In today’s briefing:
- Ohayo Japan|Benign PCE Deflator Spurs Equities; BOJ Easing to Continue: Nidec+Renasas = A Big Deal
- [Blue Lotus Sector Update]: Investors Tolerate Amazon, Why Not China New Energy?
- China TMT Update-BEKE/981.HK/1810.HK/AAPL-Ministry of Housing Loosen Home Purchase Restrictions
- Interpretation of the New Adjustments in Medical Insurance (NRDL) Negotiation Rules and the Impact
Ohayo Japan|Benign PCE Deflator Spurs Equities; BOJ Easing to Continue: Nidec+Renasas = A Big Deal
- OVERSEAS. PCE Deflator 3.0%YoY; 0.2%MoM calms (re)inflation fears; Yields fall, Equities rebound as Goldilocks View of Economy/Markets intact; SPX 2Q earnings not so bad; China further moves to bolster economy;
- JAPAN. NKY Futures 1% vs Cash; USDJPY 141.2; BOJ Tweaks – 0.5% JGB10Y yield now a reference, not a ceiling; To buy bonds at 1%.; Next inflation forecast 1.9%=continued easing
- NUGGET. Nidec-Renesas Partnership potentially a big deal for both companies. Successful execution will lead to sales and profit growth for both companies in their respective areas.
[Blue Lotus Sector Update]: Investors Tolerate Amazon, Why Not China New Energy?
- The phenomenon of Chinese vendors taking terms to launch price wars, diminishing industry’s profitability is a headache.
- We conclude the reason is China’s technology lead is so slim that price wars against each other is the only way to stay in the game;
- Although renewable energy has long and expansive value chains, transportation is a separate node. China’s success in EV has strategic value for a wide range of industries.
China TMT Update-BEKE/981.HK/1810.HK/AAPL-Ministry of Housing Loosen Home Purchase Restrictions
- Real Estate Industry Update: Beijing intends to give policy support to the purchase of green buildings（+）
- Real Estate Industry Update: Ministry of Housing promised to lower housing down payment, and loosen home purchase restrictions（+）
- 981.HK/1810.HK/AAPL: Huawei to launch new 5G-enabled smartphones ( + / -)
Interpretation of the New Adjustments in Medical Insurance (NRDL) Negotiation Rules and the Impact
- Many investors may not understand China’s NRDL negotiation system and the new adjustments in July. So, we think it’s necessary to clarify the rules/key points of NRDL negotiation procedures.
- NHSA provides clear calculation rules for price reduction, greatly increasing the predictability of price changes during renewal process in NRDL negotiation. However, the benefits brought by new adjustments are limited.
- The main direct beneficiaries are those “old drugs” since their price reduction can be controlled in renewal process. For enterprises, the biggest obstacle is the first NRDL negotiation with NHSA.
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