13 February 2025 ASE Technology Holding (3711 TT) Buy: Reiterating positive outlook in leading edge & testing Better 4Q24 EMS sales offset by product mix: 4Q24 revenue of TWD162bn (+1% QoQ), beat HSBCe/cons est by 3%/2%. The ATM segment saw 3% QoQ revenue growth, mostly in line with expectation, driven by pull in of communication application. By revenue type, testing continued to see higher than average growth. ATM GM came at 23.3% (flattish QoQ), in line with expectation. EMS revenue was flattish QoQ, miss ...

Summary of Applied Materials Inc (AMAT.O) Management Callback Notes Company Overview - **Company**: Applied Materials Inc (AMAT.O) - **Date of Call**: 13 February 2025 - **Market Cap**: US$149,756 million [7] Key Industry Insights Impact of China Restrictions - The company anticipates a **$400 million impact** from restrictions in China, divided approximately **50/50** between equipment and services. - About **50%** of this impact is expected to occur in **FQ2**, with the majority of equipment impact also in **FQ2**. - Services impact will continue into **FQ3** and **FQ4**, but will not increase [2] AGS Growth - Due to the restrictions, AGS (Applied Global Services) is not expected to grow at a **low double-digit** rate in **FY25**, but is projected to resume low double-digit growth annually starting from **FQ2** [3] Advanced Packaging - Management foresees some headwinds in the first half of the year for advanced packaging due to a high installation rate of HBM (High Bandwidth Memory) equipment last year. - However, revenue from advanced packaging is expected to **double** over the next **3-4 years** [3] Tariffs - Management is closely monitoring tariffs and is cautious about raising the gross margin baseline due to potential tariff impacts. - If tariffs are sustained, the company may adjust its supply chain and could potentially pass on costs in the long term. - Most of the supply chain is located in the US and Japan, which are not expected to be impacted by tariffs [4] Display Market - The company expects an increase in **OLED** penetration across all device types and has a strong solution in the OLED space, including the **MAX OLED** solution announced last November. - Despite a currently low display equipment market, management is confident in future growth [5] Operating Expenses - The company expects **R&D** expenses to grow in line with revenue, while **SG&A** (Selling, General and Administrative) expenses will grow at a lesser rate [6] Financial Projections - **Current Price**: US$184.27 - **Target Price**: US$194.00 - **Expected Share Price Return**: **5.3%** - **Expected Dividend Yield**: **0.9%** - **Expected Total Return**: **6.1%** [7] Risks - Downside risks to the target price include: 1. Variability in fab utilization and capital equipment orders, which are closely linked to stock price. 2. Competition from large peers in the semiconductor equipment industry, despite AMAT's market leadership in several sub-segments [10] Conclusion - Applied Materials Inc is navigating significant challenges due to geopolitical restrictions, particularly in China, while maintaining a positive outlook on growth in advanced packaging and display markets. The company is also managing operational costs and potential tariff impacts carefully.

Global Research ab 13 February 2025 First Read China OTA Sector Online travel channel checks: OTAs remain well positioned for travel market growth Domestic: Mixed trends of solid volume and persisting pricing pressure We recently conducted channel checks with multiple travel experts, where we discussed the China travel industry's 2025 outlook, OTA platforms' strategies and the competitive landscape. The experts believe the domestic travel trend of solid volume growth with pricing pressure during CNY is like ...

ANTA Sports | Asia Pacific Ability to Adapt Deserves Re- rating As a large and liquid stock, ANTA's ability to deliver earnings growth outperformance and commitment to shareholder returns make it a strong candidate for a consumer core holding. Its abundant capital resources, strong track record and organizational capabilities support further M&A. Key Takeaways Investment thesis: Investing in China sportswear hasn't been easy. The industry is subject to macro risks, with competition becoming more intense as ...

