Investment Rating - The report assigns a Neutral rating to China Tower [1][9][16] Core Insights - China Tower's 3Q24 results were mixed, with total revenue growth decelerating from 4% year-over-year (yoy) in 2Q24 to 2% in 3Q24, primarily due to a slowdown in the TSP business, despite steady performance in the Two Wings segment [1][9] - EBITDA growth improved slightly from 3.4% to 3.7% yoy in 3Q24, attributed to stringent cost control measures, while net profit growth rebounded from 9% to 13% yoy due to slower depreciation and amortization (D&A) expense increases and reduced finance costs [1][9][2] - The report anticipates a positive short-term reaction in China Tower's share price due to solid earnings improvement, although it expresses concerns that consensus earnings estimates may be overly optimistic, leading to potential downward revisions that could negatively impact the share price in the medium term [1][7][9] Summary by Sections Revenue Performance - Total revenue growth slowed from 4% yoy in 2Q24 to 2% in 3Q24, driven by a notable slowdown in the TSP business [1][9] - TSP revenue growth decreased from 4% yoy in 2Q24 to 1% in 3Q24, with tower leasing and DAS revenue growth dropping significantly [3][9] Earnings and Profitability - EBITDA growth increased from 3.4% to 3.7% yoy in 3Q24, supported by reduced repair and maintenance expenses [2][9] - Net profit growth accelerated from 11% in 1Q24 and 9% in 2Q24 to 13% in 3Q24, benefiting from improved EBITDA, slower D&A expense increases, and lower finance costs [2][9] Business Segments - The Two Wings business showed mixed results, with energy operations experiencing a decline for the first time, while Smart Tower revenue increased from 14.5% yoy in 2Q24 to 17% in 3Q24 [4][9] - Overall, the Two Wings business maintained steady growth at approximately 10% yoy in 3Q24 [4][9] Market Expectations - The consensus for China Tower's 2024 revenue, EBITDA, and earnings stands at RMB 98 billion, RMB 66 billion, and RMB 11 billion respectively, implying growth rates of 7%, 5%, and 18% for 4Q24 [6][9] - The report suggests that these consensus numbers are likely to be revised downward following the latest results [6][9]

Investment Rating - The industry investment rating is "In-Line" [4] Core Insights - YTO led year-over-year (YoY) volume and revenue growth in September 2024, likely benefiting from a low base [2] - SF's international revenue increased by 23% YoY, driven by rising seaborne shipping rates and growing air cargo demand [2] - A mild month-over-month (MoM) average selling price (ASP) improvement suggests that more profit from price hikes is being allocated to network partners rather than headquarters [2] - On a two-year compound annual growth rate (CAGR) basis, YTO, STO, Yunda, and SF's volume increased by 22%, 28%, 17%, and 9%, respectively [2] Volume Summary - YTO recorded the fastest volume growth at 28% YoY, followed by STO and Yunda at 22% each, while SF's volume grew by 13% YoY [2][3] - In 3Q24, YTO outperformed with 28.1% YoY volume growth, followed by STO at 27.9%, Yunda at 23.7%, and SF at 14.5% [3] Revenue Summary - YTO led with 20% YoY revenue growth, followed by STO and Yunda at 17% and 7%, respectively, while SF's express revenue grew by only 5% YoY [3] - In 3Q24, revenue growth for STO and YTO was approximately 21% YoY, while Yunda and SF saw growth of 11% and 8%, respectively [3] ASP Summary - Yunda experienced the largest YoY ASP drop of 12.5%, while YTO and SF saw declines of 7% each, and STO's ASP dropped by 4% [3] - On a MoM basis, the ASP for Yunda, STO, and YTO improved by 0.6-1.0%, while SF's ASP grew by 2% [3] Market Share Insights - In September 2024, YTO achieved a market share of 15.4%, gaining 1.2 percentage points YoY, while SF's market share declined by 0.4 percentage points to 7.6% [5] - On a two-year CAGR basis, market share changes for YTO, STO, Yunda, and SF were 1.2ppt, 0.4ppt, 0.4ppt, and -0.4ppt, respectively [2][5]

M Global Foundation Sunday Start | What's Next in Global Macro October 20, 2024 06:00 AM GMT Looking Back from Over There After a week speaking with clients in London, I am struck by both the parallels and contrasts with my conversations here in New York. Everyone there wanted to talk about the Fed and the US election, and while the questions on the Fed were familiar, the election discussions were vastly different. As in New York, conversations about Europe covered a pastiche of topics rather than a single ...

