China Content Hub APAC Equity Research Reports

APAC Equity Research Reports

Original research on over 1,300 companies, with a total market capitalization of USD 17.16 trillion, including over 400 Chinese-listed stocks. It provides thought-provoking thematic analysis, differentiated trading ideas and coordinated global views.

You will be directed to Credit Suisse PLUS to access the full report.


July 21, 2020

Global Technology: Cloud computing – The next frontier

While a solid 26% CAGR for data cited by Cisco is an old theme, what is new is our ability to monetise data, with AI and Machine Learning being the first technology to lower analytics costs, potentially unlocking the potential for 99.5% of data that has remained dark, leading to an accelerating application workload growth and an accelerating compute TAM. Cloud IT infrastructure spending is delivering a 10% CAGR, vs -1.2% CAGR for traditional IT infrastructure, driven by the rising number of connected devices and video applications, proliferation of cloud services for enterprise and consumer, and accelerating AI data analytics.

July 16, 2020

China Components Sector: PCB leaders rise on 5G and Datacom cycle

We estimate PCB (printed circuit board) content to be almost 5x in 5G BTS vs 4G, besides an enlarged volume on higher coverage density. We estimate the total addressable market in access and transmission network will reach Rmb84 bn/Rmb168 bn in China/worldwide. Assuming that CCL (copper clad laminate, the base material of PCB) accounts for 24% of PCB market value, CCL demand in telecom could reach Rmb20 bn/Rmb40 bn in China/global, among which, high-frequency CCL will likely reach Rmb6 bn/Rmb12 bn and high-speed CCL could reach Rmb10 bn/Rmb20 bn in China/global.

June 26, 2020

China Insurance Sector: Beneficiaries of a healthier bond yield

Concerns have mounted over insurers' investment outlooks and the potential 'spread loss' of insurance portfolios due to bond yield weakness early this year. Even with the bond yield recently recovering to 2.9%, market confidence remains low, as seen in the H-share valuation of 0.64x P/EV (12M forward). At such a depressed valuation, we believe concerns over both asset and liability are overdone. 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%.

June 15, 2020

China Consumer Appliances and ecommerce Sectors: Beyond the pandemic: Winners and losers in the decade of disruptive channel shifts

We believe e-commerce platforms would be the biggest winners, with their share of China home appliance retail sales rising to 65% in 2030E (2019: 41%) at the expense of standalone stores and distributors. Omni-channel/channel penetration are key drivers for e-tailing to expand the total addressable market and capture consumer demand in a versatile manner, while brands with self-developed distribution network are quickly adapting to avoid becoming obsolete. We prefer JD, Midea and Xiaomi as the biggest winners and downgrade Gree/Robam to NEUTRAL/UNDERPERFORM.

May 26, 2020

China Market Strategy: Road-mapping the return of Chinese ADRs

It is natural to look for the alternatives out of the US markets, given escalating tensions between US and China over finance and investment recently. 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. Opening up and reform on China and Hong Kong stock markets has created a positive feedback loop with increasing activities on both primary and secondary markets. STAR Board in Shanghai had 94 IPOs that raised Rmb112 bn with higher valuation multiples when the listing regime reform in Hong Kong resulted in 17 companies raising HK$117.3 bn.

May 15, 2020

China Market Strategy: China A-share conference wrap-up—Brighter outlook but overseas demand at risk

Among the 60-plus companies that attended our China A-share conference, 37 were under our coverage. Companies from technology, industrials, consumer and auto sectors dominated. A majority of corporates (57%) held a positive tone, while the remaining 14% held a neutral tone. Half of the companies estimated an improvement in 2Q20 vs 1Q20, with 30% expecting worse performance in 2Q20. The outlook appears better into 2H20, with 75% of companies foreseeing a bright outlook with business improvement into 2H20, and only 3% anticipating deterioration. Overseas demand (59% of total) was the most frequently mentioned risk by corporates as a result of potentially worse global recession for longer, well above domestic risk (18%) and competition (19%).

