1Q smartphones units were below our 8-Mar update, -14% QoQ to 314mn vs our 344mn units, impacted by the Russia-Ukraine conflict, China's zero Covid policy, and rising inflation on consumer demand. Exports, once a brilliant outperformer in the past two years, only rose 3.9% YoY in April, the slowest pace since June 2020. China Cosmetics Sector: CS monthly online tracker Jan-2023: Sentiment to gradually pick up. Our team's checks suggest downstream utilization is recovering though may lag full production into 2Q. Telecom and infrastructure. We expect tightness to ease through 2022, and see two adjustments, a modest one from near-term inventory mismatch and potentially again late in 2022. It is hurting near-term economic activities, evidenced in the recent readings of NBS service PMI and manufacturing PMI. However, most of our macro experts believe China's economy will recover in 2022. While Hong Kong market volumes have been volatile, Southbound investor share of gross turnover remains strong at 32% (accelerating from 30% last month). In China, strong demand for SGMW's Mini EV demonstrates the large potential of mass market EV models. in 2022/23, after 4%/13% increase in 2020/21. However, Covid-19 lockdowns in China, plus a faster supply response from new capacity additions, have deteriorated the S/D balance and shifted early the tipping point. Research related to finance and other sectors, the economy, real estate, and much more. China Healthcare Sector - China PD-(L)1 on the move: Picking long-term winners in a competitive race. Please note that certain products and services described on this site may not be available in your jurisdiction. The global market took a hit with oil prices spiking, while volatilities are high in most markets. Combined expertise and resources enable us to deliver distinct coverage with leading content and solutions across products and regions. We expect brands' inventory levels to continue improving into 2021 (currently still 1-2 months higher vs normal levels). We expect GRM recovery to be slower than our previous forecast given wider and deeper demand disruption. China is currently facing the most severe Covid-19 resurgence since the outbreak in Wuhan city in early 2020. Key terms: (1) US$39bn for semis manufacturing incentives, including US$2bn on mature nodes and up to US$3bn per project; (2) US$11bn for R&D funding, including a National Semi Technology Center, and US$4.2bn for industry development for telecom, defense and workforce training; and (3) 25% investment tax credit for semis fab construction, fab equipment, and semi-cap investment. Southbound flow has continued at a robust pace in 2022, despite a significant bear market in Hong Kong stocks, with US$12.5bn of inflows year-to-date. (2) Operational enhancement for upside: margin upside coming from product mix enhancement (lifting GPM) and operating leverage into 2023. FYP slid 3.6% on: (1) shrinking agency force, (2) unrecovered long-term insurance demand, (3) likely competition with HMB. The combined economic figures for January and February 2021 reflect that China's economic recovery continues to gain momentum. $110K-$180K Per Year (Employer est.) We expect Chinese brands to gain market share, particularly in the mass segment, as domestic brands are gaining popularity. Equity research analysts closely analyze small groups of stocks in order to provide insightful investment ideas and recommendations to the firm's salesforce and traders, directly to institutional investors and (increasingly) to the general investing public. While brands have sharply discounted their products to clear inventory, and we expect discounts to be higher YoY into 2021, we expect the market to overlook this, should growth improve sequentially. China Laser Sector: 3Q22 previewFurther lower full-year expectation; recovery lacks visibility. Besides, the high base and slower penetration will expose laser demand to higher cyclicality. In the past decade, we've witnessed dramatic cost reductions in renewables driven by technology improvements, which helped most of the world achieve grid-parity. Here we assess further the potential impact of higher commodity prices on the ASEAN consumer space, especially the manufacturers that are likely to be hardest hit. For the construction sector that is valued at low-single-digit P/E, the business is improving, or at least stabilising. At our first expert call of Deep dive into China's booming aesthetics market' series on 10-Nov, the speaker, Dr Li, said the execution of the ongoing inspection (Jun-Dec-2021) of the MA industry seems much stricter than before. Known as the "heart" of power semiconductor devices, IGBT is the core device widely used