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

Thematic (Sector/Industry)

Since its emergence as the technology underpinning Bitcoin over a decade ago, blockchain has captured the imagination of technologists, investors and charlatans in roughly equal measure. Blockchain has been portrayed by its advocates as the solution to some of the most fundamental challenges facing modern-day society including free and fair elections, the protection of identity records and title deeds, supply chain integrity and, of course, enabling all manner of exotic cryptocurrencies. Little wonder then that we experienced a wave of blockchain mania which coincided with a similar level of cryptocurrency mania in late 2017. During that time, companies were adding "Blockchain" to their names and seeing their share prices soar by many multiples within weeks. Just as the crypto bubble burst in early 2018, so too did the blockchain bubble. Share prices of so-called blockchain companies collapsed just as quickly as they had risen. Testifying before a US senate committee in October 2018, professor of economics Nouriel Roubini was scathing in his criticism of blockchain <a href="https://www.banking.senate.gov/imo/media/doc/Roubini%20Testimony%2010-11-18.pdf" target="_blank" rel="noopener">referring</a> to it as  “The most over-hyped technology ever, no better than a spreadsheet/database”.
 Now, as the dust settles and the mania fades, we witness the emergence of a new class of enterprise-grade blockchain implementations led by the likes Hyperledger, Corda and various customisations of Ethereum. While the blockchain technologies supporting the likes of Bitcoin and Ethereum are public in so far as the data they contain is accessible by anybody who wishes to view it, these enterprise blockchain implementations are private, a necessary prerequisite for their potential deployment at major corporations and financial institutions. This distinction, along with a number of other important differences, means that enterprise blockchain represents a significant departure from the original public blockchain concept.
Today, enterprise blockchain is being deployed to tackle challenges across a swathe of verticals thanks to the likes of the Big Four consulting firms striving to position it at the heart of their business process reengineering practices. From Maersk to Walmart, they are convincing some of the world's biggest conglomerates to tackle age-old issues relating to outdated, inefficient, labor intensive business practices, all in the name of  blockchain.
It's not just the Big Four that are cashing in on enterprise blockchain. Professional services firm Accenture is investing heavily in its blockchain consulting practice. Blockchain as a Service (BaaS) solutions are available from enterprise software giants <a href="https://www.smartkarma.com/entities/intl-business-machines-corp" target="_blank" data-smartkarma-citation="entities:1064:1" rel="noopener">Intl Business Machines</a>, <a href="https://www.smartkarma.com/entities/oracle-corp" target="_blank" data-smartkarma-citation="entities:1065:1" rel="noopener">Oracle</a>,  <a href="https://www.sap.com/hk/index.html" target="_blank" rel="noopener">SAP</a> and <a href="https://www.smartkarma.com/entities/microsoft-corp" target="_blank" data-smartkarma-citation="entities:15273:1" rel="noopener">Microsoft </a>and more recently from China’s <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba </a>and <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu</a>. <a href="https://www.smartkarma.com/entities/intel-corp" target="_blank" data-smartkarma-citation="entities:16764:1" rel="noopener">Intel </a>wants to ensure that enterprise blockchains runs best on its servers while Microsoft and <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon </a>want to host them on their clouds. It's little surprise then that enterprise and government spending on blockchain is expected to reach $2.9 billion in 2019, an increase of 89% over the previous year according to <a href="https://www.idc.com/getdoc.jsp?containerId=prUS44898819" target="_blank" rel="noopener">IDC</a>. Furthermore, they predict that spending on enterprise blockchain will reach $$ja12.4 billion by 2022.
In common with Roubini, our belief has long been that blockchain as a technology offers little that was not already available elsewhere and before. Enterprise blockchains bear little resemblance to the technical ingenuity that gave us Bitcoin, but which is otherwise largely useless. The populist mantra that enterprise blockchain has the ability to transform the business processes of major corporations, key industry verticals and governments is a largely a delusion in our opinion. <a href="https://www.mckinsey.com/industries/financial-services/our-insights/blockchains-occam-problem" target="_blank" rel="noopener">This</a> recent report from McKinsey further supports our perspective, noting that blockchain has yet to become the game-changer some expected and recommending that it should only be considered when it is the simplest solution available.
Paradoxically, if the allure of blockchain can be leveraged as the motivating factor to undertake the much-needed digital transformation and business process re-engineering required to modernize outdated, legacy practices and procedures, then it may indeed have some inherent, albeit unintended, value. Furthermore, our interviews with the CEOs of two small, privately held startups clearly indicated that they are actually finding important, albeit niche, use cases for blockchain technologies in their solution stacks.  In this context, it makes sense to view blockchain as an emerging technology actively seeking real-world use cases and likely to be strongly promoted by its proponents in the coming years.
Against this backdrop, how should investors think about the investment opportunities for blockchain? For starters, venture capital interest grew significantly in 2018 with some $5.4 billion invested in blockchain related startups, up from $1.5 billion the previous year according to <a href="https://next.autonomous.com/thoughts/crypto-blockchain-lands-at-24b-in-2018-funding-1b-in-stos-coming" target="_blank" rel="noopener">Autonomous Research</a>. Nonetheless, our analysis of multiple categories of companies with blockchain exposure reveals a harsh reality. Neither their blockchain related revenues nor any cost savings directly attributable to the technology are significant enough to have any meaningful impact on their valuations from a fundamentals perspective, a situation we do not expect to change any time soon. The same holds true for the blockchain-related ETFs and hedge funds we examined.
On a more positive note, there are some excellent companies doing exciting things with blockchain and related technologies. Privately held GuardTime and Digital Assets should be on investors watch lists for funding rounds and IPOs. We expect publicly listed <a href="https://www.garage.co.jp/en/" target="_blank" rel="noopener">Digital Garage</a> and <a href="https://www.broadridge.com/intl/" target="_blank" rel="noopener">Broadridge Financial Solutions</a> to continue to perform well and feel that they should be considered as part of a broader fintech portfolio. By the same token, we are positive on the growth opportunities of blockchain-associated multinationals such as <a href="https://www.microsoft.com/en-hk" target="_blank" rel="noopener">Microsoft</a>, <a href="https://www.ibm.com/hk-en" target="_blank" rel="noopener">IBM</a>, <a href="https://www.visa.com.hk/en_HK" target="_blank" rel="noopener">Visa</a>, <a href="https://www.mastercard.us/en-us.html" target="_blank" rel="noopener">Mastercard</a> etc, albeit for reasons that have little to do with blockchain.

