February 13, 2025 11:24 AM GMT India Economics | Asia Pacific EcoView: Tariff Tensions – Assessing the Impact on India Direct impact of reciprocal tariff hikes will likely be manageable; however, the indirect impact through uncertainty weighing on business confidence is more worrisome. Domestic policy will likely remain supportive of growth and incrementally more measures will be taken if downside risks emerge. In this month's EcoView, we look at how India is placed with regard to potential tariff hikes and ...

Summary of Key Points from Barclays Global Rates Markets Conference Call Industry Overview - The conference call focuses on the global rates markets, specifically discussing interest rates, duration, curve dynamics, swap spreads, inflation, and volatility across the US, Europe, and Japan [1][8]. Core Views and Arguments United States - **Duration and Curve**: A recommendation is made to maintain a 2yf2s10s curve-steepener strategy due to a flat forward curve. The uncertainty regarding the neutral rate complicates rate level predictions, but an upward sloping curve is anticipated in the forward space [3][7]. - **Swap Spreads**: The outlook for swap spreads is positive, influenced by potential looser bank regulations and favorable Treasury coupon sizes. Discussions about exempting USTs from the leverage ratio could enhance banks' balance sheet capacity to buy, benefiting spreads [7]. - **Inflation**: Recent data indicates moderation in wage gains, suggesting caution against extrapolating from CPI inflation surprises. A recommendation is made to go long on 2y USTs at an entry yield of 4.31%, as this could hedge against potential Fed easing due to economic deterioration [7]. Europe - **Curve Dynamics**: A 6m10y vs 2y10y calendar spread is maintained to express a view on range-bound near-term rates, while a long 20y10y + 10y10y versus 10y20y option triangle is recommended to benefit from dis-inversion in the forward vol surface [12]. - **EGBs**: The expectation is for continued tailwinds for periphery-core spread compression in EGBs, with ECB rate cuts and upward rating trajectories for peripheral sovereigns. Long positions in 10y Spain vs. France are held, while shorts in 10y Belgium on ASW are maintained [12]. Japan - **Duration and Volatility**: The expectation is for 10y JGB yields to rise gradually in 2025, driven by term premium. The risks include changes in expectations for the neutral rate and US yield trends. The outlook for interest rate volatility is stable, as the BoJ's policy normalization is not expected to lead to significant volatility [19]. Other Important Insights - **Market Conditions**: Heavy bill issuance in January has led to higher overnight repo rates, but a reduction in bill supply is expected as the Treasury spends down its cash balance ahead of quarter-end [12]. - **Debt Ceiling**: There is uncertainty regarding Congress's approach to raising the debt ceiling, with expectations that it may not be increased until mid-year [12]. - **Inflation Risks**: In Europe, medium-term risks are tilted towards lower ECB terminal rate pricing, influenced by potential tariffs and inflation undershooting [12]. This summary encapsulates the key insights and recommendations from the Barclays Global Rates Markets conference call, providing a comprehensive overview of the current state and expectations for interest rates across major economies.

