EQUITIES

EQUITY NEWS OF THE DAY

• JPMorgan Chase (JPM US)

JPMorgan Chase said the company has outsourced its custody business in Hong Kong and Taiwan to HSBC and STANCHART respectively, without disclosing the financial details of the agreements. JPMorgan is the world's third-largest custodian. Assets under JPMorgan's custody business in the two markets were reported to be around USD520B at the end of 2023, and the bank has decided to outsource the business due to a decline in assets and an increase in cost-to-income ratios. It may likely enhance the bank’s efficiency amid the uncertain macro environment in Asia. MARKET CONSENSUS: 24 BUYS, 7 HOLDS, 1 SELL, AVERAGE TP USD192.26 • JD-SW (9618 HK) JD Cloud, a subsidiary of JD-SW, announced a new pricecomparison campaign that promises to compensate customers if they find JD Cloud's prices higher than other platforms after making a purchase. The campaign aims to compete on price with other cloud service providers across the internet. The campaign is effective from 1 March 2024 and is expected to trigger a new round of price competition in the cloud services market. Alibaba Cloud announced earlier their "biggest ever" price reduction strategy. With escalating price war in China’s cloud services, JD profit margin and near-term growth will likely be under pressure.

MARKET CONSENSUS: 33 BUYS, 5 HOLDS, AVERAGE TP HKD157.77

• General Motors (GM US) General Motors is recalling 820,000 newer pickup trucks in North America because tailgates could unlatch and open unexpectedly. The recall covers 2020 through 2024 model year trucks with power unlatching tailgates because water could leak into the exterior tailgate switch and cause a short circuit. GM said it is aware of one reported incident of a minor injury and three minor property damage complaints related to the recall issue. This could raise quality concerns and create reputation risk that could impact its position in the competitive automobile market.

MARKET CONSENSUS: 20 BUYS, 10 HOLDS, 1 SELL, AVERAGE TP USD50.41

• Alphabet (GOOGL US) A California regulator has approved a proposal from Alphabet's Waymo to expand its fared, completely driverless robotaxi services to Los Angeles and some cities near San Francisco. Waymo, which already operates in San Francisco and Phoenix, applied on Jan. 19 to expand its driverless services, saying it would work with policymakers, first responders and community organizations. While Waymo may gradually infiltrate in the US hailing industry, it faces growing public hostility towards robotaxis following accidents involving Waymo and rival General Motors' Cruise.

MARKET CONSENSUS: 55 BUYS, 10 HOLDS, AVERAGE TP USD165.33

• Volkswagen (VOW3 GR) Volkswagen forecast on Friday that sales growth would slow in 2024, joining competitors in warning of a weaker economic outlook, rising competition and higher costs. Europe's top carmaker expects sales to grow by up to 5% in 2024, after a 15.5% increase last year to EUR322B. European carmakers have come under pressure from US rival Tesla as well as Chinese competitors when global momentum for EV is fading in the face of waning sales growth and declining government backing. EV competition would likely stay as a red sea and deteriorate profit of the automakers in near term. MARKET CONSE

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