in areas such as new-energy vehicles, railways, smart grids, renewable power inverters, and home appliances. Lifted lockdowns indeed reinvigorate communities, but with a few restrictions still in place. Most companies noted positive progress on product roll-out and solid demand outlook. Look to what domestic investors are doing for new alpha generating ideas. Credit Suisse Equity Research Global Footprint: 275 analysts covering over 2,600 companies U.S. Equity Strategy: Our top ranked U.S. Strategy team is responsible for the firm's equity outlook, including market and earnings forecasts, as well as sector and thematic recommendations Idea Generation: Ample products including Monthly Operating data also weakened. China Online Lending Sector: Bargain hunting - Be selective. China demand remains very solid and overseas demand is expected to add fuel. China Market Strategy What is next after relief rally? We believe the demand recovery trajectory is unlikely to resemble the one back in 2020 due to a change in circumstances, including a more contagious virus, a less supportive property market, as well as less resilient manufacturing SMEs in China. Despite the lower temperature bringing down daily consumption at power plants in southern China, the market remains tight amid supply reduction. We prefer biotech and CRO as they continue to have the highest level of innovation, but their globalization will not be a smooth process. Amid a continued deceleration over the past few months, Southbound flows turned negative in November, with around US$600 mn of net outflows. However, we are lifting 12" wafer demand from 1% CAGR in 2017-19 to 10% CAGR in 2020-22 on the back of product drivers including the 5G smartphone ramp, continued WFH demand, data centre investment reacceleration, and now supplemented by improving auto/industrial demand recovery. With easing liquidity in developed countries, we believe copper and aluminium prices are most geared to the upside and supply constraints to further add fuels to rising prices. China Market Strategy Shanghai lockdown and the ripple effect a bottom-up reality check. APAC Quantitative & Systematic Strategy: Southbound sentiment tracker: sector rotation accelerated amidst record monthly outflow. Adopt a more dynamic approach to Value in on- and offshore China. At the same time, recent announcements such as QFII/RQFII reform should further expand the depth of China's onshore markets. It includes commitments in goods, services, investment, intellectual property rights, competition, etc., but in this note, we focus on goods. *The location of origin is defined in your browser settings and may not be identical with your citizenship and/or your domicile. We remain confident that the recovery trajectory in 2H20 is intact. Hardware companies are now seeing 90%+ of their component supply back in balance and broadly available, though still have lingering bottlenecks on PMIC, MCUs, Wifi, switch, and high-end substrates.. February sales for the Taiwan chain brought QTD sales down 37% QoQ. China's most important cities declared victory over the Omicron outbreak, including Shanghai officially reopening on 1 June and Beijing easing restrictions on 6 June, with some conditions. You are about to change the origin location from where you are visiting Credit-suisse.com. Equity Research Software Microsoft (MSFT) INCREASE TARGET PRICE RatingOUTPERFORM Price (17-Jan-18, US$) 90.14 Target price (US$) (from 95.00) 115.00 52-week price range (US$) 90.14 - 62.30 Market cap(US$ m) 695,393 Target price is for 12 months. The rising impact of domestic mutual funds will continue to be one of the most important stories in the region. We see consumers' interest in TCM could be increasing modestly. China is the second largest cosmetics market in the world, and is set to deliver a 16% CAGR from 2021-23E (2016-20E: 12%) driven by (1) GDP growth in China; (2) increasing penetration among young consumers; and (3) premiumisation trend to drive ASP hikes. China Market Strategy: Chinas reopening tracker (2) - Spring is coming! China OEM automation grew 28% YoY in 2Q21, implying a 21% 2-Y CAGR. Despite near-term headwinds from COVID-19 resurgence, normalising consumer behaviour should lead to a strong rebound in out-of-home spend vs the fading at-home consumption, while some behaviour (e-tailing) might linger for longer. We cannot rule out pricing power in the turbine and cable supply chain, albeit our base case is that in turbines, only SGRE is profitable to 2025E; We estimate IRRs for developers of current 'fixed bottom' foundation projects are c5-6% post-tax nominal, often with developers taking power price risk. We prefer companies that have demonstrated resilience in their business models. China Internet: Platform regulationnavigating the competitive landscape. During the recently held 'Leaders' Summit on Climate', hosted by the US, several countries raised their 2030 greenhouse gas (GHG) emission reduction targets. TBS4UeB
