Price Target BABA 104.00 USD 9988.HK 102.00 HKD Alibaba Q3: All-In on AI AI-libaba? Alibaba's Q3 results were solid… though probably a sideshow compared with guidance for massive AI-related capex, Cloud revenue acceleration "driven by AI", and pursuit of AGI(!). Group revenue of RMB280bn was in-line with our estimate, and slightly ahead of consensus (RMB281bn and RMB277bn), while RMB54.9bn of adjusted EBITA split our estimate and consensus (RMB56.5bn and RMB53.6bn). 9.4% CMR growth (to RMB101bn) was slightl ...

Summary of Key Points from the Conference Call Industry Overview - **Industry**: IT Hardware, specifically focusing on the App Store and smartphone demand, particularly iPhone and notebook builds in North America. Core Insights and Arguments 1. **App Store Revenue Growth**: - App Store net revenues are growing at 9.3% year-over-year (Y/Y) month-to-date (MTD) as of February 17, 2025, which is a deceleration from January's growth of 18% Y/Y, attributed to tougher year-over-year comparisons [2][1] - Major markets like China (+5.2% Y/Y MTD), Japan (+13.3% Y/Y MTD), and the US (+6.6% Y/Y MTD) are all experiencing deceleration compared to January [2][1] - Gaming revenue is declining by 1% Y/Y MTD, contrasting with a 14% growth in January, while non-gaming revenue is growing at 22% Y/Y MTD, indicating a shift in consumer spending [2][1] 2. **iPhone Build Forecast**: - The forecast for C1Q25 iPhone builds remains unchanged at 48 million units, flat Y/Y, with an expected shipment of 51 million units, aligning closely with the forecast of 50.5 million units [3][1] - Emerging tailwinds for iPhone demand include increased visibility at the assembly side and national subsidies in China, which may lead to upward revisions in iPhone builds [3][1] 3. **Notebook ODM Builds**: - Notebook ODM builds for C1Q25 are projected at 28.9 million units, reflecting a 1% Y/Y increase, which is 9 points above normal March quarter seasonality [10][1] - This translates to an expected 42.8 million notebook shipments, slightly above the current forecast of 42.5 million units [10][1] 4. **Cloud Capex Tracker**: - The Cloud Capex Tracker indicates a consistent 32% Y/Y growth for calendar year 2025, unchanged from previous forecasts [8][1] 5. **Apple Retail Store Status**: - As of February 19, 2025, 522 out of 525 Apple retail stores are open globally, indicating a 99% operational rate [45][1] Additional Important Insights 1. **Consumer Electronics Engagement**: - There is a notable bifurcation in consumer hardware engagement, with Garmin's MAUs growing by 21% Y/Y, while GoPro, Sonos, and Cricut are seeing declines in MAUs, indicating challenges in the consumer electronics sector [10][1] 2. **Job Postings in Consulting**: - IBM Consulting job postings have shown a recent uptick, but overall postings are still down 32% from the end of the previous quarter, suggesting a cautious outlook for consulting revenue [10][1] 3. **Taiwan Suppliers Monthly Sales**: - Sales at Apple's Taiwanese supply chain partners grew by 14.5% Y/Y in January, although this is below the trailing two-year historical seasonality for the month [28][1] 4. **iPad Build Estimates**: - The forecast for iPad builds in March is estimated at 9.5 million units, which is a 17% Y/Y decline [38][1] 5. **Lead Time Tracking for iPhones**: - Lead times for the iPhone 16 series are comparable to previous models, indicating stable demand post-launch [60][1] This summary encapsulates the key points from the conference call, highlighting the current state of the IT hardware industry, particularly focusing on Apple's performance and market dynamics.

ab 20 February 2025 Powered by YES UBS Evidence Lab Global Research China 360 The rise of solo living; who gains? Recent data highlights the demographic challenges China is facing China saw 9.54m births in 2024, vs. 9.02m in 2023, likely due to COVID and a Dragon Year boost, but the overall population fell for the third year in a row and new marriages dropped to new low (6.1m). Against this backdrop, we expect single-person households - the fastest-growing type of household - to keep increasing. This shift ...