Since its emergence as the technology underpinning Bitcoin over a decade ago, blockchain has captured the imagination of technologists, investors and charlatans in roughly equal measure. Blockchain has been portrayed by its advocates as the solution to some of the most fundamental challenges facing modern-day society including free and fair elections, the protection of identity records and title deeds, supply chain integrity and, of course, enabling all manner of exotic cryptocurrencies. Little wonder then that we experienced a wave of blockchain mania which coincided with a similar level of cryptocurrency mania in late 2017. During that time, companies were adding "Blockchain" to their names and seeing their share prices soar by many multiples within weeks. Just as the crypto bubble burst in early 2018, so too did the blockchain bubble. Share prices of so-called blockchain companies collapsed just as quickly as they had risen. Testifying before a US senate committee in October 2018, professor of economics Nouriel Roubini was scathing in his criticism of blockchain referring to it as  “The most over-hyped technology ever, no better than a spreadsheet/database”.
 Now, as the dust settles and the mania fades, we witness the emergence of a new class of enterprise-grade blockchain implementations led by the likes Hyperledger, Corda and various customisations of Ethereum. While the blockchain technologies supporting the likes of Bitcoin and Ethereum are public in so far as the data they contain is accessible by anybody who wishes to view it, these enterprise blockchain implementations are private, a necessary prerequisite for their potential deployment at major corporations and financial institutions. This distinction, along with a number of other important differences, means that enterprise blockchain represents a significant departure from the original public blockchain concept.
Today, enterprise blockchain is being deployed to tackle challenges across a swathe of verticals thanks to the likes of the Big Four consulting firms striving to position it at the heart of their business process reengineering practices. From Maersk to Walmart, they are convincing some of the world's biggest conglomerates to tackle age-old issues relating to outdated, inefficient, labor intensive business practices, all in the name of  blockchain.
It's not just the Big Four that are cashing in on enterprise blockchain. Professional services firm Accenture is investing heavily in its blockchain consulting practice. Blockchain as a Service (BaaS) solutions are available from enterprise software giants Intl Business Machines, Oracle,  SAP and Microsoft and more recently from China’s Alibaba and Baidu. Intel wants to ensure that enterprise blockchains runs best on its servers while Microsoft and Amazon want to host them on their clouds. It's little surprise then that enterprise and government spending on blockchain is expected to reach $2.9 billion in 2019, an increase of 89% over the previous year according to IDC. Furthermore, they predict that spending on enterprise blockchain will reach $$ja12.4 billion by 2022.
In common with Roubini, our belief has long been that blockchain as a technology offers little that was not already available elsewhere and before. Enterprise blockchains bear little resemblance to the technical ingenuity that gave us Bitcoin, but which is otherwise largely useless. The populist mantra that enterprise blockchain has the ability to transform the business processes of major corporations, key industry verticals and governments is a largely a delusion in our opinion. This recent report from McKinsey further supports our perspective, noting that blockchain has yet to become the game-changer some expected and recommending that it should only be considered when it is the simplest solution available.
Paradoxically, if the allure of blockchain can be leveraged as the motivating factor to undertake the much-needed digital transformation and business process re-engineering required to modernize outdated, legacy practices and procedures, then it may indeed have some inherent, albeit unintended, value. Furthermore, our interviews with the CEOs of two small, privately held startups clearly indicated that they are actually finding important, albeit niche, use cases for blockchain technologies in their solution stacks.  In this context, it makes sense to view blockchain as an emerging technology actively seeking real-world use cases and likely to be strongly promoted by its proponents in the coming years.
Against this backdrop, how should investors think about the investment opportunities for blockchain? For starters, venture capital interest grew significantly in 2018 with some $5.4 billion invested in blockchain related startups, up from $1.5 billion the previous year according to Autonomous Research. Nonetheless, our analysis of multiple categories of companies with blockchain exposure reveals a harsh reality. Neither their blockchain related revenues nor any cost savings directly attributable to the technology are significant enough to have any meaningful impact on their valuations from a fundamentals perspective, a situation we do not expect to change any time soon. The same holds true for the blockchain-related ETFs and hedge funds we examined.
On a more positive note, there are some excellent companies doing exciting things with blockchain and related technologies. Privately held GuardTime and Digital Assets should be on investors watch lists for funding rounds and IPOs. We expect publicly listed Digital Garage and Broadridge Financial Solutions to continue to perform well and feel that they should be considered as part of a broader fintech portfolio. By the same token, we are positive on the growth opportunities of blockchain-associated multinationals such as Microsoft, IBM, Visa, Mastercard etc, albeit for reasons that have little to do with blockchain.
  