}kO3=#}GtWk~w=6!twg. Metal cutting machine production remained weak in August with a 13.5 YoY decline (July: -14.8%). The monthly gross turnover impact has stayed above 40% and the free float stake has remained at 12.5%, close to the all-time high level. We estimate the global datacom transceiver market to grow by 24%/26%/22% in 2020/21/22, reaching US$6.4 bn in 2022, primarily driven by expected top-tier hyperscale capex growth of 16%/18%/8% over the same period. We expect the valuation multiples to increase with sector-wide sales growth returning to positive zone from 3Q22, which will boost investors' confidence in HDT value chain players' earnings growth. We initiate coverage of the China property management sector with an Overweight rating, given the (1) strong earnings growth, (2) high visibility on sufficient pipeline, and (3) good quality with positive FCFF. Our analysis shows 200mn untapped users, over the existing 830mn internet users, and the pace to acquire the last batch will be very fast. More recently, we have seen mutual funds unwinding "crowded" stocks. We maintain our highest conviction in biotech, CRO, and innovative device with an average 36%, 25%, and 15% upside implied by our target price, respectively. Take more risk down the market cap spectrum. You will be directed to Credit Suisse PLUS to access the full report. In 2023, the divergence among sub-sectors in Shipping sector should widen. The Russia-Ukraine conflict has sent rounds of shock waves to the markets, triggering fears of a supply crunch as Russia is the world's leading natural gas and crude oil exporter. China Consumer Sector: 2020 outlook: Finding alpha in a less volatile world. Global Themes Monitor: Alternative Energy (Vol. Dr Li also flagged that large-scale off-label treatment might be a potential risk for some companies. Margin trends beyond 2Q will in large part depend on commodity price moves. YTD inflows now stand at US$8.6bn for 2022. China Sportswear Sector: CS monthly online tracker Jan-2023: Softening but not concerning. The infrastructure back in China and Hong Kong is actually ready to welcome them back, after a two-year reform in both stock exchanges and regulators. Governments lose mostly, and may borrow more. Should you have any questions regarding a specific product or service offering, please reach out to your Credit Suisse representative. While cuts are deep already, stocks historically bottom 3-7 months ahead of utilization and 2-3 months ahead of earnings, making the August-November period a likelier support for a more aggressive re-entry. The themes of climate change, clean energy, and decarbonisation continue to gain traction with various stakeholders across the world. However, in addition to two vaccines that received Emergency Use Authorization (EUA) in September, 14 vaccines from 11 companies have been tested in a China Center for Disease Control and Prevention (CDC)-coordinated head-to-head (H2H) trial, some of which have a high possibility of receiving EUA. China Steel Sector: Margins squeezed on higher iron ore prices. We also expect China SiC suppliers (chip and module) to grow their share, from 4%/5% global share in 2021/22 to 12% by 2024E. This number represents the median, which is the midpoint of the ranges from our proprietary Total Pay Estimate model and based on salaries collected from our users. Inflationary pressure manageable for leading players with strong brand equity and supply chain, given the more favourable competitive dynamics. Sixteen out of 22 sectors declined, led by consumer services, Macau, software, insurance and real estate. China Semiconductor Sector: China semis' better growth re-accelerated in 1Q21, leading to sub-seasonal inventory. We expect the internet CSP growth to slow down in 2022 due to consumption weakness and regulatory impact. City-gas is one of the very few sub-sectors in the utility space that could benefit from the China reopening (+7% national demand in 2023 vs -1% YoY in 2022, per CSe). We expect manufacturing upgrades and technology progress to drive advanced machinery to further proliferate among various industries. Color cosmetics also declined by 40% YoY in Jan, further widening from Dec (-35% YoY). After over four years of growth, China domestic excavator sales softened in recent months, along with other machinery. In other subsectors, we see a brighter outlook for local consumption but a relatively neutral