Daily Briefs

• The Nasdaq Composite plunged over 2.7%, its worst decline since December 2022, as tech stocks faced pressure from potential US export curbs on China and Trump’s comments on Taiwan
• A Boston Consulting Group study found that only 16% of Japanese employees and 31% of managers use generative AI at work, the lowest among major countries.
• Hong Kong-based activist acquired a 5.09% stake in FANCL and aims to provide management advice amidst Kirin takeover

• Baidu announced that the company has seen a rapid uptake in its Robotaxi business on the mainland.
• Baidu is at the forefront of the industry globally with its Fully Self Driving taxis available in more than 10 major cities in China.
• Baidu’s autonomous taxi unit, Apollo Go, has over 100 million kilometers of high-level autonomous safety driving mileage and holds over 5,000 autonomous driving patents.

• Discussion about the potential for Chinese companies to use shell corporations to rent GPUs from American companies
• Mention of a blog post by Sequoia and a report from Goldman Sachs on the challenges of monetizing AI infrastructure
• Skepticism about the return on investment in AI due to lack of clear revenue sources and consumer use cases, particularly with companies like Microsoft and Amazon investing billions in AI projects.

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• The popularity of <DnF Mobile> and <Arena Breakout> continues to rise. As a result, we are increasing the gross billings estimation for these games by 10% and 15% respectively.
• <Need For Speed Mobile> had an impressive first day, topping the iOS download charts and ranking  15th on the grossing chart. We are raising the expected gross billings by 25%.
• Due to the game’s lifecycle, <Eggy Party> has experienced a slight decline in revenue. Therefore, we are adjusting the forecast down by 10%. Conversely, <Identity V> continues to perform strongly.

• The Dow Jones Industrial Average surged over 700 points on Tuesday, setting a new all-time closing high
• Neste and Mitsubishi Corporation are forming a strategic partnership to develop renewable chemicals and plastics
• Fujitsu announced a strategic partnership with Cohere Inc., focusing on developing advanced Japanese language models for enterprises

• New records were set in June with land temperatures 1.75°C above average and ocean temperatures 0.98°C soaring above average.
• The Climate Shift Index (CSI) revealed that 4.97 billion people experienced extreme heat from June 16-24, with a significant increase in heat due to climate change.
• June 2024 saw severe precipitation extremes, with drought conditions in places like the western U.S. and heavy rainfall in regions including southern Japan and Bangladesh.

• Government Implements Uniform 5% Tax for Aircraft and Engine Parts to Boost Domestic MRO Industry
• Telangana Government Announces INR 35,000 Crore Farm Loan Waiver Scheme
• Temasek to Invest $10 Billion in India Over Next Three Years

• In last month’s monetary policy decision, the Reserve Bank of Australia (RBA) kept interest rate unchanged at 4.35%.
• According to a Reuters poll, a majority of the economists predicted interest rates to remain unchanged in the current quarter, followed by a 25bps cut to 4.10% in 4Q24.
• Amid possible rate cut talks both in the domestic as well as the U.S. market, we want to take a look at Australian biotech companies.

• PDD US/BABA US/JD US/VIPS US/3690 HK: NBS publishes social retail consumption data for June 2024 (-/+)
• 1024 HK: Kuaishou Releases First Fully AI-Generated Micro-Drama, Receives Positive Reviews.（+）
• BABA US/PDD US/1519 HK/ZTO US: Weekly parcel volume shows 26% y-o-y growth (+)

• 981 HK/1810 HK: Huawei to launch updated Nova series smartphones (+//)
• BEKE US:China’s residential property prices show narrowing MoM decline in June (+)
• 1810 HK/AAPL US: IDC publishes 2Q24 smartphone sales data (+)

• The Energy Select Sector SPDR Fund (XLE) has underperformed the S&P500 and Russell 2000 indices during 2024 (Fig 1).
• The S&P 500 has gained ~18%, outpacing the ~8% rise in the XLE and the ~6% rise in the Russell 2000.
• The XLE’s 1H24 performance likely reflects oil prices trading in the $75 – $80/bbl band for much of the first six months of 2024 and natural gas prices which were negatively impacted by mild winter weather. 

• Consumption subsidies in China has been muted in the 2020-2024 period, compared to practices in 2009-2012. We believe it reflects different thought of Chinese government at these two times;
• Past data has suggested that consumption subsidies are effective. We expect consumer subsidies of ~RMB 50bn to be issued in C2H24 to revive consumption;
• An even bigger consumer stimulus of ~RMB 200bn might be issued in 2025, and we believe a consumption tax reform might be one the permanent fixes for the purpose.