The Blockchain Delusion. A (Mostly) Bearish Investment Thesis.

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>BABA/ JD/ PDD/ 1024.HK/ ZTO/ 1519.HK: Double 11 eCommerce update (+)</li>
<li>BABA/BIDU/700HK: Alibaba Cloud crashed for several hours during the weekend (-/+/+)</li>
<li>On November 12, 2023 Alibaba Cloud reportedly crashed for several hours, and in the process resulted in outages for Alibaba services and customer websites that stopped functioning properly.</li>
</ul>


BABA/ JD/ PDD/ 1024.HK/ ZTO/ 1519.HK: Double 11 eCommerce update (+)
BABA/BIDU/700HK: Alibaba Cloud crashed for several hours during the weekend (-/+/+)
On November 12, 2023 Alibaba Cloud reportedly crashed for several hours, and in the process resulted in outages for Alibaba services and customer websites that stopped functioning properly.


[Blue Lotus Daily] BABA/JD/PDD/1024.HK/ZTO/1519.HK/BIDU/Tencent 700.HK

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Capital Markets

Tianju Dihe Technology / Equity Capital Markets

<ul>
<li>Tianju Dihe Technology, more commonly known as Juhe Data, filed to go public in Hong Kong. The company provides standard API services through its APIHub marketplace in China. </li>
<li>Tianju Dihe Technology plans to trade on the HKSE, and CITIC Securities is leading the IPO. The company was backed by JD Technology, a fintech unit of JD.com. </li>
<li>With a market leadership position and a mission to empower the digital economy with data technologies, I have no doubt that Tianju Dihe Technology will have a successful IPO.</li>
</ul>


Tianju Dihe Technology, more commonly known as Juhe Data, filed to go public in Hong Kong. The company provides standard API services through its APIHub marketplace in China. 
Tianju Dihe Technology plans to trade on the HKSE, and CITIC Securities is leading the IPO. The company was backed by JD Technology, a fintech unit of JD.com. 
With a market leadership position and a mission to empower the digital economy with data technologies, I have no doubt that Tianju Dihe Technology will have a successful IPO.


Tianju Dihe Technology IPO Preview: Data Drives The Future

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/calb-group-co-ltd" target="_blank" data-smartkarma-citation="entities:35985:1" rel="noopener">CALB Group (3931 HK)</a> raised around US$1.2bn in its Hong Kong IPO in Oct 2022. The lockup on its pre-IPO shareholders will expire tomorrow.</li>
<li>CALB undertakes design, R&amp;D, production and sales of EV batteries and Energy Storage Systems (ESS) products in China.</li>
<li>In this note, we will talk about the lock-up dynamics and updates since our last note.</li>
</ul>



CALB Group (3931 HK) raised around US$1.2bn in its Hong Kong IPO in Oct 2022. The lockup on its pre-IPO shareholders will expire tomorrow.
CALB undertakes design, R&amp;D, production and sales of EV batteries and Energy Storage Systems (ESS) products in China.
In this note, we will talk about the lock-up dynamics and updates since our last note.


