronavirus headlines, with specific sectors like Bond Proxies, GLP-1, and China ADRs outperforming, while Bitcoin Sensitive Equities, Memes, and AI Software faced significant losses [1][2]. - Hedge funds (HFs) have been net sellers for eight consecutive weeks, particularly in TMT stocks, indicating a significant unwinding of risk, comparable to levels seen in July of the previous year [3][4]. - The retail sector has been underperforming, with the GS Retailer Basket down 5% year-to-date, reflecting a broader trend of consumer spending volatility [13][14]. Summary by Sections Market Overview - US equities faced downward pressure due to macroeconomic factors, with a notable net selling activity from hedge funds, particularly in technology and consumer sectors [3][4]. - The S&P 500 implied move for the upcoming week is projected at 1.27%, with key macroeconomic indicators such as US Consumer Confidence, GDP, and PCE scheduled for release [4][5]. Sector Performance - The healthcare sector outperformed during the week, driven by a defensive rotation amidst weaker consumer data, although some companies faced significant challenges [13][15]. - Retailers are experiencing a slow start to Q1, with notable declines in consumer discretionary stocks, which have been net sold for nine consecutive weeks [3][14]. Futures and Derivatives - Positioning in Russell 2K futures has significantly decreased year-to-date, with expectations of additional supply if negative price momentum continues [6][7]. - The report highlights an oversupply of dealer gamma in derivatives, with expectations of volatility stabilizing at a local floor [8]. ETFs and Investment Trends - Recent activity in China Technology ETFs has shown a shift towards profit-taking, while there has been a rotation into gold as a safe haven amid tariff uncertainties [9][10]. - The report notes that retail euphoria may create opportunities as the US tax season approaches, but risks are present if retail investors need to liquidate positions to cover capital gains [11][12].

Investment Rating - The report maintains a Neutral rating for Cambricon (688256.SS) with a 12-month price target of Rmb607.80, reflecting a downside of 1.7% from the current price of Rmb618.51 [14][16]. Core Insights - The collaboration between Nanjing Intelligent Computing Center and Cambricon to establish a data center utilizing local chips and computing power is expected to enhance the retail industry's AI capabilities, particularly through the DeepSeek foundation model [1]. - The revenue guidance for Q4 2024 is projected between Rmb885 million and Rmb1,015 million, indicating a year-over-year growth of 57% to 80%, with a net income of Rmb284 million, marking a significant recovery from a loss of Rmb37 million in Q4 2023 [2][3]. - The report highlights the positive impact of generative AI on Cambricon's market expansion, enabling clients to leverage AI across various applications [2][3]. Revenue and Earnings Forecast - The earnings revision indicates a reduction in the expected net loss for 2024 to Rmb433 million from a previous estimate of Rmb617 million, driven by stronger-than-expected guidance and the growth of generative AI applications [4][6]. - Revenue estimates for 2025-2027 have been increased by 9%, 6%, and 4% respectively, reflecting the anticipated demand and cost-saving potential in marketing [6][9]. Valuation Methodology - The report employs a discounted EV/EBITDA methodology to derive the target price, applying a multiple of 77x EV/EBITDA for the 2030E EBITDA, which has been raised by 4% [9][17]. - The target EV/EBITDA multiple is based on comparisons with local semiconductor peers, with an assumption of a 23% EBITDA growth rate in the outer years and a sustained EBITDA margin of 41% [9][17]. - The updated target price of Rmb607.80 implies a valuation of 77x 2025E EV/Sales, consistent with historical trading ranges [9][17].

Investment Rating - The report maintains a "Buy" rating on Alibaba Group with a lifted 12-month target price to US$160/HK$156 from US$117/HK$114 [2][3][29] Core Insights - Alibaba's domestic eCommerce profits are stabilizing, with expectations of stable absolute Taobao-Tmall EBITA for FY26-27E [2][3] - Alibaba Cloud revenue growth is projected to accelerate to +23%/+25% for FY26/27E, up from +13%/+14% [2][3] - The report highlights the significant increase in AI-related capital expenditures, with a targeted annual capex of Rmb100bn (approximately US$14bn) [7][8] Summary by Business Segments eCommerce - Domestic eCommerce market share and profits are stabilizing, with CMR growth of +9% YoY, leading to a revised Taobao-Tmall valuation of US$96 per ADS [5][6] - Forecasted CMR growth for 4QFY25E/FY26/FY27E is 6%/5%/4% respectively, reflecting ongoing competition in the eCommerce sector [5][6] Cloud Services - Alibaba Cloud's revenue growth is expected to reach +23%/+25% YoY for FY26/27E, driven by rising AI demand and a strong public cloud performance [15][16] - The cloud valuation has been lifted to US$31 per ADS from US$19, reflecting the anticipated growth in AI infrastructure [7][8] International eCommerce - AIDC is expected to achieve a single quarter EBITA profit turnaround in FY26E, despite wider losses in the previous quarter [9][10] Local Services - Revenue for local services grew by +12% YoY to Rmb17.0bn, with adjusted EBITA loss narrowing significantly [17][18] Non-Core Segments - Losses in non-core business segments are narrowing, with improved operating efficiency in local services and digital media [19][20] Shareholder Returns - The report notes a quarterly buyback of US$1.3bn, although the pace has moderated compared to previous quarters [22][23]

Investment Rating - The report raises the end-2025 gold price target to $3,100 per ounce from a previous target of $2,890 per ounce, with a potential upside to $3,300 per ounce if uncertainty persists [2][6][20]. Core Insights - The increase in the gold price forecast is attributed to structurally higher central bank demand, with a strong December nowcast indicating 108 tonnes of demand, significantly above the pre-2022 average of 17 tonnes [6][7][10]. - China remains the largest buyer, contributing 45 tonnes to the December total, leading to an upgrade in the central bank demand assumption to 50 tonnes per month from 41 tonnes [6][7][10]. - The report estimates that the higher central bank demand will contribute approximately 9% to the gold price by year-end, alongside a 2% boost from increasing ETF holdings as the funds rate declines, which should outweigh a 4% drag from normalizing positioning [6][10][22]. Summary by Sections Central Bank Demand - The December nowcast for central bank and institutional gold demand reached 108 tonnes, with China being the largest contributor at 45 tonnes [6][7][10]. - The central bank demand assumption has been revised to an average of 50 tonnes per month going forward [6][10]. Price Forecasts - The end-2025 gold price target has been raised to $3,100 per ounce, with a potential high of $3,300 per ounce if policy uncertainty remains elevated [2][20]. - If central bank purchases average 70 tonnes per month, the gold price could reach $3,200 per ounce by the end of 2025 [16][22]. Market Dynamics - The report highlights that elevated policy uncertainty, including tariff fears, could lead to speculative positioning that drives gold prices higher [16][22]. - A potential increase in trade tensions and concerns over US fiscal sustainability could further support gold prices, with estimates suggesting a rise to $3,250 per ounce under such conditions [22].