J P M O R G A N Asia Pacific Equity Research 20 February 2025 Taiwan Humanoid Robot Supply Chain Exploring supply chain opportunities: prefer BizLink, Sinbon over HiWin Our analysis indicates the Taiwan humanoid robot supply chain is positioned to manufacture components, primarily cable (BizLink, Sinbon), and reducer (HiWin). For current projects, BizLink and Sinbon are developing cable for US clients and Sinbon is set to begin small-volume production in 2025, with further ramp up expected in 2026. However, ...

20 February 2025 Global Semiconductors & Hardware China Smartphone Tracker (Dec 2024): Stimulus helping demand & especially Chinese OEMs Mark Li +852 2918 5752 mark.li@bernsteinsg.com Stacy A. Rasgon, Ph.D. +1 212 756 4403 stacy.rasgon@bernsteinsg.com Sara Russo +44 207 544 1792 sara.russo@bernsteinsg.com Aleksander Peterc +33 1 57 29 45 25 aleksander.peterc@bernsteinsg.com Arpad von Nemes +1 212 969 1518 arpad.vonnemes@bernsteinsg.com Please download our smartphone monthly tracker data from here. Dec shipm ...

20 February 2025 | 1:55PM HKT China Battery ESS New policies clearing a pathway for future growth, we contextualize near-term implications; Buy CATL (on CL) In the past two weeks, two impactful policies that we think should help clear the pathway for BESS growth have been released. 1. Independent BESS business models are now one step closer to maturity The new policy allows power prices to float in a broader range, which we believe enriches the arbitrage opportunities for BESS - the key driver in our BESS b ...

Summary of Chinese Internet Data Centre Sector Conference Call Industry Overview - The focus is on the Chinese Internet Data Centre (IDC) sector, which is currently undervalued compared to global peers despite higher project returns and EBITDA growth [3][4] - Chinese IDC companies achieved an average return of 13% in 2023, projected to rise to 15% by 2026, driven by AI-related demand [4][11] - The sector is expected to record a 20% CAGR in EBITDA from 2024 to 2026, outpacing the global average of 11% [4][11] Key Insights - **Valuation Discrepancy**: Chinese IDC firms are trading at a 25% EV/EBITDA discount compared to global peers, despite superior growth and returns [4][11] - **Hyperscaler Demand**: There is higher order certainty from hyperscalers, with demand driven by internal AI workloads rather than indirect cloud client demand [5][11] - **Emerging Hubs**: Inner Mongolia is identified as a new IDC hub due to low power tariffs and acceptable latency, with low vacancy rates and pre-committed projects from hyperscalers [6][11] Investment Recommendations - **Top Picks**: VNET, GDS, and Aofei are highlighted as top investment picks due to their potential for new order wins and upcoming REIT launches [3][7] - **Price Targets**: Price targets for VNET raised to $25.00 (92% upside), GDS to $66.00 (53% upside), and Aofei to Rmb28.10 (41% upside) [8][29][30][31] Financial Metrics - **VNET**: Expected EBITDA growth of 18% in 2025 and 26% in 2026, with a price target based on 18x 2026E EV/EBITDA [29] - **GDS**: Anticipated EBITDA growth of 12% in 2025 and 14% in 2026, with a price target based on 17x 2026E EV/EBITDA [30] - **Aofei**: Projected to achieve a 20%+ EBITDA CAGR from 2024-2026, with a price target of 25x 2026E EV/EBITDA [31] Market Dynamics - **AI Demand**: The launch of DeepSeek is expected to increase demand for AI training and inference, leading to a more diversified customer portfolio for IDC operators [38][41] - **Utilization Rates**: The industry utilization rate is projected to improve, with third-party IDC revenue growth expected to reaccelerate to 10-20% in 2025/26E [45][62] Risks and Considerations - **Leverage Risks**: The potential launch of REITs in 2025 may help diversify funding options and mitigate excessive leverage risks due to growth ambitions [6][11] - **Market Competition**: The IDC sector is experiencing increased competition, particularly from hyperscalers' in-house capacity, which could impact pricing and margins [41][45] Conclusion - The Chinese IDC sector presents a distinct opportunity for re-evaluation, with strong growth prospects driven by AI demand and favorable market dynamics. The current undervaluation compared to global peers suggests potential for significant upside in selected stocks.

