Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Equity Bottom-Up

<ul>
<li>Following on from our previous note, we now identify inexpensive consistent compounders from the small and mid-cap universe in Asia ($1 - $5 bn in market capitalization).</li>
<li>28 stocks are on our list - 18 from onshore China, 5 from India, 2 each from Japan and Taiwan and 1 from Hong Kong.</li>
<li>Industrials, technology, healthcare and financials dominate the list. The list of large and mid-cap compounders shall largely form the backbone of our top stock choices for 2025.</li>
</ul>


Following on from our previous note, we now identify inexpensive consistent compounders from the small and mid-cap universe in Asia ($1 - $5 bn in market capitalization).
28 stocks are on our list - 18 from onshore China, 5 from India, 2 each from Japan and Taiwan and 1 from Hong Kong.
Industrials, technology, healthcare and financials dominate the list. The list of large and mid-cap compounders shall largely form the backbone of our top stock choices for 2025.


Asia and Global Semiconductor and Tech Research

Andrew Lu

Thematic (Sector/Industry)

<ul>
<li>After our global server market model update, we see 3Q23 server market decline and data center vendors' capex cut not consistent with Nvidia's robust y/y sales growth of over 200%;</li>
<li>Discrepancy: 1. Nvidia gaining value on AI server, losing zero on non AI; 2. AI servers grow at the expenses of non AI; 3. most vendors not only in server;</li>
<li>Different from  consensus view, we expect general (non AI) server market to decline 16% y/y in 2024 and 29% in 2025 and suggest to avoid general server supply chain vendors.</li>
</ul>


After our global server market model update, we see 3Q23 server market decline and data center vendors' capex cut not consistent with Nvidia's robust y/y sales growth of over 200%;
Discrepancy: 1. Nvidia gaining value on AI server, losing zero on non AI; 2. AI servers grow at the expenses of non AI; 3. most vendors not only in server;
Different from  consensus view, we expect general (non AI) server market to decline 16% y/y in 2024 and 29% in 2025 and suggest to avoid general server supply chain vendors.


What to Avoid if AI Server Will Continue to Squeeze General Server Market in 2024-2025?

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Ingenuity

Our focus is exclusively on in-depth research & consulting in the broader semiconductor industry. We focus on the key players, namely Intel, Micron, Qualcomm, Apple, Samsung, NVIDIA, AMD, TSMC & Global Foundries - as well as some of the lesser known, but nonetheless critical, companies such as ASML (for EUV), Mellanox, Cavium, Xilinx etc. We specialise in their products, roadmaps, process technologies, competitive advantages & threats etc. We also help our clients understand the implications of new and emerging technologies, e.g. 3D X-Point, 3D NAND, Carbon Nanotubes, Autonomous Driving, Graphene, Silicon Photonics, Wafer-Level Optics, Artificial Intelligence, FPGA, GPU, ASIC etc. 

Semiconductor Analysis & Research

<ul>
<li>Taiwan companies are required to report revenue on a monthly basis. These updates can help us understand how a given quarter is progressing &amp; predict quarterly earnings ahead of time</li>
<li>Initially we focused on MoM %  increase/decrease. This is useful, but one needs to account for anomalies such as seasonality and potential non-linearity month to month within a given quarter </li>
<li>We now also provide the monthly YoY revenue comparison. This eliminates anomalies due to both seasonality and intra-quarter non-linearity, enabling a clearer perspective on where the industry is at. </li>
</ul>


Taiwan companies are required to report revenue on a monthly basis. These updates can help us understand how a given quarter is progressing &amp; predict quarterly earnings ahead of time
Initially we focused on MoM %  increase/decrease. This is useful, but one needs to account for anomalies such as seasonality and potential non-linearity month to month within a given quarter 
We now also provide the monthly YoY revenue comparison. This eliminates anomalies due to both seasonality and intra-quarter non-linearity, enabling a clearer perspective on where the industry is at. 


Semiconductor Real Time Indicators Update

<ul>
<li>Continuous weaknesses to be seen in industrial and general non-AI server semi demand starting 3Q23 and lasting into 1Q24 and some weaknesses in digital consumer semi demand starting 4Q23.</li>
<li>Memory semiconductor vendors see strengths in 4Q23 and continuous improvement in DRAM/NAND price in 1Q24.</li>
<li>We see a healthy mid single digit q/q and y/y decline on 4Q23 MOI but suggest vendors to avoid in next 1-2 months before they guide down the market.</li>
</ul>


Continuous weaknesses to be seen in industrial and general non-AI server semi demand starting 3Q23 and lasting into 1Q24 and some weaknesses in digital consumer semi demand starting 4Q23.
Memory semiconductor vendors see strengths in 4Q23 and continuous improvement in DRAM/NAND price in 1Q24.
We see a healthy mid single digit q/q and y/y decline on 4Q23 MOI but suggest vendors to avoid in next 1-2 months before they guide down the market.


First Run of Tech/Semis' Guidance Tells Us What Industries and Companies to Avoid

<ul>
<li>TSMC, MediaTek, ASPEED and Nanya all announced August revenues with MoM growth, albeit YoY comps remind us that semiconductors are still very much in the depths of a downturn</li>
<li>Global semi sales for July continued their MoM increase for the fifth consecutive month. YTD semi sales are down 18.7% YoY</li>
<li>MediaTek and TSMC announced that the former has just produced its first chip on the latter's 3nm process. Volume production of the Dimensity SOC will be in H2'24. </li>
</ul>


TSMC, MediaTek, ASPEED and Nanya all announced August revenues with MoM growth, albeit YoY comps remind us that semiconductors are still very much in the depths of a downturn
Global semi sales for July continued their MoM increase for the fifth consecutive month. YTD semi sales are down 18.7% YoY
MediaTek and TSMC announced that the former has just produced its first chip on the latter's 3nm process. Volume production of the Dimensity SOC will be in H2'24. 


Semiconductor Events Deserving Your Attention @9/9/23

Taiwan

ASPEED Technology Inc. is a fabless IC-design house that specializes in server management, PC/AV extensions solution, desktop virtualization and security enhancement. The Company's products range from silicon chips, IPs to software products that enable sophisticated SOC- centric multimedia, praphics and new work applications.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Aspeed Technology (5274 TT)

Asian Equities: The SMID Compounders

We identify 28 inexpensive consistent compounders among the Asian small and mid-cap stocks. Onshore China (18) and India (5) dominate the list, as...

Manishi Raychaudhuri

What to Avoid if AI Server Will Continue to Squeeze General Server Market in 2024-2025?

Names to Avoid if AI Server Will Continue to Squeeze General Server Market in 2024-2025? Different from consensus, we expect non AI server market...

Andrew Lu

Semiconductor Real Time Indicators Update

Tracking monthly revenues of Taiwan semiconductor companies helps us identify key trends mid-quarter. Initially we tracked the MoM revenue changes....

William Keating

First Run of Tech/Semis' Guidance Tells Us What Industries and Companies to Avoid

First Run of Tech/Semis' Guidance Tells Us What Industries and Companies to Avoid; Weaknesses to be seen in industrial, general non-AI server semi,...

Andrew Lu

Semiconductor Events Deserving Your Attention @9/9/23

August revenue numbers for TSMC, ASPEED, MediaTek and Nanya all showing MoM increases but YoY comp are still terrible for most. Semi sales for July...

William Keating

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)