Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

Equity Bottom-Up

Himax Technologies Inc Adr / Equity Bottom-Up

<ul>
<li>Himax 2Q24 Results Showed Continued Margin Strength But Management Provided Cautious Outlook for 3Q24E Amidst Chinese Market Weakness</li>
<li>Himax's AI Sensing and AI/HPC Optical Data Transfer Growth Opportunity for 2025E -- Investments into Obsidian Sensors &amp; FOCI</li>
<li>Himax -- Maintain as a Structural Long; Market Sell-Off Opens Accumulation Opportunity</li>
</ul>


Himax 2Q24 Results Showed Continued Margin Strength But Management Provided Cautious Outlook for 3Q24E Amidst Chinese Market Weakness
Himax's AI Sensing and AI/HPC Optical Data Transfer Growth Opportunity for 2025E -- Investments into Obsidian Sensors &amp; FOCI
Himax -- Maintain as a Structural Long; Market Sell-Off Opens Accumulation Opportunity


Himax Sees China Automotive Market Softening; AI Sensing and AI/HPC Optics Opportunities Expanding

<ul>
<li>Automotive display driver IC leader Himax reported 1Q24 results last week that were ahead of guidance. The company also guided for rising margins.</li>
<li>Management believes 1Q24 represents a cyclical bottom for the company's financial performance and expects automotive demand to rise in 2H24E.</li>
<li>Himax rallied but remains 55% below its 2021 highs, yet its market opportunity larger than ever. Himax could be benefitting from different positioning within automotive chips than NXP &amp; Infineon.</li>
</ul>


Automotive display driver IC leader Himax reported 1Q24 results last week that were ahead of guidance. The company also guided for rising margins.
Management believes 1Q24 represents a cyclical bottom for the company's financial performance and expects automotive demand to rise in 2H24E.
Himax rallied but remains 55% below its 2021 highs, yet its market opportunity larger than ever. Himax could be benefitting from different positioning within automotive chips than NXP &amp; Infineon.


Himax: Signs of Automotive Demand Rebound; Why Demand Strength Is Different Than NXP and Infineon

<ul>
<li>We hosted a conference call recently with Himax management, the global leader in automotive touch display controllers; the company is experiencing a uniquely stronger automotive supply/demand environment than some peers.</li>
<li>Discussed in detail how larger or more sophisticated interior displays can drive higher dollar content of display controllers per vehicle. We examine trending new car designs with much larger displays.</li>
<li>We forecast an exponential jump-up in display controller content value per vehicle as beautiful display designs are becoming key USP for auto brands; Maintain our Structural Long rating for Himax.</li>
</ul>


We hosted a conference call recently with Himax management, the global leader in automotive touch display controllers; the company is experiencing a uniquely stronger automotive supply/demand environment than some peers.
Discussed in detail how larger or more sophisticated interior displays can drive higher dollar content of display controllers per vehicle. We examine trending new car designs with much larger displays.
We forecast an exponential jump-up in display controller content value per vehicle as beautiful display designs are becoming key USP for auto brands; Maintain our Structural Long rating for Himax.


TechChain Insights: Call with Himax, How New In-Car Displays Can Quadruple Chip Content Per Vehicle

<ul>
<li>Readthrough: Automotive Applications End-Demand -- China Market Soft But Touch and Dimming Technology is Expanding</li>
<li>Readthrough: Panel Makers Constraining Supply in 1Q24 to Protect Pricing</li>
<li>Readthrough: Customers Are Restocking Notebooks in 1Q24E, PC Replacement Cycle is Coming</li>
</ul>


Readthrough: Automotive Applications End-Demand -- China Market Soft But Touch and Dimming Technology is Expanding
Readthrough: Panel Makers Constraining Supply in 1Q24 to Protect Pricing
Readthrough: Customers Are Restocking Notebooks in 1Q24E, PC Replacement Cycle is Coming