Summary of Key Takeaways from the 2025 AHR Expo Industry Overview - The report focuses on the HVAC (Heating, Ventilation, and Air Conditioning) industry, particularly the transition to A2L refrigerants and the impact on major players in the market, including Lennox International Inc. (LII) [1][2]. Core Insights 1. **Pricing Discipline During A2L Transition**: Pricing is expected to remain disciplined as the industry transitions to A2L refrigerants, which are more environmentally friendly [1]. 2. **OEM Performance Variability**: Original Equipment Manufacturers (OEMs) and suppliers have varied capabilities in managing the A2L transition, with some performing better than others [1]. 3. **Positioning of US HVAC OEMs**: Large US HVAC OEMs are well-positioned to benefit from upcoming Mega project investments in the US [1]. Company-Specific Insights: Lennox International Inc. (LII) 1. **Market Positioning**: LII is recovering from past challenges and is strategically positioned to expand its market share, particularly in national accounts and emergency replacement markets [2]. 2. **Product Showcase**: Key products highlighted include: - **Model L Series**: A 20-ton unit with the lowest cost of ownership in the industry, popular among K-12 institutions. - **Enlight Rooftop Series**: A 10-ton unit with dual fuel options experiencing over 50% growth last year. - **Xion**: A product aimed at reclaiming market share in the emergency replacement market [2][5]. 3. **Transition to New Refrigerants**: LII plans to phase out 410A units by Q1 2025 and transition to 454B in Q2, which is expected to positively impact pricing and product mix [5]. 4. **National Accounts and Capacity Constraints**: Only two national accounts have secured the new A2L Model L product due to capacity constraints, but this is expected to ramp up in the second half of the year [5]. 5. **Emergency Replacement Market**: LII currently holds less than 5% of the emergency replacement market, with ambitions to grow to mid to high-teens percentage over the next three years [5]. Financial Outlook - **Price Target**: The 12-month price target for LII is set at $716, reflecting a 23% implied upside based on a valuation of 20.5 times projected EBITDA [2][5]. Key Risks 1. **Residential Replacement Demand**: A potential slowdown in residential replacement demand could impact growth [6]. 2. **Commercial Market Softness**: Tighter credit conditions may lead to softness in the commercial market [6]. 3. **Refrigerant Pricing Realization**: There is a risk that pricing realization on the refrigerant change may not fully materialize [6]. Additional Considerations - The report emphasizes the importance of logistics in the emergency replacement market, noting that fast quoting and quick delivery are critical for success [5]. This summary encapsulates the key points from the conference call, focusing on the HVAC industry dynamics and Lennox International's strategic positioning and outlook.

Summary of Yili Industrial (600887.SS) Conference Call Company Overview - **Company**: Yili Industrial - **Stock Code**: 600887.SS - **Date of Call**: 13 February 2025 Key Highlights Industry and Market Updates 1. **Lunar New Year (LNY) Sales**: Yili's retail sales during LNY showed stable year-over-year (yoy) performance, aligning with expectations despite a high base from the previous year. This stability is attributed to healthy channel inventory levels, proactive promotional actions, and stable pricing with less promotion compared to the previous year [1][2] 2. **2025 Demand Outlook**: Management maintains a cautious outlook for 2025, expecting steady sales in the liquid milk segment and positive growth in the infant milk formula (IMF) segment, targeting a 2 percentage point market share gain per annum [1][2] 3. **Channel Inventory**: The company reported a healthy channel inventory level, which is expected to support a potential recovery in sell-in trends for liquid milk [1] Financial Performance and Projections 1. **Margin Targets**: Yili reiterated its target of a 9% net profit margin (NPM) for 2025, driven by lower selling expense ratios and reduced raw milk inventory impairment losses. The company anticipates stabilization in raw milk prices in the first half of 2025, with potential improvements in the second half [1][11] 2. **Shareholder Returns**: The management confirmed that the 2024 dividend per share (DPS) will not be lower than that of 2023, implying a minimum dividend yield of 4.4% for 2024. Additionally, a share buyback program of up to RMB 2 billion is planned, indicating a total shareholder return of at least 5.6% [1] Product and Segment Insights 1. **Liquid Milk Segment**: The company expects stable sales in the liquid milk category, supported by healthy inventory levels and rational promotions. New product development and strategic channel introductions are planned for the second half of 2024 [1][13] 2. **Infant Milk Formula (IMF)**: Yili aims for a 2 percentage point market share gain in the IMF segment, building on a solid performance in 2024 [1][13] 3. **Non-Dairy Business**: Although a small contributor, Yili's freshly brewed tea segment showed strong growth, with plans for increased channel penetration in 2025 [1][13] Risks and Challenges 1. **Market Risks**: Key risks include slower-than-expected demand for premium liquid milk, a slower recovery in dairy demand, and intensified competition within the industry [14] Financial Metrics - **Market Capitalization**: RMB 173.7 billion / $23.8 billion - **Revenue Projections**: Expected revenue for 2025 is RMB 120.5 billion, with a projected EBITDA of RMB 16.67 billion [15] Conclusion Yili Industrial is positioned for cautious growth in 2025, with stable sales expectations across its key segments and a focus on maintaining shareholder returns. The company is actively managing its inventory and promotional strategies to align with market conditions while navigating potential risks in the competitive landscape.

