ab 13 August 2024 Global Research and Evidence Lab Equities Spot On SA Miners—momentum & yield if spot prevails South Africa Mining 8% downside risk to 12M forward consensus earnings, on average If spot commodity prices prevail, we calculate upside risk to 12M forward consensus earnings for the gold miners (+32%) and the SA diversifieds (+1%) on an average market cap-weighted basis, while we calculate downside risk to for the PGM miners (- 15%) and dual-listeds (-21%) on an average market cap-weighted basis ...

Investment Rating - The investment rating for China CSSC Holdings is "Buy" with a price target of RMB 50.00 as of 12 August 2024 [10]. Core Insights - Yangzijiang Shipbuilding reported H124 results with a revenue growth of 15% year-over-year (YoY) and a gross profit margin (GPM) improvement of 8 percentage points YoY [1]. - The company achieved a strong order win of USD 8.5 billion in H124, which is 188% of its full-year goal for 2024, resulting in a total order book of USD 20 billion, equating to a duration of 4.6 years [1][2]. - The CEO indicated that while the upcycle for container shipbuilding may have peaked, there is an expectation for increased orders for energy shipping vessels, such as product tankers and LNG carriers [2]. - The shipbuilding margin is expected to remain stable, with Yangzijiang being the shipyard with the highest margins in the market, assuming no significant increases in steel prices or RMB appreciation [3]. Summary by Sections Financial Performance - Yangzijiang Shipbuilding's H124 revenue grew by 15% YoY and 2% quarter-over-quarter (QoQ) [1]. - The GPM improved by 8 percentage points YoY and 1 percentage point QoQ [1]. Order Book and Market Outlook - The total order book stands at USD 20 billion, with a duration of 4.6 years, indicating strong demand and longer delivery times accepted by shipowners [1]. - The CEO mentioned that the company would maintain flexibility for high-margin orders despite not revising the new order guidance [2]. Margin Stability - Yangzijiang Shipbuilding is expected to maintain elevated GPM levels, supported by a strong order backlog and competitive bidding for shipbuilding slots [3].

Investment Rating - The report initiates coverage of Xylem Inc with a Buy rating and a price target of $165, indicating a favorable outlook for the company [1][5][9]. Core Viewpoints - Xylem Inc is positioned as the leading pure-play water company, expected to achieve a mid-single-digit (MSD+) growth profile, which is less cyclical compared to peers. The company has a margin expansion opportunity of approximately 100 basis points per year [1][5][9]. - The growth outlook is supported by several secular trends, including aging water infrastructure, government funding for upgrades, stricter regulations on water quality, and global urbanization [3][5][25]. - The company generated approximately $7.4 billion in sales for FY23, with a diverse product suite that includes water flow, test and measurement, and treatment/filtration equipment [7][9]. Summary by Sections Investment Thesis - Xylem is expected to benefit from substantial demand for replacement and new equipment due to aging infrastructure in developed economies, supported by government funding and regulations addressing water contamination [3][5][25]. - The company is projected to achieve a sales compound annual growth rate (CAGR) of around 6% through 2028, which is above the market's expectations [3][5][27]. Financial Projections - Revenue projections for Xylem are as follows: $8.6 billion in 2024, $9.0 billion in 2025, and $9.6 billion in 2026, with net earnings expected to reach $1.0 billion in 2024 and $1.2 billion in 2025 [1][12]. - The report anticipates an EBITDA margin improvement from 16% in 2024 to 20% by 2028, reflecting the company's operational efficiency and strategic pricing actions [4][12]. Market Drivers - Key market drivers include the estimated $625 billion funding need for national drinking water infrastructure over the next 20 years, with over $50 billion allocated by the Bipartisan Infrastructure Law for improvements [6][26]. - Urbanization trends indicate that approximately 68% of the global population will live in urban areas by 2050, increasing the demand for water infrastructure and treatment solutions [6][26]. Competitive Positioning - Xylem's balance sheet is strong, with a net debt to EBITDA ratio of 0.7x, positioning the company favorably against its peers [5][11]. - The company is currently trading at a premium compared to its peers, reflecting its higher growth potential and lower cyclicality [14][18].

ab 13 August 2024 Global Research and Evidence Lab Equities Americas Insurance US Insurance Wrapping up 2Q24 Earnings Season Brokers and Personal Lines Reverse Last Week's Gains P&C insurers we cover were down 0.8% over the week, underperforming both Fins (+0.8%) and the S&P 500 (~flat). Brokers were down 1.9% with RYAN (-5%) and GSHD (-4.9%). Personal lines were also down with KMPR (-5.3%) and ALL (-3.3%). Commercial lines we cover were flat on average with WRB (+3.5%) and AIZ (+2.4%) offset by JRVR (-6.4% ...

ab 13 August 2024 Global Research and Evidence Lab China Consumer Staples Sector Channel check with a frozen food distributor in East China Product upgrades and pre-prepared dishes are key industry growth drivers We hosted a conference call with a frozen food distributor in East China to track recent industry trends. Overall, the distributor stays optimistic about the growth potential of frozen food industry, primarily driven by the increase in ASPs due to product upgrades, while volume growth is relatively ...

ab 13 August 2024 Global Research and Evidence Lab Powered by YES UBS Evidence Lab Peloton Interactive Inc July Web Traffic for Interactive Visits down -12% YOY; Q4 Preview July is down less than June-May declines of -17-19% Our analysis of total interactive visits to the Peloton website, with interactive visits defined as total visits excluding bounced visits (those that enter a site, take no action and then leave), shows July web traffic is down -12%, improving from steeper declines in May down -19% and J ...

ab 13 August 2024 Global Research and Evidence Lab First Read Natura &Co Sharp loss, despite improved results in LatAm; Avon Chapter 11 Avon's chapter 11 drives sharp net loss Although 2Q adj. EBITDA of 804m came-in just slightly below of expectations (UBSe R$827m), net loss came-in at a sharp -R$859m (vs. UBSe at +R$80m), due to a +R $725m write-off in Avon-related deferred taxes, as the company announced the Chapter 11 request of its subsidiary Avon Products, holding of the Avon beauty brand. As part of t ...

ab 13 August 2024 Global Research and Evidence Lab US Softlines Retail Expert Call Recap: Specialty Apparel Retail: Backto-School Starts Strong Specialty Apparel Retail industry sales growth trends have accelerated: The market is wondering how the Back-to-School (BTS) season has started for mallbased specialty apparel retailers. To address this question, we hosted a call on 8/9/24 with a senior leader of a specialty retail organization focused mainly on teen retail and fast fashion. The key conclusion is BT ...

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First Read ISS A/S H1 profits in-line, but with some mixed details Q: How did the results compare vs expectations? A: Q2 organic growth and H1 profits were broadly in-line with expectations, with guidance items reaffirmed and a modest buyback increase. Some of the details (e.g. outlook for net new contracts being lowered for FY'24e, despite some recent wins) were more mixed. Q: What were the most noteworthy areas in the results? A: Organic growth of +5.8% y/y in Q2'24 was in-line with consensus and similar ...