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

<ul>
<li>Dell has outperformed Acer and other Taiwan PC names Asus and MSI by a wide margin. Close Long Dell vs. Short Acer. Dell's value gap has dissipated.</li>
<li>Latest indications from Dell and HP highlight that the AI PC's will drive upgrades from customers, but the PC recovery remains soft. AI PC impact only in 2025E.</li>
<li>Dell and HPQ's recent results provide positive color for upcoming Asus, Acer, and MSI results. Trade: Long Asus into its upcoming earnings results.</li>
</ul>


Dell has outperformed Acer and other Taiwan PC names Asus and MSI by a wide margin. Close Long Dell vs. Short Acer. Dell's value gap has dissipated.
Latest indications from Dell and HP highlight that the AI PC's will drive upgrades from customers, but the PC recovery remains soft. AI PC impact only in 2025E.
Dell and HPQ's recent results provide positive color for upcoming Asus, Acer, and MSI results. Trade: Long Asus into its upcoming earnings results.


PC Monitor: Long Dell Vs. Short Acer Update; Dell & HPQ Results Indicate Opportunity in Asus

<ul>
<li>MSFT's new AI features for Windows will need computers with at least 16GB of DRAM to run effectively. MSFT is asking manufacturers for this as a minimum for AI models.</li>
<li>MSFT announced Copilot Pro for individuals and small businesses last week. The desire to use generative AI and the minimum required DRAM will drive accelerated PC upgrades.</li>
<li>We note relative strength in 16GB DRAM prices; In Memory space, we continue to see relative value in SK Hynix, however, Nanya has the opportunity to Outperform in Taiwan.</li>
</ul>


MSFT's new AI features for Windows will need computers with at least 16GB of DRAM to run effectively. MSFT is asking manufacturers for this as a minimum for AI models.
MSFT announced Copilot Pro for individuals and small businesses last week. The desire to use generative AI and the minimum required DRAM will drive accelerated PC upgrades.
We note relative strength in 16GB DRAM prices; In Memory space, we continue to see relative value in SK Hynix, however, Nanya has the opportunity to Outperform in Taiwan.


Memory Monitor: Microsoft Copilot Will Supercharge Demand for DRAM; SK Hynix, Nanya Tech, Micron

<ul>
<li>Asustek reported results on November 13th that beat analyst expectations thanks to a major margin rebound. The stock soared post results.</li>
<li>Asus plans to be the first company globally to release an AI PC, leveraging extensive AI R&amp;D across different devices as well as its leading market share in gaming PCs.</li>
<li>However, gaming PC competitor MSI is already moving fast; Shows how gaming PCs are likely to be the first AI PC battleground. Long Asustek, remains preferred over Acer.</li>
</ul>


Asustek reported results on November 13th that beat analyst expectations thanks to a major margin rebound. The stock soared post results.
Asus plans to be the first company globally to release an AI PC, leveraging extensive AI R&amp;D across different devices as well as its leading market share in gaming PCs.
However, gaming PC competitor MSI is already moving fast; Shows how gaming PCs are likely to be the first AI PC battleground. Long Asustek, remains preferred over Acer.


How Asustek Plans to Take the Lead Globally in AI PCs; Gaming PCs First Key Battleground

<ul>
<li>Dell and HP's latest results indicate an improving PC industry environment in 2H23E, though weaker than expected China demand has softened initial expectations.</li>
<li>A key take-away is that a major AI PC upgrade cycle is indeed on the horizon, with additional clarity now provided as to when and how it will unfold.</li>
<li>A 'step-change' AI PC upgrade cycle will make the strength of the current near-term cycle recovery less relevant, and isn't yet priced-in by the market.</li>
</ul>


Dell and HP's latest results indicate an improving PC industry environment in 2H23E, though weaker than expected China demand has softened initial expectations.
A key take-away is that a major AI PC upgrade cycle is indeed on the horizon, with additional clarity now provided as to when and how it will unfold.
A 'step-change' AI PC upgrade cycle will make the strength of the current near-term cycle recovery less relevant, and isn't yet priced-in by the market.


Recent Dell & HP Results Provide Additional Clarity on Coming AI PC Wave

<ul>
<li>Intel's latest results imply a potential bottoming of its business &amp; nascent turn-around; however the greater take-away is that the PC industry is heading into a major AI-driven up-cycle.</li>
<li>PC industry inventories are now "healthy" and Intel's Client Computing segment (PCs) showed the strongest QoQ revenue growth. Management is guiding for continued improvement next quarter.</li>
<li>Edge AI will drive a major upgrade cycle for PCs worldwide and Intel's new Meteor Lake chip could be a catalyst. Invest ahead of AI PCs having their "ChatGPT Moment".</li>
</ul>


Intel's latest results imply a potential bottoming of its business &amp; nascent turn-around; however the greater take-away is that the PC industry is heading into a major AI-driven up-cycle.
PC industry inventories are now "healthy" and Intel's Client Computing segment (PCs) showed the strongest QoQ revenue growth. Management is guiding for continued improvement next quarter.
Edge AI will drive a major upgrade cycle for PCs worldwide and Intel's new Meteor Lake chip could be a catalyst. Invest ahead of AI PCs having their "ChatGPT Moment".


