Summary of Conference Call Notes Industry Overview - **Industry**: Greater China Materials, specifically focusing on cobalt production and its market dynamics in the Democratic Republic of the Congo (DRC) [1][2] Key Points 1. **Cobalt Export Suspension**: The DRC has suspended cobalt exports for four months starting February 22, 2025, to address oversupply issues. The DRC produced approximately 70% of global cobalt in 2024 [2][7]. 2. **Impact on CMOC**: - CMOC produced 114,000 tons (kt) of cobalt in 2024 and plans to produce 110kt in 2025, all sourced from DRC operations. - Cobalt is estimated to contribute around 11% to CMOC's mining gross profit (GP) in 2024. - CMOC is expected to have approximately 40kt of cobalt inventory by the end of 2024, which may partially offset shipment volume losses during the export suspension. - If the ban is lifted on time, potential increases in cobalt prices could enhance CMOC's future sales [3][7]. 3. **Impact on Huayou**: - Huayou's annual cobalt production from its DRC mine is estimated to be only several thousand tons, resulting in minimal direct earnings impact from the suspension. - However, potential price increases in cobalt may positively affect Huayou's other cobalt-containing products, such as MHP and precursors [3][7]. Financial Projections and Risks 1. **CMOC Valuation**: - A discounted cash flow (DCF) model is used for CMOC, applying a weighted average cost of capital (WACC) of 8.0% with an assumed annual revenue growth of 2% beyond the explicit forecast period [8]. 2. **Huayou Valuation**: - Huayou's price target is derived from a DCF model with a WACC of 10.9% and a steady-state revenue growth rate of 2%, considering a slower penetration rate in ternary lithium-ion batteries compared to market expectations [9]. 3. **Risks**: - Upside risks include stronger-than-expected metal prices in 2025 and higher copper output beyond company guidance. - Downside risks involve weaker cobalt prices due to low demand from industrial sectors and domestic electric vehicles (EVs), as well as slower recovery in the global macroeconomy affecting other metal prices [12][15]. Additional Insights - The suspension of cobalt exports is a significant event that could reshape market dynamics, particularly for companies heavily reliant on DRC cobalt, such as CMOC and Huayou. - The potential for price hikes in cobalt and related products could create opportunities for companies to enhance profitability if managed effectively during the suspension period [3][7].

February 23, 2025 09:41 PM GMT China Equity Strategy | Asia Pacific Sector Allocation & Focus List Changes - Rotating from Defensive to Tech Adoption Upgrade Media&Ent, IT & Cons Disc, downgrade Materials, Energy, Telecom & Utilities on more positive stance on China equity given tech adoption and equity risk premium alleviation. Add Meitu, HKEX, Espressif and Alibaba to China/HK Focus List, and Espressif and Tuopu to A-share Thematic list. Following our China upgrade report (China Equity Strategy: Getting O ...

24 February 2025 REMD Michelle Kwok* Head of Asia Real Estate and HK Equity Research The Hongkong and Shanghai Banking Corporation Limited michellekwok@hsbc.com.hk +852 2996 6918 Oliver Yu* Analyst, Asia Real Estate The Hongkong and Shanghai Banking Corporation Limited oliver.y.o.x.yu@hsbc.com.hk +852 2288 2050 China Real Estate Equities 10 signs the market has bottomed China We highlight 10 signals that the China housing market has bottomed. Three years on, national new home sales have shrunk 48% vs the 20 ...

ab 24 February 2025 Global Research China Outlet Sector Can outlets continue to expand in China? 239 outlets in China in 2023; still less penetration than in the US | Stock Code | Company name | Close Price Market Cap | | EPS | | 24-26 EPS | | PE | | PEG | | PB | | ROE | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | （lc） US$ mn | 2024E | 2025E | 2026E | CAGR | 2024E | 2025E | | | | 2026E 2025E 2026E 2024E 2025E 2026E 2024E 2025E 2026E | | | ...