Summary of Hua Hong Semiconductor Ltd Conference Call Company Overview - **Company**: Hua Hong Semiconductor Ltd - **Industry**: Technology Semiconductors - **Market Cap**: US$5,017 million - **Stock Rating**: Overweight - **Price Target**: HK$28.00 - **Current Price**: HK$26.30 Key Financial Highlights - **4Q24 Financial Results**: - Revenue: US$539 million, up 2% Q/Q and 18% Y/Y - Gross Margin (GM): 11.4%, in line with guidance - Overall Utilization Rate (UTR): 103%, down 2% Q/Q due to fluctuations in CIS volume [2][3] - **1Q25 Guidance**: - Revenue expected between US$530-550 million, indicating a decrease of 2% to an increase of 2% Q/Q - GM projected at 9-11%, softer than previous guidance due to pricing pressure in the discrete business [3][4] - **2025 Outlook**: - Management anticipates a 10% Y/Y growth in top line - Focus on margin improvement as a priority for the management team [4] Operational Insights - **New Fab Development**: - The new 12-inch fab in Wuxi is set to ramp up capacity to 40kwpm by mid-2025, with full capacity of 83kwpm expected by mid-2026 - Additional depreciation costs estimated at US$173-180 million in 2025, which may impact GM if ASP recovery is slower than anticipated [4] - **Collaboration with Global IDMs**: - Partnerships with companies like ST Micro and Infineon are expected to enhance GM throughout the year - Management aims to achieve a GM of over 20% within 1-1.5 years [3] Risks and Considerations - **Potential Risks**: - Pricing pressure in the discrete business could continue to affect GM - Slow scaling of the Wuxi fab or challenges in acquiring new customers may hinder growth [10] - **Market Dynamics**: - The company is monitoring the competitive landscape, particularly regarding local customers gaining market share and aggressive capacity expansions by other Chinese players [10] Valuation Metrics - **EPS Forecast**: - 2025 EPS expected at US$0.13, with a prior estimate of US$0.12 - P/E ratio projected to decrease from 39.5 in 2024 to 26.0 in 2025 [5] - **Revenue Projections**: - Revenue expected to increase from US$2,001 million in 2024 to US$2,508 million in 2025 [5] Conclusion Hua Hong Semiconductor Ltd is positioned for moderate growth in 2025, with a focus on improving margins and expanding operational capacity. However, the company faces challenges from pricing pressures and competitive dynamics in the semiconductor industry. The management's strategic collaborations and new fab developments are critical to achieving their financial targets.