Summary of Key Takeaways from the Conference Call Industry Overview - **Industry**: China Financials & Property - **Date**: 14 February 2025 - **Research Firm**: J.P. Morgan Key Points on Financial Institutions 1. **Positive Outlook for Banks**: The research supports a positive view on Chinese banks, particularly yield stocks, as insurers and banks increase asset allocation into equities, favoring low-volatility products [1][6][9] 2. **Profit Growth Expectations**: State-Owned Enterprises (SOE) banks are committed to positive profit growth in 2025, driven by smaller Net Interest Margin (NIM) contraction, better fee growth, and moderate asset quality improvement [1][8] 3. **Loan Growth Caution**: Banks are cautious about accelerating loan growth due to uncertain macro growth outlook, with expectations for moderate rate cuts and loan growth in 2025 [6][8] 4. **Retail Client Sentiment**: Improving sentiment in the equities market among retail clients is noted, particularly benefiting China Merchants Bank (CMB) and Futu [1][6] 5. **Asset Quality Stability**: Banks expect stable or slightly improving asset quality in 2025, with some banks indicating a peak in Non-Performing Loan (NPL) formation in the property sector has passed [8][12] Key Points on Property Sector 1. **Constructive View on Developers**: The report maintains a constructive view on CR Mixc and recommends developers like CR Land and China Overseas Land & Investment (COLI) [1][13] 2. **Mixed Property Market Sentiment**: Banks report mixed sentiments in the property market, with some positive signs such as reduced early mortgage repayments, but also caution regarding the lack of incentives for de-stocking projects [12][13] 3. **Divergent Sales Performance**: In the Beijing property market, sales performance varies across districts, with a noted trend of upgrade demand outpacing first-home demand [12][13] Additional Insights 1. **Equity Investment by Insurers**: Insurers are increasing equity investments but face regulatory uncertainties regarding quantitative requirements for new premiums [10] 2. **Bancassurance Channel Recovery**: The contribution from the bancassurance channel has recovered to pre-agency fee cut levels, with SOE banks holding a significant market share [10] 3. **Futu's Positive Trends**: Futu Holdings reported robust improvements in operating trends and successful overseas market expansion, particularly in Japan and Malaysia [9] Conclusion The overall sentiment from the conference call indicates a cautiously optimistic outlook for the Chinese financial and property sectors, with banks focusing on maintaining profit growth and improving asset quality while navigating regulatory challenges and market uncertainties.

February 13, 2025 09:00 PM GMT China Equity Strategy | Asia Pacific A-Share Sentiment Improved with Strong AI Momentum A-share sentiment improved along with the strong Chinese AI momentum. However, performance divergence between Tech and non-Tech is striking as deflation pressure persists. Signposts for further bullishness center around geopolitical improvement, policy upside and faster AI adoption. A-share investor sentiment improved vs. prior cutoff date: Weighted MSASI and simple MSASI improved by 18ppt ...

Summary of the Aluminum Industry Research Call Industry Overview - The report focuses on the aluminum industry in China, specifically tracking high-frequency demand trends and inventory levels during the week of February 6 to February 12, 2025, following the Chinese New Year [1][8]. Key Points Production Data - Total aluminum production in China was 833,000 tons (kt), remaining flat week-over-week (WoW) but increasing by 3% year-over-year (YoY) and 3% YoY on the lunar calendar [2]. - Aluminum billet production reached 310 kt, marking a 16% increase WoW, 15% YoY, and 8% YoY on the lunar calendar [2]. Inventory Levels - Total aluminum ingot and billet inventory stood at 1,807 kt on February 13, 2025, which is a 7% increase WoW and a 10% increase YoY, remaining flat YoY on the lunar calendar [3]. - Social inventory was 1,098 kt, up 15% WoW and 20% YoY, while producers' inventory was 710 kt, down 4% WoW and 11% YoY [3]. - For aluminum ingots, total inventory was 1,014 kt, reflecting a 12% increase WoW and a 13% increase YoY [3]. - Aluminum billets had a total inventory of 793 kt, remaining flat WoW but increasing by 6% YoY [3]. Apparent Consumption - Overall aluminum apparent consumption was 739 kt, showing a significant 79% increase WoW and a 169% increase YoY, with a 7% increase YoY on the lunar calendar [4]. - Apparent consumption for aluminum ingots was 757 kt, increasing by 16% WoW but decreasing by 4% YoY on the lunar calendar, while aluminum billets saw apparent consumption of 292 kt, a 10-fold increase WoW and a 56% increase YoY [4]. Market Insights - The increase in aluminum inventory aligns with historical trends, indicating a cautious market expectation regarding demand recovery [5]. - The current inventory levels are higher than the same period in 2021 and 2024 but lower than the levels seen in 2022-2023 on the lunar calendar [5]. - The apparent consumption levels during this week were higher than the same periods in 2022-2024 on the lunar calendar, suggesting a potential recovery in demand [5]. Additional Considerations - The report emphasizes the importance of aluminum ingot and billet inventory data for calculating overall aluminum demand, as it encompasses a broader range of inventory types [5]. - The analysis is based on data from Mysteel, a consultancy specializing in the materials sector [1]. This summary encapsulates the critical insights from the aluminum industry research call, highlighting production, inventory, and consumption trends that are essential for understanding the current market dynamics.

