Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/aem-holdings-ltd" target="_blank" data-smartkarma-citation="entities:11019:1" rel="noopener">AEM (AEM SP)</a> reported weak results last week but subsequently announced a 103 million SGD investment by Temasek. The Temasek investment comes ahead of an expected strong 2H21 and 2022 but more importantly right ahead of probable new major customer wins. As well documented AEM is highly dependent on <a href="https://www.smartkarma.com/entities/intel-corp" target="_blank" data-smartkarma-citation="entities:16764:1" rel="noopener">Intel Corp (INTC US)</a> for 80% of its revenues and needs new customers to diversify. Management has quietly been forming new relationships and is in various trial phases with some of the largest semiconductor companies other than Intel. During 1Q21's conf call we first heard of management's growing optimism and this was again reiterated in 2Q21.On the 3Q20 call AEM's Chairman Loke Wai San was asked if he would consider a Nasdaq listing. His answer at the time was "once we get to a billion USD market cap we can consider it". The combination of the Temasek investment and the anticipated major new customer wins will likely get us there. In this regard <a href="https://www.straitstimes.com/business/companies-markets/sgx-and-nasdaq-extend-partnership-to-help-firms-access-capital" target="_blank" rel="noopener">please recall</a> that in July 2020 SGX and Nasdaq agreed to make "dual-listings" between both exchanges easier. What better company to kick-off this agreement than AEM?Fair Value increases to 8 SGD (20x P/E on 0.40 SGD FY22 EPS). Recall, AEM already earned 0.35 SGD EPS in 2020, so assuming new customer wins materialize 0.40 SGD is not a stretch.

AEM (AEM SP) reported weak results last week but subsequently announced a 103 million SGD investment by Temasek. The Temasek investment comes ahead of an expected strong 2H21 and 2022 but more importantly right ahead of probable new major customer wins. As well documented AEM is highly dependent on Intel Corp (INTC US) for 80% of its revenues and needs new customers to diversify. Management has quietly been forming new relationships and is in various trial phases with some of the largest semiconductor companies other than Intel. During 1Q21's conf call we first heard of management's growing optimism and this was again reiterated in 2Q21.On the 3Q20 call AEM's Chairman Loke Wai San was asked if he would consider a Nasdaq listing. His answer at the time was "once we get to a billion USD market cap we can consider it". The combination of the Temasek investment and the anticipated major new customer wins will likely get us there. In this regard please recall that in July 2020 SGX and Nasdaq agreed to make "dual-listings" between both exchanges easier. What better company to kick-off this agreement than AEM?Fair Value increases to 8 SGD (20x P/E on 0.40 SGD FY22 EPS). Recall, AEM already earned 0.35 SGD EPS in 2020, so assuming new customer wins materialize 0.40 SGD is not a stretch.

AEM: Temasek Investment + New Customers = Pre-Cursor to Nasdaq Listing? Fair Value to 8 SGD

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)

2020 turned out to be a record year for semiconductor equipment sales with revenues of North American vendors increasing 22.5% sequentially to reach an all time high of $29.7 billion. On the back of a step-function CapEx 2021 forecast increase by <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC</a> and ever-increasing reports of chip shortages, particularly in the automotive industry, the outlook for the current year is also looking particularly strong. Here's our analysis of the sector and why we see it going from strength to strength.

2020 turned out to be a record year for semiconductor equipment sales with revenues of North American vendors increasing 22.5% sequentially to reach an all time high of $29.7 billion. On the back of a step-function CapEx 2021 forecast increase by TSMC and ever-increasing reports of chip shortages, particularly in the automotive industry, the outlook for the current year is also looking particularly strong. Here's our analysis of the sector and why we see it going from strength to strength.

Semiconductor WFE. Going From Strength To Strength.