Investment Rating - The stock rating for Zhejiang Huayou Cobalt Co Ltd is Equal-weight [4] - The industry view is Attractive [4] Core Insights - The company reported a net profit of Rmb1.3 billion for 3Q24, which is an increase from Rmb1.1 billion in 2Q24 and Rmb928 million in 3Q23, exceeding expectations [1] - The 9M24 profit reached Rmb3 billion, reflecting a year-on-year increase of 0.2% [1] - The good performance is attributed to better-than-expected gross profit margin (GPM), lower tax expenses, and reduced minority interest [2] - The GPM for 3Q24 was 18.8%, only slightly down by 1.4 percentage points quarter-on-quarter [2] - The effective tax rate decreased to 3.7% in 3Q24 from 4.4% in 2Q24 and 12.1% in 3Q23 [2] - Minority interest accounted for 4.5% of profit after tax, significantly lower than 35.5% in 2Q24 [2] Capacity Expansion - Ongoing construction of the Huaneng 50kt ternary precursor project in Indonesia was completed on October 18, 2024 [2] - The Huaxiang 50kt sulfuric nickel project and the Hungary 25kt cathode material projects are currently under construction [2] Financial Metrics - The price target for the stock is set at Rmb27.00, indicating a downside of 7% from the current price of Rmb28.95 [4] - The market capitalization is Rmb49.507 billion, with an enterprise value of Rmb70.270 billion [4] - Projected EPS for fiscal years ending in 2023, 2024, 2025, and 2026 are Rmb2.05, Rmb1.34, Rmb1.42, and Rmb2.00 respectively [4] - Revenue projections for the same fiscal years are Rmb65.936 billion, Rmb63.642 billion, Rmb66.235 billion, and Rmb70.900 billion respectively [4] - The P/E ratio is projected to be 16.1 for 2023 and 21.5 for 2024 [4]

Investment Rating - The report assigns an "Attractive" investment rating to the gas utilities industry in China [1]. Core Insights - The gas demand in China has shown a strong growth of approximately 10% in the first nine months of 2024, primarily driven by gas power and LNG trucks [1]. - The overall gas supply is expected to be abundant for the upcoming winter, although short-term shortages may occur due to extreme weather conditions [1][2]. - The report anticipates that global LNG prices will remain stable before trending lower in mid-2025, influenced by new supply additions and geopolitical factors [1][4]. Summary by Sections Demand and Supply Outlook - The demand for gas in China is projected to remain resilient, with significant contributions from LNG trucks and gas power generation [1][4]. - A weak La Niña situation is confirmed for this winter, but temperature predictions remain uncertain, impacting gas demand [2][3]. - Domestic gas, Russian piped gas, imported LNG, and gas storage are all expected to show steady year-on-year growth, covering overall gas demand during winter under normal climate conditions [2]. Pricing and Economic Factors - Better pricing of LNG relative to other energy sources is likely to boost natural gas demand across various sectors, including transportation and power generation [4]. - The report suggests that the economics of gas storage and peak shaving facilities need reform to ensure costs are passed through to users [3]. Long-term Outlook - Natural gas is expected to continue growing as a key energy source in China, substituting for coal and supporting renewable energy initiatives until 2035-2040 [4]. - The future development of natural gas will depend on its synergy with renewable power and pricing dynamics [4].