Globalizer | The Globalizer A "Made in China 2025" Rally? You're reading the Globalizer, offering a recap of Citi's leading research and highlighting key topics. This week, we explain why we expect a "Made in China 2025" rally. We explore our golden rules for investing in European telecoms. Plus more insights from the week at Citi. Bearing Fruits from "Made in China in 2025" Macro-to-Micro The HSII has surged 37% from its January trough, spurred by AI and DeepSeek catalysts as well as Xi's meeting with tech ...

Summary of J.P. Morgan's Global Commodities Research Call Industry Overview - **Industry**: Oil Markets - **Date**: February 20, 2025 Key Points and Arguments U.S.-Iran Relations and Oil Production - The U.S. and Iran have a long history of escalating tensions, particularly since the Islamic Revolution, impacting oil prices and the U.S. economy [2][3] - The Biden administration initially relaxed sanctions on Iran due to high energy prices but faced criticism from Trump, who advocated for a return to strict sanctions [9][12] - Iranian crude oil exports increased from 400 thousand barrels per day (kbd) in 2020 to over 1.6 million barrels per day (mbd) in 2024 [9] - Forecasts suggest Iranian crude production will remain flat at 3.1 mbd in 2025, unchanged from 2024 levels [8] JCPOA and Future Negotiations - The Joint Comprehensive Plan of Action (JCPOA) is set to expire in October 2025, raising questions about future agreements [8][11] - Both the U.S. and Iran have signaled a willingness to negotiate, with potential for a new nuclear agreement [11][15] - Trump's administration may disrupt up to 1 mbd of Iranian oil flows through sanctions targeting Chinese terminals and state-owned enterprises [9] Economic Conditions in Iran - Iran is facing severe economic challenges, including high inflation rates between 30-55% annually and significant currency depreciation [12] - The Iranian government, under President Masoud Pezeshkian, is seeking to stabilize the economy and re-engage with the West for sanctions relief [15] Geopolitical Shifts in the Gulf - Saudi Arabia and the UAE have shifted their approach to Iran, engaging diplomatically amid doubts about U.S. security commitments [26][28] - The rapprochement between Saudi Arabia and Iran, brokered by China, is significant for regional stability and economic transformation [28][29] Inflation and Economic Impact - U.S. inflation has rebounded, complicating the economic landscape for the Trump administration, which may affect oil prices and sanctions strategy [30][32] - The cost of living crisis could exacerbate inflation through higher oil prices, impacting Trump's priorities [32] Oil Supply and Demand Forecasts - Global oil demand is projected to increase, with total oil demand expected to reach 104.0 mbd in 2025 [41] - Total oil supply is forecasted to be 105.3 mbd in 2025, indicating a potential oversupply situation [41] Price Forecasts - J.P. Morgan forecasts Brent crude prices to average $73 per barrel in 2025, with WTI prices averaging $69 per barrel [47] Additional Important Content - The geopolitical landscape is changing, with the potential for new alliances and shifts in oil supply dynamics as countries in the Gulf pursue economic diversification [27][29] - The impact of sanctions and negotiations on oil exports will be closely monitored, as the situation evolves with the upcoming U.S. elections and international diplomatic efforts [22][24]

February 20, 2025 12:37 PM GMT WeiChai Power | Asia Pacific Data NOW: Weichai's Share Price vs. LNG HDT Sales in Jan- 25 China's LNG heavy-duty truck (HDT) sales were up 21% y-y (-20% m-m) to 7.7k units in Jan-25, with penetration expanding 7ppt y-y to 16% (vs. 9% in Jan-24). This was attributed to a widening LNG/diesel price gap (Rmb3,148/t in Jan-25 vs. Rmb2,520/t in Jan-24 and Rmb3,009/t in 2024, according to CEIC data). Exhibit 1: LNG HDT Sales vs. Weichai H-share Price Performance -5,000 0 5,000 10,000 ...