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

Our bullish outlook, intact since early November, has been based on the fact that virtually all signals from the market have been consistent with risk-on behavior that we would expect to see in bull markets. Now, the picture is less clear; we are still bullish, just slightly less so than we have been over the past 2-3 months. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary, Health Care, Manufacturing, and Technology.

Our bullish outlook, intact since early November, has been based on the fact that virtually all signals from the market have been consistent with risk-on behavior that we would expect to see in bull markets. Now, the picture is less clear; we are still bullish, just slightly less so than we have been over the past 2-3 months. In today’s report we highlight attractive Groups and stocks within Consumer Discretionary, Health Care, Manufacturing, and Technology.

U.S. Equity Strategy: Downgrading Manufacturing & Transports

In our November Strategy book we summarize the basis for our bullish outlook, discuss the deservedly hot topic of value vs. growth. and highlight actionable opportunities within our Manufacturing, Transportation, Materials, Technology, &amp; Consumer Discretionary Sectors.

In our November Strategy book we summarize the basis for our bullish outlook, discuss the deservedly hot topic of value vs. growth. and highlight actionable opportunities within our Manufacturing, Transportation, Materials, Technology, &amp; Consumer Discretionary Sectors.

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Semiconductor Manufacturing International Corp (SMIC) / Equity Bottom-Up

Semiconductor Manufacturing International Corp (SMIC)

The US Department of Commerce has added SMIC to its Entity List with the intent of limiting the company's access to US technology.  This Smartkarma Insight explores what that might mean to the company, to  China's national semiconductor efforts, and to SMIC's US-based tool suppliers.

The US Department of Commerce has added SMIC to its Entity List with the intent of limiting the company's access to US technology.  This Smartkarma Insight explores what that might mean to the company, to  China's national semiconductor efforts, and to SMIC's US-based tool suppliers.

United States

Applied Materials, Inc. develops, manufactures, markets, and services semiconductor wafer fabrication equipment and related spare parts for the worldwide semiconductor industry.  The Company's customers include semiconductor wafer and integrated circuit manufacturers, flat panel liquid crystal displays, solar photovoltaic cells and modules and other electronic devices manufacturers.

Lam Research Corporation manufactures, markets, and services semiconductor processing equipment used in the making of integrated circuits.  The Company's products are used to deposit special films on a silicon wafer and etch away portions of various films to create a circuit design.  Lam sells its products around the world.

Monolithic Power Systems Inc specializes in high-performance, integrated power solutions. The Company provides small, highly energy efficient, easy-to-use power solutions for systems found in industrial applications, telecom infrastructures, cloud computing, automotive, and consumer applications.

ON Semiconductor Corporation supplies analog, standard logic, and discrete semiconductors for data and power management. The Company's products include integrated circuits, and analog ICs. ON also offers discrete semiconductors in a variety of surface mount and standard packages.

Skyworks Solutions, Inc., a wireless semiconductor company, designs and manufactures radio frequency and complete semiconductor system solutions for mobile communications applications.  The Company provides front-end modules, radio frequency subsystems, and system solutions to wireless handset and infrastructure customers worldwide.

Microchip Technology Incorporated designs, manufactures, and markets microcontrollers, related mixed-signal and memory products, and application development systems for high-volume embedded control applications. The Company also designs, develops, and markets linear/mixed-signal, power management, and thermal management products.

Entegris Inc. provides materials management products and services to the microelectronics industry on a worldwide basis.  The Company provides products such as wafer shippers, wafer transport and process carriers, pods, and work-in-process boxes.  Entegris also provides chemical delivery products such as valves, fittings, tubing, pipe, and containers.

Analog Devices, Inc. designs, manufactures, and markets integrated circuits used in analog and digital signal processing.  The Company's products are used in communications, computer, industrial, instrumentation, military/aerospace, automotive, and high-performance consumer electronics applications.  Analog Devices sells its products worldwide.

Teradyne, Inc. designs, manufactures, sells, and supports semiconductor test products and services on a world wide basis. The Company's test equipment products and services include: semiconductor test systems, military/aerospace test instrumentation and systems, circuit-board test and inspection systems and automotive diagnostic and test systems.