Investment Rating - The report does not explicitly state an investment rating for the industry Core Insights - The report discusses a "5R" reflation strategy focusing on restructuring and rekindling economic growth, with limited efforts on economic rebalancing [2] - Significant one-time debt swaps are estimated to resolve implicit local debt amounting to Rmb6 trillion over multiple years [2][8] - The report highlights the need for strong policy stimulus to address the current weak economy, particularly in the housing and capital markets [4] Summary by Sections Local Debt Resolution - Policymakers have pledged large-scale local debt relief to reverse fiscal austerity [8] - A significant one-time debt swap is expected to reach Rmb6 trillion or more over multiple years [8] Housing Market Initiatives - The first official endorsement of using Local Government Special Bonds (LGSB) to buy back housing inventory has been made [2] - A cash resettlement program for 1 million units under urban village redevelopment is underway [3][12] Fiscal Policy and Economic Stimulus - A cumulative Rmb2 trillion supplementary budget is expected in Q4 2024, including Rmb200 billion for infrastructure and Rmb1 trillion for bank recapitalization [7] - The report anticipates a net Rmb2-3 trillion stimulus every year to support economic recovery [10] Social Welfare and Birth Subsidies - The report emphasizes the need for social welfare reform to boost household consumption, suggesting that exempting social security contributions could unleash a trillion yuan [14] - Financial pressures are identified as a major concern behind declining birth rates, with new births significantly dropping [16]

Investment Rating - The investment rating for COSCO SHIPPING Energy Transportation is Overweight, with an industry view of In-Line [4][18]. Core Insights - COSCO Shipping Group plans to increase its stake in CSEA by 1.1-2.2% over the next six months, with a total investment of Rmb679 million to Rmb1,358 million, funded through own funds and special loans [2][3]. - The share repurchase is expected to positively impact share prices, with active positive return-to-investment (RTI) expectations for CSE-A and CSE-H [3]. - The current trading price of CSE-A is above 1x price-to-book (P/B) ratio, complicating share repurchase decisions for state-owned enterprises (SOEs) [3]. Financial Metrics - Price target for COSCO SHIPPING Energy Transportation is HK$11.10, representing a 33% upside from the current price of HK$8.37 [4]. - Market capitalization is Rmb55,086 million, with an enterprise value of Rmb80,571 million [4]. - Projected revenue growth from Rmb21,912 million in FY 2023 to Rmb25,379 million by FY 2026 [4]. - Earnings per share (EPS) expected to increase from Rmb0.70 in FY 2023 to Rmb1.21 in FY 2026 [4]. - Dividend yield projected to rise from 5.2% in FY 2023 to 7.9% in FY 2026 [4]. Valuation Methodology - Target price-to-book (P/B) multiples are set at 1.2x for the base case, 1.7x for the bull case, and 0.8x for the bear case [6]. - The stronger-than-expected spot market has increased confidence in the tanker bull cycle [6][7].

Investment Rating - The report assigns an "Overweight" (OW) rating to Apple, indicating an expectation that the stock will outperform the average total return of its coverage universe [10]. Core Insights - The report highlights a demand improvement for the iPhone 16 series, with average lead times now in line with the iPhone 15, suggesting a recovery in demand momentum following the initial weeks post-launch [1][2]. - Delivery lead times for the iPhone 16 series have moderated slightly, with a 3-day reduction in aggregate lead times compared to the previous week, while specific models show varied changes in lead times across different regions [1][2]. - The US accounts for approximately 32% of iPhone shipments, while China accounts for about 20%, indicating significant market shares in these regions [1][2]. Summary by Region US Tracker - In the US, lead times for the iPhone 16 and 16 Plus are now 3 days each, down from 4 days, while Pro and Pro Max lead times are 15 and 21 days, respectively [1][2]. - Almost all variants of the iPhone 16 series were available for in-store pickup as of October 18 [1][2]. China Tracker - In China, lead times for the iPhone 16 and 16 Plus have increased to 4 days each, while Pro and Pro Max lead times are 14 and 19 days, respectively [1][2]. - Most variants of the iPhone 16 series were available for pickup on October 19 [1][2]. Europe Tracker - In Germany, lead times for the iPhone 16 and 16 Plus remain stable at 3 days each, while Pro and Pro Max lead times have moderated to 19 and 24 days, respectively [2]. - In the UK, lead times for the iPhone 16 and 16 Plus are 4 and 5 days, while Pro and Pro Max lead times are 16 and 22 days, respectively [2].