Himax: Industry Readthrough for Automotives, Notebooks, and Edge AI Applications

<ul>
<li>Both Himax and Novatek reported their results last week; both delivered gross margins at the high-end or above their previous guidance.</li>
<li>Both companies showed a continued decline in inventory levels. Himax is trading at one of the cheapest levels relative to Novatek in history.</li>
<li>Novatek sees industry inventory levels as normalized and expects 2024E to be an industry growth year. We rate both stocks as Structural Longs.</li>
</ul>


Both Himax and Novatek reported their results last week; both delivered gross margins at the high-end or above their previous guidance.
Both companies showed a continued decline in inventory levels. Himax is trading at one of the cheapest levels relative to Novatek in history.
Novatek sees industry inventory levels as normalized and expects 2024E to be an industry growth year. We rate both stocks as Structural Longs.


Himax Vs. Novatek Long/Short: Display Industry Inventory Normalized, Growth Expected for 2024E

Taiwan

Himax Technologies, Inc. designs and manufactures integrated circuits.  The Company produces liquid crystal displays (LCD).

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Himax Technologies Inc Adr (HIMX US)

Himax Sees China Automotive Market Softening; AI Sensing and AI/HPC Optics Opportunities Expanding

Himax reported strong margins in 2Q24 but was cautious about 3Q24 due to Chinese market weakness. The company made two key investments in AI...

Vincent Fernando, CFA

Himax: Signs of Automotive Demand Rebound; Why Demand Strength Is Different Than NXP and Infineon

Himax reported strong 1Q24 results, with rising margins and potential for growth in automotive demand. Despite a rally, the company is still below...

Vincent Fernando, CFA

TechChain Insights: Call with Himax, How New In-Car Displays Can Quadruple Chip Content Per Vehicle

We discussed in depth the company's latest insights in how larger interior displays in autos are driving higher dollar content of display...

Vincent Fernando, CFA

Himax: Industry Readthrough for Automotives, Notebooks, and Edge AI Applications

China's automotive market is weak, but touch and dimming technology is expanding rapidly. Panel makers are limiting supply to maintain prices in...

Vincent Fernando, CFA

Himax Vs. Novatek Long/Short: Display Industry Inventory Normalized, Growth Expected for 2024E

Both companies showed a continued decline in inventory levels. Himax is trading at one of the cheapest levels relative to Novatek in history. We...

Vincent Fernando, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Himax Sees China Automotive Market Softening; AI Sensing and AI/HPC Optics Opportunities Expanding

​Himax reported strong margins in 2Q24 but was cautious about 3Q24 due to Chinese market weakness. The company made two key investments in AI...

Vincent Fernando, CFA

Himax: Signs of Automotive Demand Rebound; Why Demand Strength Is Different Than NXP and Infineon

​Himax reported strong 1Q24 results, with rising margins and potential for growth in automotive demand. Despite a rally, the company is still below...

Vincent Fernando, CFA

TechChain Insights: Call with Himax, How New In-Car Displays Can Quadruple Chip Content Per Vehicle

We discussed in depth the company's latest insights in how larger interior displays in autos are driving higher dollar content of display...

Vincent Fernando, CFA

Himax: Industry Readthrough for Automotives, Notebooks, and Edge AI Applications

​China's automotive market is weak, but touch and dimming technology is expanding rapidly. Panel makers are limiting supply to maintain prices in...

Vincent Fernando, CFA

Himax Vs. Novatek Long/Short: Display Industry Inventory Normalized, Growth Expected for 2024E

Both companies showed a continued decline in inventory levels. Himax is trading at one of the cheapest levels relative to Novatek in history. We...

Vincent Fernando, CFA

Himax reported strong margins in 2Q24 but was cautious about 3Q24 due to Chinese market weakness. The company made two key investments in AI...

Himax reported strong 1Q24 results, with rising margins and potential for growth in automotive demand. Despite a rally, the company is still below...

China's automotive market is weak, but touch and dimming technology is expanding rapidly. Panel makers are limiting supply to maintain prices in...