Summary of Conference Call on China Property Sector Industry Overview - The conference call focused on the **China Property** sector, particularly the tier-1 cities including **Shenzhen**, **Guangzhou**, **Beijing**, and **Shanghai** [1][30]. Key Points and Arguments 1. **Home Purchase Restrictions (HPR) Easing**: - Guangzhou was the first tier-1 city to fully relax HPRs in 2024, with expectations that Shenzhen and other tier-1 cities may follow in 2025 [1]. - Potential further HPR relaxation in Shenzhen is anticipated, which could stabilize the market due to a higher migrant population and lower average housing GFA per capita compared to the national average [1][31]. 2. **Market Stabilization and Recovery**: - The property sector is at the lower end of its trading range, suggesting a potential rebound in valuations [2]. - Ongoing policy easing, including funding support and possible RRR cuts, could improve price stabilization and boost market confidence [2]. 3. **Sales and Inventory Analysis**: - Coverage developers have an average of **15%** saleable land bank exposure to tier-1 cities, with leading companies like COLI, CMSK, and CRL having an average of **27%** [2]. - Inventory levels in tier-1 cities are currently at an average of **19 months**, which is lower than the **80-cities average of 27 months** [13][16]. 4. **Demographics and Housing Demand**: - Nearly **50%** of residents in tier-1 cities do not have Hukou registration, indicating a significant rental market and pent-up demand that could be unlocked with HPR relaxation [5]. - The average housing GFA per capita in tier-1 cities is **25%** below the national average, further supporting the case for demand recovery [5]. 5. **Price Trends**: - Property prices in tier-1 cities have dropped by **5% to 11%** from their peak, with some reports indicating a **30%** decline in secondary property prices [11]. - The total home cost index has returned to levels comparable to **2H16**, driven by price declines and mortgage rate cuts [12]. 6. **Sales Performance**: - Tier-1 cities showed varied sales performance in January 2025, with Shenzhen outperforming while Beijing and Shanghai lagged [18]. - The secondary market price index in tier-1 cities is stabilizing, indicating a potential recovery trend [18]. 7. **Investment Recommendations**: - Recommended stocks include COLI, CRL, Greentown, and Longfor, with a focus on positioning ahead of policy momentum and market recovery [2][27]. Additional Important Insights - The conference highlighted the importance of demographic factors in driving housing demand, particularly in high-tier cities where rental markets are significant [5]. - The potential for further HPR relaxation could lead to a more robust recovery in the property market, especially for non-local residents [31]. - The analysis of inventory levels suggests that while current levels are manageable, they are indicative of a market that is still adjusting from previous downturns [13][16]. This summary encapsulates the critical insights and data points discussed during the conference call, providing a comprehensive overview of the current state and outlook of the China Property sector.

February 13, 2025 10:58 AM GMT Multi-Industry | North America CoTD: Still Following the Money Chart of the Day (CoTD) highlights charts that tie into latest investor conversations, are timely for the macro + company events, or just ones that we find interesting. Exhibit 1: We view the YoY change in US M2 Money Supply (+12mo) as the top leading indicator for Industrial Orders – the relationship signals further order strength into YE'25 Source: Morgan Stanley Research, FactSet As discussed in our Q3'24 Attrac ...

Summary of Wanhua Chemical Conference Call Company Overview - **Company**: Wanhua Chemical (Ticker: 600309.SS) - **Industry**: China Energy & Chemicals - **Market Cap**: Rmb224,335 million - **Current Share Price**: Rmb71.45 (as of February 12, 2025) - **Price Target**: Rmb74.00, implying a 4% upside from the current price [5][8] Key Points and Arguments 1. **Share Price Movement**: Wanhua's share price increased by approximately 3% following news about potential funding from China to help Vanke repay debt, which aligns with the performance of construction material companies in China [1][2] 2. **Investor Perception**: There is a prevailing view among investors that Wanhua is primarily a proxy for the domestic property completion cycle. However, the company’s recent growth in the polyurethane business has been significantly influenced by exports, domestic stimulus policies, and new applications in environmentally friendly construction materials [3][4] 3. **Financial Projections**: - **Revenue Growth**: Expected revenue growth from Rmb175,361 million in FY 2023 to Rmb227,820 million by FY 2026 [5] - **EBITDA Growth**: Projected EBITDA to increase from Rmb30,734 million in FY 2023 to Rmb42,423 million by FY 2026 [5] - **Earnings Per Share (EPS)**: EPS forecasted to rise from Rmb5.36 in FY 2023 to Rmb5.96 in FY 2026 [5] 4. **Valuation Methodology**: The price target of Rmb74 is based on applying a target multiple of 15x to the estimated EPS for 2025, which is consistent with mid-to-low cycle MDI valuation multiples [8] 5. **Market Position**: Wanhua is recognized for its strengthening market power in MDI (Methylene Diphenyl Diisocyanate), despite a decline in ROE (Return on Equity) below historical lows [8] Risks Identified - **Upside Risks**: - Potential price hikes in MDI - Improvement in petrochemical spreads - Timely penetration of new products [10] - **Downside Risks**: - Possible MDI price drops due to tariff risks and weakening demand - Oversupply issues in commodity chemical products - Delayed earnings contributions from specialty chemical products [10] Additional Insights - **Stock Rating**: The stock is rated as Equal-weight, indicating that its expected total return is in line with the average total return of the industry [5][24] - **Historical Performance**: The share price has fluctuated between Rmb100.40 and Rmb65.45 over the past 52 weeks, indicating volatility in the stock [5] This summary encapsulates the essential insights from the conference call regarding Wanhua Chemical, highlighting its market performance, financial outlook, and associated risks.