May 4, 2020

China Unicorns: Emerging from the stables

China is the second-largest source of unicorns. Compared to the US, China's unicorns are more driven by business model innovation which takes advantage of the large, fast-growing but fragmented consumer market. Due to the lower investment in R&D, fewer China unicorns are in AI/big data/robotics/software and healthcare. The increased R&D spending may boost the unicorns in those sectors in the future. China and Hong Kong adapted themselves to companies with innovative businesses. In China, STAR Board was launched in June 2019 as a testing field with a completely new design, introducing IPO registration system, new company thresholds, new financial tests, and welcoming weighted voting rights and red chips.

April 21, 2020

China Market Strategy: China Back to Spend 2: Recovery in better shape

The gradual recovery of China consumption is on track, although there are still uncertainties related to the pandemic. Despite a weak print in 1Q20, some key economic indicators showed a gradual recovery in March. China has come up with plenty of stimulus packages to boost consumption at both the central and local levels, with more to come. E-commerce space has seen a strong recovery in March, with MAUs on all major platforms exceeding Dec-2019's level amid an impressive rebound in parcel volume growth. Delivery user traffic is now back to 75-80% of the pre-outbreak level, with order demand expected to fully recover by May. 

April 3, 2020

Asia Pacific Thematic Strategy: A boon to energy consumers

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. Of the loss to net exporters, ~85% is in RU, SA, IQ, the UAE, KW, and IR. Governments lose mostly, and may borrow more. ~84% of savings could end up with consumers, offsetting some of the pressure due to the virus-linked lockdowns, particularly KR, CN, and IN. Better affordability helps poorer economies, as dense energy helps productivity.

March 18, 2020

China Banks Sector: Be very selective in a challenging year

Most factors would otherwise have been stable for China banks in 2020, except for pressure from narrowed NIM. However, with the COVID-19 outbreak, CS has revised down 2020 GDP forecast from 5.9% to 5.5%. We see further downside risks. The unfavourable macro environment will put further pressure on various aspects of the banking business. It will be a challenging year. With the outbreak getting under control in China, stable economic growth is gaining higher priority on government agenda.

March 13, 2020

Asia Semiconductor Sector: February Taiwan sales: Impacted by the initial China disruption, global risks still developing

Taiwan tech well behind due to China's virus control measures. February sales for the Taiwan chain brought QTD sales down 37% QoQ. EMS and PC/NB ODMs underperformed while semis kept orders intact. Our team's checks suggest downstream utilization is recovering though may lag full production into 2Q. Across our CS coverage, 26% of companies were above, 4% in line and 70% below street expectations QTD due to China's containment efforts. 

March 12, 2020

China Property Management: High growth + high visibility + high quality

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. We believe the strong share price momentum should continue, driven by: (1) resilient margin, (2) more government support post COVID-19, and (3) more fund flows after stock connect inclusion. We believe the basic services segment will benefit from the property completion upcycle and the leading players are better positioned to reap more upside. We prefer players with (1) high growth visibility, (2) strong execution capability, and (3) a quality client base for community VAS.

March 12, 2020

Asia Oil & Gas Sector: Just when you thought you've seen it all—Cutting oil price forecasts

CS Global Energy Team cuts Brent oil price forecast to US$42/$50 for 2020/21 (from US$63/$65), and expects oil prices to remain under pressure next several quarters. We see risk of oil prices to temporarily approach low-$20s in the near term.

March 5, 2020

Asia Oil & Refining Sector: From bad to worse 2.0: A deeper demand disruption from extended coronavirus outbreak

The coronavirus outbreak has worsened outside China since our last assessment on 5 Feb, with 65% of Asia oil demand countries now affected. We now forecast 1.4mb/d of demand loss in 1Q20 (vs 0.65mb/d previously). For the full year we forecast 570kb/d loss (vs 270kb/d previously), resulting in a 110kb/d YoY decline in Asia oil demand – the first YoY decline since 2008 GFC. We expect GRM recovery to be slower than our previous forecast given wider and deeper demand disruption. We cut our 2020 product spread forecast by 21% on average, and believe the GRM rebound in February could be short-lived. Chinese refiners' run rates have likely reached a bottom, and with increasing destocking pressure, product exports out of China could pick up in the coming months.