outlook for game as growth may slow down. EV demand growth would also boost demand for middle stream and upstream sectors including battery cathode (42% CAGR) and lithium (36% CAGR) producers. The Credit Suisse Research Institute analyzes fundamental trends by combining the knowledge of leading experts with the expertise of the worldwide network of Credit Suisse analysts. China Healthcare Sector: A tale of 7 Covid antivirals to compete in China in 1H23. Significant cost inflation since 2021 has propelled breweries to implement ex-factory price hikes since 3Q21, which have been passed through well YTD. We expect China sportswear to deliver the highest growth within the apparel industry, underpinned by: athleisure; personalization and customization; and e-commerce and social media. We expect the fundamental backdrop for premium brands to remain strong in 2021, underpinned by continued demand recovery and tight demand-supply dynamics. 12 Credit Suisse Equity Research Associate interview questions and 12 interview reviews. After the record outflow in July, August sees SB selling pressure easing. We revise up our base-case long-term investment return under EV to 4.75% from 4.5%, driven by the recent recovery of the 10Y CGB to 2.9% from the trough of 2.5%. We believe such control measures imposed have put both online and offline consumption on a downward spiral. We saw a strong consumption recovery with consumer sector revenue in the 2023 CNY holiday up 12.4% vs 2019. There is also considerable diversity: demographic transitions are accelerating in Japan, Korea and Taiwan, but remarkably slow in Indonesia and Philippines. China Coal Sector: Underperforming supply and 4Q strong seasonality to support coal price. Since late-May, we have seen the longest sector rally in China healthcare in the last 12 months and we believe the sector bottom was reached before the rally. Across our CS coverage, 26% of companies were above, 4% in line and 70% below street expectations QTD due to China's containment efforts. Sporadic virus outbreaks may make investors concerned about potential disruption, but improved testing infrastructure along with concerted administrative measures can contain contamination quickly. Key takeaways from the show Offers for all girls' ( offer) by Austin Li: (1) higher discounts across the board compared with last year (buy-1, get-1-free or more); (2) international brands being more aggressive (as high as 50- 60% off); and (3) pent-up demand to be released, as Austin soft-guaranteed some brands to double GMV YoY, and hot SKUs may further outperform. Small appliances and supermarkets are our least preferred sub-sectors. Due to a slow recovery outlook, we cut 2022/23E earnings by 21-163%/0- 44% and cut TPs across the sector. We expect regulatory overhang for the sector to remain. China Restaurants and Condiments Sectors: A bigger bite of China. Against the backdrop of the 'Dual Circulation' model with focus on quality amid a still- challenging international environment we see opportunities for unicorns to grow, especially those satisfying people's consumption demands and closing gaps in key technologies. ~84% of savings could end up with consumers, offsetting some of the pressure due to the virus-linked lockdowns, particularly KR, CN, and IN. Shanghai is grappling with stringent measures to fight against the country's most severe Covid-19 resurgence since the outbreak in 2020. How to prep for this interview? This reminds us of late 2018, when the US-China trade war and the then deleveraging campaign domestically triggered market turmoil. The Russia-Ukraine conflict has triggered increasing disruption in the areas of commodities, leading to substantial pressure on already-high inflation. We take into account five factors when evaluating the relative attractiveness of sub-sectors, including: (1) the growth potential of sub-sectors; (2) potential upside from localization; (3) current valuation levels; and (4) elasticity on reopening and the property recovery. Tanker should be a core beneficiary of: (1) a full playout of Russian oil rerouting; (2) potential start of global oil restocking; (3) China's pro-growth strategy & reopening demand; and (4) IMO environmental regulations further tightening supply. Of the >US$1 tn in income shift from oil producers to consumers, US$500 bn moves between countries and US$550 bn within them. APAC Quantitative & Systematic Strategy: China mutual fund positioning - 2022 review. The most comprehensive and up-to-date resource of its kind. Here we focus on China (CN). Led by consumer services, Macau, software, insurance and real estate, clean energy, much! 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