Summary of Global Gas Research Conference Call Industry Overview - The report focuses on the **European gas storage** situation as of February 11, 2025, highlighting a significant decline in storage levels compared to historical averages and previous years [2][16]. - The **US gas market** is also discussed, with updates on underground storage and supply-demand dynamics [3]. Key Points and Arguments European Gas Storage - As of February 11, European gas storage was **47% full**, equating to **49 billion cubic meters (bcm)**, which is **5% below the 5-year average** and **20% lower than in 2024** [2]. - The rate of net withdrawals has accelerated to **-4.2 bcm**, up from **-2.1 bcm** a year ago and the 5-year average of **-3.7 bcm** [2]. - The estimated exit storage levels are projected to be in the **high-30s%**, compared to **58%** at the end of March 2024 and **41%** of the 5-year average [2]. - To meet the EU's storage target of **77%**, a minimum of **~155 bcm** of LNG is required, which is an increase of **17 bcm** year-over-year [2]. - Germany has requested exemptions from storage filling targets for the current year [2]. US Gas Market - The EIA reported a **100 Bcf** week-over-week decrease in underground storage, bringing total inventories to **2,297 Bcf**, which is **3% below the 5-year average** [3]. - Storage utilization in the US stands at **54%**, below the 5-year average of **56%** [3]. - The **Lower 48 supply** for 2025 has been upgraded to **112.5 Bcf/d**, while demand is raised to **113.2 Bcf/d**, indicating an average undersupply of **0.7 Bcf/d** in 2025 [3]. Price Dynamics - The Dutch TTF price dropped sharply by **7%** to the low-€50s/MWh, influenced by increased optimism regarding US-Russia talks [4]. - Despite the winter's end approaching, higher European gas prices are anticipated at around **€40**, compared to **€35** in 2024, due to increased refilling demand [4]. - US Henry Hub prices remain elevated at **$3.7/mmBtu**, with a revised price outlook for 2025 raised to **$3.61/mmBtu** from **$3.35/mmBtu** [4]. - Asian JKM prices have also risen to approximately **$15/mmBtu**, despite muted demand [4]. Storage Utilization and Targets - The report includes detailed figures on gas storage utilization levels across various EU countries, indicating current levels and targets for filling [16]. - The total EU storage level is currently at **49%**, with various countries having different intermediate and filling targets [16]. Additional Important Insights - The report emphasizes the challenges of storage injection over the summer due to lower current storage levels, necessitating increased LNG imports [2]. - The potential for voluntary storage targets among EU countries could mitigate forced buying impacts during the summer [4]. - The report highlights the ongoing volatility in oil and natural gas prices as a risk factor for investment in the sector [20]. This summary encapsulates the critical insights from the conference call, providing a comprehensive overview of the current state and outlook of the gas industry in both Europe and the US.