Micron Technology, Inc., through its subsidiaries, manufactures and markets dynamic random access memory chips (DRAMs), very fast static random access memory chips (SRAMs), Flash Memory, other semiconductor components, and memory modules.

Tokyo Electron Limited manufactures and sells industrial electronics products, such as semiconductor manufacturing machines, computer system, and electronic components.  The Company products are sold in US, Taiwan, and others as well as in Japan.

ASE Technology Holding Co., Ltd. offers assembly and testing services. The Company provides outsourced assembly, semiconductor testing, semiconductor packaging, and other related services. ASE Technology Holding operates in Taiwan.

MediaTek Inc. is a fabless semiconductor company for wireless communications and digital multimedia solutions. The company provides SOC system solutions for wireless communications, high-definition TV, optical storage, DVD and Blu-ray products.

Lasertec Corporation develops, designs, manufactures and markets photomask inspection systems to make semiconductor devices, confocal scanning laser microscopes and liquid crystal display (LCD) inspection systems.

United Microelectronics Corporation designs, manufactures, and markets integrated circuits (ICs) and related electronic products.  The Company's main products are consumer electronic ICs, memory ICs, personal computer peripheral ICs, and communication ICs.

NXP Semiconductors NV operates as a global semiconductor company. The Company designs semiconductors and software for mobile communications, consumer electronics, security applications, in-car entertainment, and networking.  NXP offers its products to the automotive, identification, wireless infrastructure, lighting, mobile, and computing applications.

LONGi Green Energy Technology Co., Ltd. develops, manufactures and sells silicon rods and silicon wafers. The Company's main products include 6 inch, 6.5 inch and 8 inch monocrystalline silicon rods and wafers.

LONGi Green Energy Technology (601012 CH)

Semiconductor Manufacturing International Corporation operates a semiconductor foundry. The Company provides integrated circuit foundry and technology services including the testing, development, design, manufacturing, packaging, and sale of integrated circuits. Semiconductor Manufacturing International offers its products and services around the world.

Semiconductor Manufacturing International Corp (SMIC) (981 HK)

DISCO CORPORATION manufactures abrasive and precision industrial machinery for cutting and grinding purposes.  The Company's products are applied in the semiconductor, electronics, and construction industries to produce consumer goods such as personal computers, digital cameras, video game systems, and Digital Video Disc (DVD) players.

Renesas Electronics Corporation researches, develops, designs and manufactures electronic components such as semiconductors and integrated devices.

KLA-Tencor Corporation manufactures yield management and process monitoring systems for the semiconductor industry.  The Company's systems are used to analyze product and process quality at critical steps in the manufacture of circuits and provide feedback so that fabrication problems can be identified. KLA-Tencor operates sales, service, and application centers worldwide.

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KLA-Tencor Corp (KLAC US)

AEM: Temasek Investment + New Customers = Pre-Cursor to Nasdaq Listing? Fair Value to 8 SGD

AEM remains a top pick as it digests the Temasek investment and gets ready to list on Nasdaq in 2022. Major new customer wins are likely as...

Nicolas Van Broekhoven

Semiconductor WFE. Going From Strength To Strength.

Semiconductor WFE revenues grew by around 20% in 2020. We expect similar, if not stronger, growth in 2021. Here's why we see the sector going from...

William Keating

U.S. Equity Strategy: Downgrading Manufacturing & Transports

In today’s report we highlight attractive Groups and stocks within Consumer Discretionary, Health Care, Manufacturing, and Technology

Vermilion Research

U.S. Equity Strategy: Remain Bullish

In our November Strategy book we summarize the basis for our bullish outlook, discuss the deservedly hot topic of value vs. growth. and highlight...

Vermilion Research

US Government Puts the Squeeze on SMIC

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Jim Handy

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