CALB IPO Lock-Up - US$2.6bn Lockup Release but Mostly SOE Owned

Equity Bottom-Up

<ul>
<li>4Paradigm, a self-developed AI platform and scenario-specific AI applications provider, has completed an IPO and raised net proceeds of ~HK$836M, excluding the over-allotment option. </li>
<li>Founder-Led AI unicorn priced its IPO at the bottom end of the range at HK$55.60 per share. Cornerstone investors agreed to purchase ~13.6M H shares at the IPO price. </li>
<li>I like the company’s leadership position in China’s fastest-growing decision-making AI market, large TAM for their enterprise-grade generative AI offering SageGPT and top-tier VC investors. </li>
</ul>


4Paradigm, a self-developed AI platform and scenario-specific AI applications provider, has completed an IPO and raised net proceeds of ~HK$836M, excluding the over-allotment option. 
Founder-Led AI unicorn priced its IPO at the bottom end of the range at HK$55.60 per share. Cornerstone investors agreed to purchase ~13.6M H shares at the IPO price. 
I like the company’s leadership position in China’s fastest-growing decision-making AI market, large TAM for their enterprise-grade generative AI offering SageGPT and top-tier VC investors. 


4Paradigm: Fears About The Entity List Are Exaggerated, Bullish On AI and SageGPT, PT: HK$86

China

Baidu, Inc. operates an Internet search engine. The Company offers algorithmic search, enterprise search, news, MP3, and image searches, voice assistance, online storage, and navigation services. Baidu serves clients globally.

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Baidu (BIDU US)

The Blockchain Delusion. A (Mostly) Bearish Investment Thesis.

Back when I wrote this, Blockchain was all the rage, but I struggled to see the true value proposition, felt there was a huge amount of hype...

William Keating

[Blue Lotus Daily] BABA/JD/PDD/1024.HK/ZTO/1519.HK/BIDU/Tencent 700.HK

Double 11 eCommerce update;Alibaba Cloud reportedly crashed for several hours during last weekend, third-party Alibaba Cloud Customers were also...

Blue Lotus Research Institute

Tianju Dihe Technology IPO Preview: Data Drives The Future

Tianju Dihe Technology, a leading provider of API services in China, filed to go public. With healthy fundamentals, a large and growing TAM, I have...

Andrei Zakharov

CALB IPO Lock-Up - US$2.6bn Lockup Release but Mostly SOE Owned

CALB Group (3931 HK) raised around US$1.2bn in its Hong Kong IPO in Oct 2022. The lockup on its pre-IPO shareholders will expire tomorrow.

Sumeet Singh

4Paradigm: Fears About The Entity List Are Exaggerated, Bullish On AI and SageGPT, PT: HK$86

4Paradigm, a Beijing-based enterprise AI software company, has completed its IPO in Hong Kong. I maintain a bullish view of the stock, and my PT of...

Andrei Zakharov

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

The Blockchain Delusion. A (Mostly) Bearish Investment Thesis.

Back when I wrote this, Blockchain was all the rage, but I struggled to see the true value proposition, felt there was a huge amount of hype...

William Keating

[Blue Lotus Daily] BABA/JD/PDD/1024.HK/ZTO/1519.HK/BIDU/Tencent 700.HK

​Double 11 eCommerce update;Alibaba Cloud reportedly crashed for several hours during last weekend, third-party Alibaba Cloud Customers were also...

Blue Lotus Research Institute

Tianju Dihe Technology IPO Preview: Data Drives The Future

Tianju Dihe Technology, a leading provider of API services in China, filed to go public. With healthy fundamentals, a large and growing TAM, I have...

Andrei Zakharov

CALB IPO Lock-Up - US$2.6bn Lockup Release but Mostly SOE Owned

CALB Group (3931 HK) raised around US$1.2bn in its Hong Kong IPO in Oct 2022. The lockup on its pre-IPO shareholders will expire tomorrow.

Sumeet Singh

4Paradigm: Fears About The Entity List Are Exaggerated, Bullish On AI and SageGPT, PT: HK$86

4Paradigm, a Beijing-based enterprise AI software company, has completed its IPO in Hong Kong. I maintain a bullish view of the stock, and my PT of...

Andrei Zakharov

Double 11 eCommerce update;Alibaba Cloud reportedly crashed for several hours during last weekend, third-party Alibaba Cloud Customers were also...