Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Thematic (Sector/Industry)

<ul>
<li>A week that started negative was saved by a stronger outlook from Apple</li>
<li>Electric vehicles remain a source of strong demand for both hardware and semiconductors</li>
<li>Hardware earnings season is coming in stronger than that for semiconductors</li>
</ul>


A week that started negative was saved by a stronger outlook from Apple
Electric vehicles remain a source of strong demand for both hardware and semiconductors
Hardware earnings season is coming in stronger than that for semiconductors


Taiwan Tech Weekly - Buoyed by Apple Outlook

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Broad global MSCI equity indexes (ACWI,ACWI ex-U.S.,EAFE, and EM) remain bearish with YTD downtrends intact. Until these indexes reverse downtrends, we are bearish and view bounces as bear market rallies.</li>
<li>Major non-U.S. countries appear to be much further along in the bottoming process, a potential sign that U.S. indexes could take a back seat once global equities finally bottom.</li>
<li>Indexes that have not made a new low since March: Nikkei 225, TOPIX, TOPIX Small, Hang Seng, Europe’s EURO STOXX 50, and China's MSCI China (MCHI-US) and China Internet (KWEB-US).</li>
</ul>


Broad global MSCI equity indexes (ACWI,ACWI ex-U.S.,EAFE, and EM) remain bearish with YTD downtrends intact. Until these indexes reverse downtrends, we are bearish and view bounces as bear market rallies.
Major non-U.S. countries appear to be much further along in the bottoming process, a potential sign that U.S. indexes could take a back seat once global equities finally bottom.
Indexes that have not made a new low since March: Nikkei 225, TOPIX, TOPIX Small, Hang Seng, Europe’s EURO STOXX 50, and China's MSCI China (MCHI-US) and China Internet (KWEB-US).


Hang Seng, MSCI China Near Major Base Breakouts; Bottoms-Up Stock Rec's in Hong Kong, China, & Japan

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>A recent shift in momentum has pushed Taiwan to the largest country level underweight in the Asia Ex-Japan region</li>
<li>Taiwan Technology stocks have driven allocations lower, in addition to Consumer Discretionary and Staples, Health Care and Financials.</li>
<li>Taiwan Tech remains the key risk.  Sentiment is starting to waver when funds are close to maximum exposure.  Underperformance here will be costly on both an absolute a relative basis</li>
</ul>


A recent shift in momentum has pushed Taiwan to the largest country level underweight in the Asia Ex-Japan region
Taiwan Technology stocks have driven allocations lower, in addition to Consumer Discretionary and Staples, Health Care and Financials.
Taiwan Tech remains the key risk.  Sentiment is starting to waver when funds are close to maximum exposure.  Underperformance here will be costly on both an absolute a relative basis


Taiwan Moves to Top Underweight, Tech Overweight Risk

Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

Hon Hai Precision Industry / Equity Bottom-Up

<ul>
<li>Hon Hai's revenue was NT$1,408bn in 1Q22. We expect the OPM and EPS would be ~2.2% and ~NT$2.18 in 1Q22.</li>
<li>It's a gradually increase for end-product shipment in 2021, but we think it might be followed by a slower season in 2Q22.</li>
<li>Hon Hai's target is to address the profit in 2022. For 2022, we believe it could be the lowest revenue in 2Q22.</li>
</ul>


Hon Hai's revenue was NT$1,408bn in 1Q22. We expect the OPM and EPS would be ~2.2% and ~NT$2.18 in 1Q22.
It's a gradually increase for end-product shipment in 2021, but we think it might be followed by a slower season in 2Q22.
Hon Hai's target is to address the profit in 2022. For 2022, we believe it could be the lowest revenue in 2Q22.


Hon Hai (2317.TT): 1Q22 Preview/2Q22 Outlook- For 2022, It Could Be the Lowest Revenue in 2Q22.

<ul>
<li>All of the Hon Hai's 4 product-lines were growing double digits in March. </li>
<li>In 1Q22, Hon Hai's revenue was NT$1,408.2bn, which was -25.5% QoQ and 4.83% YoY respectively. The 1Q22 revenue was a bit better than the original expectation.</li>
<li>Although Hon Hai is confident, we think the visibility is still a bit of ambiguous in 2Q22.</li>
</ul>


All of the Hon Hai's 4 product-lines were growing double digits in March. 
In 1Q22, Hon Hai's revenue was NT$1,408.2bn, which was -25.5% QoQ and 4.83% YoY respectively. The 1Q22 revenue was a bit better than the original expectation.
Although Hon Hai is confident, we think the visibility is still a bit of ambiguous in 2Q22.


Hon Hai (2317.TT): March Revenue Was Highest at the Same Period of Record.

Taiwan

Hon Hai Precision Industry Co., Ltd. provides electronic manufacturing services for computers, communications, and consumer electronic products.  The Company's business operations include desktop and notebook PC assembly, connector production, cable assembly, PCB assembly, handset manufacturing, networking equipment, and other consumer electronic devices manufacturing.

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Hon Hai Precision Industry (2317 TT)

Taiwan Tech Weekly - Buoyed by Apple Outlook

How stronger Apple outlook has helped support the hardware and semiconducotor space and where the earnins season is performing best so far

Vincent Fernando, CFA

Hang Seng, MSCI China Near Major Base Breakouts; Bottoms-Up Stock Rec's in Hong Kong, China, & Japan

Hong Kong's Hang Seng and China's $MCHI and $KWEB are near major base breakouts. We are watching is 22,700 on Hang Seng and $56.60 on MCHI; we are...

Vermilion Research

Taiwan Moves to Top Underweight, Tech Overweight Risk

A recent shift in momentum has pushed Taiwan to the largest country level underweight in the Asia Ex-Japan region, with the Technology sector one...

Steven Holden

Hon Hai (2317.TT): 1Q22 Preview/2Q22 Outlook- For 2022, It Could Be the Lowest Revenue in 2Q22.

Hon Hai's revenue was NT$1,408bn in 1Q22. We expect the OPM and EPS would be ~2.2% and ~NT$2.18 in 1Q22. We think it might be followed a slower...

Patrick Liao

Hon Hai (2317.TT): March Revenue Was Highest at the Same Period of Record.

All of the Hon Hai's 4 product-lines were growing double digits in March. In 1Q22, Hon Hai's revenue was NT$1,408.2bn, which was -25.5% QoQ and...

Patrick Liao

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