ab 20 February 2025 Global Research Figure 1: OEM comps table Stock implications China Auto Sector Thinking long - five debates on long-term outlook We are more optimistic than consensus on Chinese carmakers' ability to innovate and we even see their product competitiveness surpassing western leader Tesla. Fierce market competition, a robust industry ecosystem, and fast response to technology trends, have pushed Chinese carmakers to the frontier of global innovation, in addition to their absolute cost advan ...

Asia Pacific Equity Research 20 February 2025 Correction (See disclosures for details) BYD- H&A Lift PTs to HK$600/Rmb560 on expectations that BYD will become the 'Toyota' of the global EV marketplace Share price strength set to continue: We have spoken to nearly 200 investors over the past one week on calls and in meetings following placing BYD on Positive Catalyst Watch on 7 Feb (here) and the company's reverse roadshow where we had the chance to test drive BYD's latest models (here). All in all, we belie ...

A c t i o n | 20 Feb 2025 16:33:13 ET │ 22 pages Alibaba Group Holding Stepped-up Capex Spend to Capture AI & Cloud Inflection Growth CITI'S TAKE FY3Q25 result marks a pivotal change of sentiment with CMR reaccelerated to +9% yoy and TTG EBITA returned to positive 2% yoy growth, AIDC targets to turn quarterly profitable in FY2026 and stepped-up capex investment to capture the inflection point of AI transformation era. Being the Asia No. 1 and world No. 4 cloud service provider and having developed the propr ...

February 20, 2025 01:13 AM GMT China Express | Asia Pacific Market Analysis for January 2025 Key Takeaways Volume – All players achieved YoY growth despite an earlier CNY; STO replaced Yunda to be industry No.3: SF outperformed with 16% YoY volume growth thanks to more stable service during CNY, in our view. STO outperformed Tongda peers with 12% YoY volume growth, replacing Yunda to be the third-largest player in China express industry. Yunda underperformed with 3% YoY volume growth. YTO's volume grew 6% Y ...

Equity Research China Technology 20 February 2025 China Technology CBO - China Brief Overnight - 2/20/2025 DeepSeek denies speculation that it is considering outside funding; Five ministries issue three-year plan to promote consumption of automobiles, electronic products and home appliances; BYD was the best-selling EV brand in major Latin American markets in 2024 Our daily product rounds up key stories from the Chinese language media overnight, focusing on developments in the technology space. See our late ...

Flash | 20 Feb 2025 10:55:55 ET │ 11 pages China Battery Materials Lithium into 3rd week of Feb – Looming pressure on ASP amid rising inventory CITI'S TAKE Lithium prices surprisingly remained largely flattish WoW last week, hovering at ~Rmb76k/t for battery-grade, even as we saw the supply was scheduled to come back online as expected (+17% WoW). We believe the transactions in the spot market should be limited, and downstream players are holding a wait-and-see attitude, evidenced by (1) downstream inventor ...

Summary of Key Points from the Conference Call Industry Overview - The focus is on the small-cap perspective in tech-related subindustries, particularly semiconductor-related companies [3][4] - The overall industry view is categorized as "In-Line" by Morgan Stanley MUFG Securities [1] Semiconductor Industry Insights - There is no change in earnings growth trends at semiconductor testing and cutting-edge package companies [5] - Orders for electrical power equipment have been increasing due to production capacity constraints and future delivery projects, with demand driven by the replacement of aging equipment, renewable energy, data centers, and power grid battery systems [7] - The market for front-end semiconductor processing equipment (SPE) is dull in 2025, with risks including a slowdown in China and ongoing adjustments in SPE for power chips [8] - Strong demand for high-bandwidth memory (HBM) in DRAM SPE is noted, but a cautious outlook is maintained for commodity DRAM [8] - A recovery in NAND is observed after a prolonged downturn, with advancements in cryogenic etching and hybrid bonding technologies [8] - Demand for photoresist-related materials remains strong, particularly for EUV applications [8] - The timing of recovery in automotive and industrial equipment demand has been delayed, with strong demand noted only for testing-related components [9] Market Forecasts - Forecasts for various end markets indicate fluctuations in unit sales, with notable projections for servers, PCs, smartphones, and light vehicles [10] - For example, smartphone sales are projected to decline from 1,206 million units in 2023 to 1,164 million in 2024, before recovering to 1,283 million by 2026 [10] - The forecast for electric vehicles (BEV) shows significant growth, with projections increasing from 8 million units in 2024 to 14 million by 2026 [10] Stock Price Trends - Stock price trends for semiconductor equipment-related companies are tracked, with various companies showing different performance metrics [12][15][21] - The Nikkei average serves as a benchmark for comparison, with specific companies like Tokyo Electron and ASML highlighted for their stock performance [13][14] Company-Specific Performance - Detailed sales performance data for specific companies in the semiconductor supply chain is provided, showing year-over-year changes in sales [27][28] - For instance, Shinko Electric Industries reported a significant decline in plastic packaging sales, dropping by 40% in one quarter [28] - Other companies like AJINOMOTO and Taiyo Holdings also show varying performance metrics, indicating a mixed outlook across the sector [28] Conclusion - The semiconductor industry is experiencing a complex landscape with both challenges and opportunities, particularly in the context of evolving technologies and market demands [8][9] - Continuous monitoring of demand trends, stock performance, and company-specific earnings will be crucial for investors looking to navigate this sector effectively [8][27]