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the analysis of 93 global themes mapped across nearly 5000 listed companies, conducted by over 200 Citi Fundamental Analysts [1][6][7]. Core Themes and Rankings Most Attractive Themes - The top 10 most attractive themes have seen minimal changes, with the only notable shift being the replacement of Smart Grids by Feminine Health & Fem Tech, which improved its rank from 43rd to 10th due to better Momentum scores, particularly Estimates Momentum [2][9]. Least Attractive Themes - The least attractive themes are predominantly sustainability-oriented, including Green Mobility and Sustainable Materials. These themes rank low due to poor Quality and Momentum characteristics, with expectations of continued underperformance in the short to medium term [3][10]. Performance Metrics - Approximately one-third of the themes outperformed the MSCI World index. The portfolio of Top Themes increased by 3.5% in December, aligning with the MSCI World performance. The long/short strategy (top versus bottom themes) yielded a positive return of 1.42% [4][15]. Notable Performers - Top performers among the themes included: - Risky Business: +5.5% - Mobile Payments: +4.5% - Fintech: +4.6% - Cyber Security: +4.8% [4][24]. Changes in Fundamental Attractiveness - The Creator Economy theme saw the largest improvement, moving from 74th to 34th overall, with significant gains in Price Momentum and Estimates Momentum. Conversely, the Unlocking Value (Spin-offs) theme dropped from 16th to 48th [36][37]. Style-Based Theme Rankings - For value-focused investors, Biofuels and Pension Shortfalls ranked highly, while several healthcare-related themes remained at the bottom of the rankings [40][41]. Conclusion - The report provides a comprehensive overview of the current landscape of global themes, highlighting shifts in attractiveness and performance metrics that can guide investment decisions. The analysis indicates a mixed outlook for sustainability themes while emphasizing the strength of technology and finance-oriented themes [1][8][9].

Summary of the IEA Oil Market Update - February 2025 Industry Overview - **Industry**: Oil & Gas - **Region**: Asia-Pacific Key Points Demand and Supply Projections - Global oil demand for 2025 is projected at **104.0 million barrels per day (MMbls/d)**, an increase of **1.1 MMbls/d** from the previous year [2][9] - Non-OECD demand is expected to grow by **1.1 MMbls/d**, with China contributing an unchanged **0.2 MMbls/d** [2] Non-OPEC Supply Adjustments - Non-OPEC supply for 2025 has been revised down by **0.2 MMbls/d** to **71.6 MMbls/d**, reflecting a year-on-year increase of **1.4 MMbls/d** [3][11] - OECD supply remains unchanged at **32.7 MMbls/d**, with the US supply revised up by **0.1 MMbls/d** and Europe down by **0.1 MMbls/d** [3] OPEC Supply Dynamics - The call on OPEC crude for 2025 has increased by **0.2 MMbls/d** to **26.7 MMbls/d**, but is still **0.4 MMbls/d** lower than in 2024, indicating a potential oversupply [4][25] - Total effective spare capacity for OPEC is estimated at **6.0 MMbls/d**, which is **4.5%** of the projected demand for 2025 [4][22] Inventory Trends - OECD commercial inventories fell by **26 MMbls** in December, totaling **2,737 MMbls**, which is **41 MMbls** lower than a year ago and **139 MMbls** below the 5-year average [5][17] - January estimates suggest a further decline of **20 MMbls** in inventories [1] Refinery Throughput and Margins - Global refinery throughput is at **84.0 MMbls/d**, up **0.7 MMbls/d** year-on-year, but has been revised down to **83.3 MMbls/d** for 2025 [6] - Product margins have decreased by **US$0.5/bbl** to **US$4.0/bbl**, indicating ongoing challenges in the downstream sector [7] Investment Implications - The update presents an incrementally positive outlook for oil, despite the oversupply situation. Investors are advised to monitor inventory trends closely [25] - The potential resolution of the Russia-Ukraine conflict could negatively impact energy prices, particularly for gas and LNG, rather than oil [25] - A forecast price of **US$70/bbl** for Brent is anticipated due to market oversupply, with inventory builds being crucial for validating this outlook [25] Additional Insights - The report highlights the importance of geopolitical factors, such as the Russia-Ukraine conflict, and their potential impact on oil supply and pricing [25] - The unwinding of OPEC production cuts could lead to an increase in OPEC supply by **1 MMbls/d** by year-end, but this is contingent on demand dynamics [25] This summary encapsulates the essential findings and projections from the IEA Oil Market Update, providing a comprehensive overview of the current state and future outlook of the oil and gas industry in the Asia-Pacific region.