Investment Rating - The report maintains an "Overweight" rating for Welltower Inc. (WELL), American Healthcare REIT, Inc. (AHR), and an "Equal-weight" rating for Ventas Inc. (VTR) [5][10][36]. Core Insights - The healthcare REIT sector is expected to continue outperforming in 2025, driven by strong supply-demand dynamics and external growth opportunities, particularly in senior housing [4][10]. - The report anticipates solid third-quarter results for healthcare REITs, with potential upside risks to estimates due to robust fundamentals and investment activity [4][10]. - The healthcare REIT subsector has shown strong performance, with a year-to-date return of +33%, significantly outperforming the broader REIT market [4][10]. Summary by Company Welltower Inc. (WELL) - Price target raised from $115 to $135, reflecting a 29x multiple on 2025 estimated FFO of $4.58 [5][10]. - Expected 3Q FFO to be above consensus, with a guidance raise of +$0.02 to $4.19 (+15.4% YoY) [4][19]. - Strong occupancy recovery in senior housing, with SHOP same-store NOI growth projected at 21.7% [15][18]. Ventas Inc. (VTR) - Price target increased from $57 to $65, based on a 19.5x multiple on 2025 estimated FFO of $3.34 [5][10]. - Anticipated 3Q FFO to be in line with consensus, with a guidance raise of +$0.01 to $3.16 (+5.9% YoY) [4][21]. - Occupancy growth accelerated to +350bps YoY in August, indicating strong demand [4][22]. American Healthcare REIT, Inc. (AHR) - Price target raised from $22 to $27, reflecting a 19.5x multiple on 2025 estimated FFO of $1.40 [5][10]. - Expected 3Q FFO to be in line with consensus, with a guidance raise of +$0.02 to $1.27 (-13% YoY due to IPO) [4][23]. - Strong performance in same-store occupancy, with improvements noted in both ISHC and SHOP segments [4][23]. Healthpeak Properties Inc. (DOC) - Price target remains unchanged at $23.50, based on a 12.5x multiple on 2025 estimated FFO of $1.85 [5][10]. - Expected 3Q FFO to be above consensus, with management likely to reiterate guidance [4][25]. - Anticipated same-store NOI growth of 4.2% in 3Q, with a focus on lab leasing activity [15][25].

Investment Rating - The report indicates a cautious outlook for the A-share market, advising a focus on dividend yield plays and earnings certainty due to expected high market volatility [2][9]. Core Insights - A-share investor sentiment has significantly decreased, with the Weighted MSASI dropping by 68 percentage points to 82% and the Simple MSASI down by 69 percentage points to 75% compared to the previous week [2][5]. - Recent macroeconomic data has shown broad-based slippage, with CPI growth at 0.4% year-on-year, missing expectations of 0.6%, and PPI remaining sluggish at -0.6% month-on-month [4][9]. - Southbound net inflows continued for the 32nd consecutive week, totaling US$3.8 billion during October 10-16, with year-to-date net inflows reaching US$68.4 billion [3]. Summary by Sections Market Sentiment - The average daily turnover for ChiNext, A-shares, Equity Futures, and Northbound decreased by 19%, 28%, 35%, and 23% respectively during the period of October 10-16 compared to the previous cycle [2][4]. - The RSI-30D decreased by 9 percentage points compared to the prior cut-off date [2]. Macroeconomic Indicators - Credit growth has slowed, with M1 year-on-year growth hitting a record low of -7.4%, indicating weak credit demand from the corporate sector [4]. - Export growth has unexpectedly declined due to supply disruptions and weakening global demand, as reflected in the downtrend of the global manufacturing PMI [4]. Policy and Market Outlook - The report suggests that the current policy framework indicates a gradual approach to fiscal measures, with a lack of commitment to scale and consumption stimulus raising concerns [8][9]. - The report recommends focusing on stock selection and downside protection, as existing market valuations have incorporated substantial optimism regarding reflationary measures [9][10].