Summary of J.P. Morgan's North America Commodities Research Call Industry Overview - **Industry**: Oil and Commodities - **Date**: February 20, 2025 Key Points Oil Demand and Supply Dynamics - Global oil demand increased by **1.4 million barrels per day (mbd)** in February, averaging **103.4 mbd** through February 19, 2025, which is **400 kbd** short of the projected **1.8 mbd** rise for the month [5][6][12] - OPEC is considering delaying monthly supply increases scheduled for April, indicating a cautious approach due to anticipated growth in non-OPEC+ supply [5][6][12] - The Ukrainian drone attack on the Kropotkinskaya pumping station is expected to reduce crude oil flow from Kazakhstan by **30%**, leading to a **360 kbd** drop in Kazakh oil exports [5][6][12] Inventory and Stock Analysis - CPC crude stocks have remained steady at **2.5 million barrels (mb)** since February 11, 2025, despite the disruption [6][12] - OECD commercial oil stocks recorded a net draw of **4.5 mb** in the second week of February [6][12] - The rerouting of Kazakh crude oil to Baltic Sea ports is expected to draw down Europe’s commercial crude storage by **10.5 mb** over a **60-day period** [5][6][12] Regional Insights - In the U.S., diesel cracks have retreated from recent highs due to lower product exports to Latin America, while gasoline consumption is expected to rise from **8.3 mbd** to above **9 mbd** during the peak travel season [5][6][12] - Four economies reported oil consumption statistics, with notable declines in Portugal and France, while India showed a significant increase of **170 kbd** year-over-year in January [5][6][12] Price Movements - Oil prices are on track to end the week higher, with global crude prices rising by **$1.60-1.80 per barrel** since last Friday's close, driven by supply uncertainty and frigid weather in the U.S. [5][6][12] - Brent crude has advanced to nearly **$77 per barrel**, aligning with the fair value estimate for February [5][6][12] Future Projections - The ongoing cold weather in the U.S. and increased industrial activity in China are expected to help close the gap in oil demand projections for February [5][6][12] - Gasoline cracks are projected to average **$22 per barrel** in Q2 2025, up **$2 per barrel** from current levels [5][6][12] Additional Insights - The Atyrau-Samara pipeline has a spare capacity of **157 kbd**, while the Kazakh-China pipeline has a total capacity of **400 kbd**, indicating potential for rerouting crude oil flows [5][6][12] - Despite the BTC pipeline having considerable spare capacity, tanker bottlenecks in the Caspian Sea may restrict substantial transfers [5][6][12] This summary encapsulates the critical insights from the J.P. Morgan North America Commodities Research call, focusing on oil demand, supply dynamics, inventory levels, and price movements.

Summary of the Conference Call on US Reshoring and Humanoids Industry Overview - **Industry**: Multi-Industry, focusing on US Manufacturing and the impact of Humanoid robots on reshoring efforts in North America [1][3][10] Key Points and Arguments 1. **Reshoring Opportunity**: The US has a $10 trillion reshoring opportunity, significantly enhanced by the introduction of Humanoid robots, which can lower manufacturing costs and drive protectionism [1][10][29] 2. **Cost Comparison**: There is a mid-single-digit (MSD) cost delta between US manufacturing and Chinese exports, which can be offset with approximately 20% Humanoid penetration [1][14][39] 3. **Total Cost of Ownership (TCO)**: Humanoid adoption could lead to around 85% TCO savings compared to US human workers, allowing the US to achieve cost parity with China at about 20% Humanoid penetration [5][13][36] 4. **Market Growth**: The Humanoid market is projected to grow into an $80 billion industry over the next decade, contributing approximately 50 basis points (bps) of annual growth to the US industrial economy [21][58] 5. **Power Supply as Competitive Advantage**: The US's abundant low-cost hydrocarbons position it favorably in terms of power supply for manufacturing, which is expected to become a critical factor as Humanoids are deployed [23][68] 6. **Electricity Demand Growth**: The adoption of Humanoids is anticipated to reverse the decline in US manufacturing electricity consumption, contributing to a projected 2% annual growth in electricity demand from 2025 to 2050 [23][65] 7. **Investment Trends**: The US has experienced a significant under-investment in manufacturing over the past 25 years, with a cumulative shortfall of approximately $3 trillion since 2000 [55][60] 8. **Geographic Shift in Manufacturing**: The reshoring process is expected to shift manufacturing activity back to the US, enhancing market share and profit margins for US industrials [8][72] 9. **Preferred Stocks**: ETN and ROK are identified as preferred stocks within the reshoring theme, with other beneficiaries including HUBB, FAST, FTV, and TT [8][72] Additional Important Insights - **Historical Context**: The US manufacturing sector has lost share over the last 45 years as capital expenditures chased low-cost labor, but this trend is expected to reverse with the rise of Humanoid technology [7][30] - **Sensitivity Analysis**: A sensitivity analysis indicates that achieving a 20% global manufacturing share by 2050 could be conservative, given the US's significant share of global GDP and goods consumption [17][50] - **Labor Market Dynamics**: The production of Humanoids is projected to require a substantial fixed asset base, with an estimated annual capital expenditure of $25 billion over the next decade [58][59] This summary encapsulates the critical insights from the conference call regarding the potential impact of Humanoid robots on US manufacturing and reshoring efforts, highlighting both opportunities and challenges in the evolving industrial landscape.

Asia Pacific Equity Research February 2025 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan. Humanoid Robots: Hype or the Next Frontier? Karen Li, CFA AC Head of HK Equity Research, Head of Asia Infra, Industrials and Transport +852 2800 8589 karen.yy.li@jpmor ...