Summary of Semiconductor Capital Equipment Conference Call Industry Overview - The focus is on the Semiconductor Capital Equipment industry, specifically the Wafer Fabrication Equipment (WFE) segment - The WFE forecast for 2025 has been revised from $96 billion (down 6% year-over-year) to $99 billion (down 3%), and for 2026 from $101 billion (up 6%) to $103 billion (up 4%) [1][2][35] Key Insights - **NAND Market Dynamics**: - There is a tactical setup for NAND, but concerns about its durability due to end-market trends persist [1][35] - The revision in forecasts is primarily driven by NAND ($1 billion) and DRAM ($2 billion) adjustments [2][35] - Brownfield investments in NAND are occurring earlier than expected, leading to an increase in upgrade assumptions from $12 billion to $15 billion for 2025-2026 [3][41] - Major players like Samsung, Kioxia, and YMTC have resumed spending, which may drive near-term spending despite profitability concerns [3][46] - **DRAM Market Outlook**: - DRAM remains a contentious topic, with forecasts varying significantly among companies [4][29] - Some companies predict growth in DRAM WFE, while others forecast flat or declining trends [4][29] - The expectation is that 2025 will be a digestion year for DRAM after a record 2024, with a projected WFE of $25 billion [38][39] - **Company Forecast Divergence**: - Companies have differing forecasts for 2025 WFE, with TEL and Kokusai predicting flat growth, while LAM, KLA, and SCREEN expect moderate growth [28][29] - The consensus is that leading logic will see growth, trailing logic will decline, and NAND will increase [22][28] Additional Important Points - **Record Shipments**: - Q4 2024 saw stronger-than-expected shipments, with total Core-5 shipments reaching $21.7 billion, marking an 11% quarter-over-quarter increase and a 21% year-over-year increase [21][22] - NAND shipments from LAM, AMAT, and TEL totaled $1.11 billion, up 101% quarter-over-quarter and 63% year-over-year [22] - DRAM shipments reached $3.35 billion, up 35% quarter-over-quarter and 8% year-over-year [22] - **Geopolitical Factors**: - There is a noted decline in China’s contribution to Core-5 revenue, dropping from 40% to 32%, while South Korea's share increased from 15% to 22% [24][26] - **Future Considerations**: - The industry is unlikely to see significant greenfield investments outside of China during 2025-2026, with a focus on upgrades instead [39] - The competitive dynamics in NAND may lead to increased spending, potentially reigniting a layers race that could affect long-term industry health [46] This summary encapsulates the key points discussed in the conference call regarding the Semiconductor Capital Equipment industry, highlighting the current trends, forecasts, and potential risks.

Summary of Key Points from the Conference Call Industry and Company Involved - **Industry**: Global Economics and Strategy - **Companies**: BAE Systems, Mitsubishi Heavy Industries Core Insights and Arguments 1. **German Election Outcomes**: Preliminary results indicate a two-party coalition, with CDU/CSU, SPD, and Greens failing to secure a two-thirds majority for constitutional changes, potentially leading to market disappointment regarding fiscal stimulus [3][4] 2. **US Economic Indicators**: Anticipation of a benign US core PCE release, with a forecasted year-over-year decrease from 2.8% to 2.5% [4] 3. **Global Growth Forecast**: Expected slowdown in global growth for 2025/2026, primarily due to US tariffs on China, which may negatively impact an already struggling economy [7] 4. **Defence Spending in Europe**: EU Commission's suggestion to exempt defence spending from fiscal rules could lead to increased defence budgets, supporting a bullish outlook on European equities and non-US defence stocks [7] 5. **BAE Systems Valuation**: BAE faces risks including government defence budget uncertainties, contract execution capabilities, and political risks in Saudi Arabia, with approximately 40% of its business derived from North America [11] 6. **Mitsubishi Heavy Industries Risks**: Risks include sluggish capital expenditure due to economic downturns in major markets, rising costs, and yen appreciation [12] Additional Important Content 1. **Market Dynamics**: The report highlights the potential for fiscal easing in Germany and the implications of higher defence spending on market narratives, particularly for bond yields and equity spreads [3][7] 2. **Investment Ratings**: Both BAE Systems and Mitsubishi Heavy Industries are rated as "Buy," indicating positive expectations for their stock performance [26][33] 3. **Geopolitical Considerations**: The report emphasizes the need for increased self-reliance in European defence spending, with current EU spending at 2.0% of GDP compared to 3.4% in the US, suggesting a significant gap that needs to be addressed [7] 4. **Emerging Market Sentiment**: Optimism in China tech equities is noted, with MSCI China gaining 25% since mid-January, although the broader emerging market sentiment remains mixed [7] This summary encapsulates the critical insights and data points from the conference call, providing a comprehensive overview of the current economic landscape and specific company outlooks.

China (PRC) | Industrials Humanoid Robot – Expert Call Takeaways on DeepSeek Impact on Embodied AI We invited Victor Deng, former head of robot value chain investment at Kinzon Capital, on 18 Feb to share his knowledge about how DeepSeek is accelerating embodied AI development in the humanoid robot and potential value chain segment upon the breakthrough he sees in DeepSeek. See key takeaways below. Embodied AI critical to commercial value of humanoid robot: Embodied AI empowers humanoid robots with intellig ...

24 February 2025 | 7:18AM HKT The 720: China Autos, A vs. H shares, Miniso, Hengli downgrade, China Insurance, NetEase, Global growth vs. inflation/tariffs In Focus | China Autos China Autos - 4Q24E Preview: volume & margin improvement in 4Q24, with autopilot to be the focus in 2025. We preview 4Q24E results for our China auto OEMs coverage and roll forward our valuation by one year across the space. For this set of results, we expect investor focus to be on (1) Gross margin: the strong sales volume in 4Q s ...

V i e w p o i n t | 25 Feb 2025 05:26:19 ET │ 17 pages For DASH — while TKWY would help launch and accelerate new geographies, we believe DASH is more focused on organic international expansion (we note DASH has held talks with Deliveroo, per press reports (see here. Reuters, 25 June 2024) and we note the difficulty in competing in competitive markets with scaled logistics players (across the board). Not to mention a greater focus and attention on new vertical adoption (like grocery), in our view. Many prev ...

Flash | 23 Feb 2025 16:27:43 ET │ 13 pages Citi Research is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Certain products (not inconsistent with the author's published research) are ...