March 4, 2020

Asia Technology Strategy: Smartphones: Modest negative demand impact likely; 5G largely on track in China

Better-than-expected growth outside of China and for overall iPhone units in 2019 would have called for a positive revision to our global smartphone units estimates for 2020.

March 3, 2020

China Market Strategy: Work from home: A new secular trend; how to position

This is probably the largest scale of WFH in recorded history, with ~200 mn office workers in China stuck in their homes.The central and local governments had to take rigorous quarantine measures and encourage people to stay at home due to COVID-19 outbreak.

February 25, 2020

China Market Strategy: China back to work (week 3): On the road to recovery; high-frequency data need to catch up

Work resumption status reported by the local media this week demonstrates noticeable improvement, with average rate at the provincial level increasing from 38.9% to 61.9%.

February 20, 2020

China Market Strategy: China back to work (week 2): Moderate recovery

The COVID-19 is gradually getting under control in China, excluding Hubei. In addition to fighting the outbreak, the central and local governments are trying to stabilise the economy, with work resumption as top priority.

January 21, 2020

China Market Strategy: Wuhan pneumonia outbreak - lessons learnt during SARS in 2003

Looking at the Wuhan pneumonia outbreak, we would draw on some experiences from SARS in 2003 in terms of the possible impact on the China/HK economy and markets in coming months. Based on the trajectory in 2003, we believe the stock market will be negatively affected in the short term, but, if the government can ensure that information releases are reliable and updated, the market will likely be less volatile and should start to bottom out once new cases start declining.

January 15, 2020

China Consumer Sector: 2020 outlook: Finding alpha in a less volatile world

For 2020, we expect overall consumption sentiment to remain at a high level, which should support a more stable retail sales (at ~8% YoY), with mild recovery in large-ticket items. We reckon some near-term headwinds such as calendar-shift of the Chinese New Year and diminishing impact of last year's tax cut, but expect consumption to be remarkably resilient this year, supported by secular drivers and a less volatile macro environment.

January 9, 2020

China Technology Sector: Hardware outlook 2020

We anticipate 2020 to be the key inflection point for 5G where capex is expected to recover in China by 16%. Our CS tech strategist forecasts global 5G smartphone shipments to be 250 mn/500 mn in 2020/21E, 121 mn/208 mn units to ship in China (48%/42% of total shipment). We see 5G as key to driving the replacement cycle for China's smartphone market.

January 6, 2020

China Internet Sector: 2020 outlook

E-commerce and education are likely to continue to outperform in 2020. Following the two subsectors' 83%/64% share price rally in 2019, they are again expected to see the fastest growth profile among sub-sectors. We see secular drivers, including lower-tier city penetration, offline share gain and further monetisation as support. In other subsectors, we see a brighter outlook for local consumption but a relatively neutral outlook for game as growth may slow down. Online entertainment, advertising and verticals remain our least preferred sectors on increasing market competition and persistent share gain from private names despite a decent industry growth.

October 23, 2019

Macau Gaming Sector: The odds are improving

The combination of a new Baccarat bet option and rising adoption of non-commission Baccarat tables should lead to better margin both for casinos and junkets. We consider the sector under-owned and see gaming revenue increases through 2020. We also see more positive policies in support of Macau, both from the new Chief Executive and infrastructure.

October 3, 2019

Asia Pacific Thematic Strategy: A half-trillion dollar shift

To understand implications of the US-China trade war on manufacturing locations, we surveyed 100 companies (global sales US$1tn) and dived deep into trade flows, sectoral trends as well as macro-economic drivers. In this Connections Series report, Credit Suisse concludes ~US$350-550 bn of exports are expected to move out of China that in five years. 

July 17, 2019

China Internet Sector: Picking winners amidst a demographic shift

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 than half of China's population still generates GDP per capita <US$10,000; we see accelerating urbanisation driving a consumption upgrade and thus better monetisation by leading players.

July 10, 2019

China Sportswear Sector: A fashion for fitness

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. Can Chinese brands be fashionable? Yes – our analysis shows Chinese consumer perception has evolved on foreign brands, backed up by CS's Emerging Consumer survey 2019.