Summary of Restaurant Brands International Conference Call Company Overview - **Company**: Restaurant Brands International, Inc. (Ticker: QSR) - **Industry**: Quick-Service Restaurants (QSR) - **Market Cap**: $30 billion - **System Sales**: Over $40 billion with more than 30,000 restaurants globally [20][21] Key Points and Arguments Financial Performance - **4Q Sales & EBITDA**: Approximately inline with expectations despite mixed same-store sales (SSS) and unit performance, with potential upside to company margins and lower general & administrative (G&A) expenses offset by lower international franchise margins due to bad debt [1] - **Tim Hortons Canada SSS**: Reported at 2.5%, slightly below consensus of 2.7%, but positive traffic remains encouraging, particularly in breakfast and afternoon segments [2] - **Burger King (BK) and Popeyes (PLK) SSS**: BK US SSS at 1.5% vs. consensus of 1.2%, while PLK US SSS at 0.1% vs. consensus of -0.7%, benefiting from value offerings [3] Growth and Development - **Global Development**: Company added 600 net new units, with Tim Hortons showing strong growth while international openings, particularly at BK, were soft. Uncertainty remains regarding unit growth in China due to pending franchisee issues [4] - **Unit Growth Estimates**: Adjusted 2025/2026 unit growth estimates to 3.8% and 4.8% respectively, down from previous estimates [5] Earnings Estimates - **EBITDA Estimates**: Lowered 2025/2026 EBITDA estimates due to lower unit growth and SSS, alongside foreign exchange headwinds [5] - **Price Target**: Maintained a price target of $67 based on 15x 2025 EBITDA, reflecting a balanced risk/reward profile [11][21] Market Conditions and Risks - **Domestic Backdrop**: Remains challenging, but multiple drivers and potential tailwinds could offset risks through 2025 [5] - **China Market Risks**: Ongoing challenges in China could impact the company's long-term growth trajectory, with a return to 5% growth potentially delayed beyond 2026 [4][5] Sustainability and Operational Focus - **Sustainability Goals**: Company aims to recycle guest packaging globally by 2025 and reduce Scope 1 & 2 emissions by 50% by 2030, with a target of net zero by 2050 [15] - **Operational Improvements**: Focus on enhancing drive-thru times and overall guest experience, with new initiatives in service speed and product innovation [2][14] Analyst Insights - **Investment Thesis**: While optimistic about long-term competitive positioning and unit growth potential, the path to recovery is slower than expected, leading to a hold recommendation [11][21] - **SSS Drivers**: Key drivers include investments in BK, product innovation, and effective marketing strategies across all brands [15] Additional Important Information - **Earnings Projections**: Adjusted EPS for 2025 projected at $3.74, with a range of scenarios indicating potential upside to $78 or downside to $57 based on SSS performance [13] - **Market Trends**: Broader trends in SSS and unit growth will significantly influence the company's performance and valuation moving forward [21] This summary encapsulates the critical insights from the conference call, highlighting the financial performance, growth strategies, market conditions, and sustainability initiatives of Restaurant Brands International.

V i e w p o i n t | 13 Feb 2025 16:02:30 ET │ 14 pages Intel Corp (INTC.O) Stock Up 24% On Reports of TSMC Tie Up. A Few Reasons Why It Likely Won't Work. Intel Should Give Up Merchant Foundry. CITI'S TAKE Recently several news outlets (WSJ, Feb 12) have reported that a report issued by a competitor sparked speculation that Intel is in talks with TSMC to form some sort of JV where TSMC "helps out" Intel's merchant foundry business with supplying engineers and other technical know-how to enable Intel's found ...