Intel Results #1 Take-Away: Major Readthrough for PC Upgrade Cycle and Edge AI

China

Inspur Electronic Information Industry Co., Ltd. manufactures and markets computer servers, computer terminal products, electronic products, and telecommunication equipment.  The Company also develops computer software, provides system integration services, and operates in import and export trading.

Inspur Electronic Infmtn Indtry (000977 CH)

Focus Media Information Technology Co., Ltd. engages in media network for advertisements including within cinemas, posters and advertising displays in commercial offices or buildings.

Focus Media Information Technology Co, Ltd. (002027 CH)

Focus Media Information Technology Co, Ltd.

Dawning Information Industry Co., Ltd researches, develops, and produces information products. The Company manufactures and markets high-end computers, storage products, and provides software development, system integration and technical services. Dawning Information Industry conducts businesses in China.

Dawning Information Industry C (603019 CH)

BOE Technology Group Co., Ltd. manufactures display products. The Company produces display panels, sensor devices, and other products. BOE Technology Group supplies its products in mobile phones, tablets, notebooks, monitors, and other fields.

Ninestar Corporation provides printing and imaging products, output solutions, and managed print services. The Company researches, develops, and produces printer consumables chips, printers, and other products. Ninestar markets its products across worldwide.

China Greatwall Technology Group Co Ltd manufactures and develops computers and peripheral equipment.  The Company's products include computers, servers, monitors, printers, power packs, and other related products.  Greatwall Computer also develops computer software, provides networking system integration, and consults on e-commerce solution.

China Greatwall Technology Group Co Ltd (000066 CH)

Tsinghua Tongfang Co., Ltd. manufactures personal computers, designs application software, offers education programs, and provides a variety of computer network and system integration services.  The Company also produces energy and environmental engineering equipment and develops and sells real estate properties.

Shenzhen Kaifa Technology Co., Ltd.  manufactures and markets computer hardware, peripheral equipment, communication equipment, and other electronic instruments and components.The Company's main products include magnetic heads and hard disks.

GRG Banking Equipment Co.,Ltd. develops, manufactures and markets automated teller machines (ATMs) and other banking machines. The company also develops and sells banking machine related software.

Legend Holdings Corporation, through its subsidiaries, operates in information technology, real estate, financial services, agriculture and food, modern service, and chemical and energy materials sectors in China and internationally.

Western Digital Corporation is a global provider of solutions for the collection, storage, management, protection and use of digital content, including audio and video. The Company's products include hard drives, solid-state drives, and home entertainment and networking products.

Wistron Corporation manufactures and markets notebook computers, personal computers, and other related information products.

Advantech Co., Ltd. manufactures and markets embedded personal computers (PC), network computing products, industrial automation products, and panel PCs.

Seagate Technology Holdings Public Limited Company offers computer hardware products. The Company designs, manufactures, and markets hard disk drives for enterprise applications, client compute applications, client non-compute applications, personal data backup systems, portable external storage systems and digital media systems.

Pegatron Corp is a design, manufacturing and service company. The Company produces motherboards, desktop PCs, notebooks, broadband, wireless systems, game consoles, networking, multimedia, LCD TV, and more.

Asustek Computer Inc. manufactures and markets computer motherboards, interface cards, notebook computers, and other related products.

Lite-On Technology Corp. manufactures and markets a wide range of computer components and Peripheral equipment. The Company's products include computers, digital home products, consumer electronics, communications products, key components and sub-systems, and optoelectronic components. Power Supplies, Enclosures, and LEDs business are the core of Lite-On Technology's business.

NEC Corporation manufactures and markets computers, telecommunication equipment, electronic devices, semiconductors, and software.  The Company's products include printers, modems, cellular phones, plasma display panels (PDP), network systems, memory, integrated circuits (IC), thin film transistor-liquid crystal display (TFT-LCD), and printed circuit boards (PCB). NEC operates worldwide.

Asia Vital Components Co., Ltd.is a manufacturer of fan coolers for CPUs, laptops, and personal computers. The company also provides thermal products and peripherals, including heat sink, and thermal modules. Asia Vital Components sells its products worldwide.

Pure Storage, Inc. provides enterprise storage solutions. The Company offers flash enterprise arrays for high performance workloads, including server consolidation, virtualization desktop, database, and cloud computing. Pure Storage serves customers throughout the United States.

Lenovo Group Limited, through its subsidiaries, sells, and manufactures personal computers and handheld devices. The Company also provides Internet services and IT services, and contracting manufacturing business.

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Lenovo (992 HK)

PC Monitor: Long Dell Vs. Short Acer Update; Dell & HPQ Results Indicate Opportunity in Asus

Dell has outperformed Acer and other Taiwan PC names. Positive results from Dell and HPQ remove risk of disappointment in upcoming results for...

Vincent Fernando, CFA

Memory Monitor: Microsoft Copilot Will Supercharge Demand for DRAM; SK Hynix, Nanya Tech, Micron

Microsoft's new AI features for Windows require a minimum of 16GB of DRAM, prompting accelerated PC upgrades and a pulling forward of the demand...

Vincent Fernando, CFA

How Asustek Plans to Take the Lead Globally in AI PCs; Gaming PCs First Key Battleground

However, gaming PC competitor MSI is already moving fast; Shows how gaming PCs are likely to be the first AI PC battleground. Long Asustek, remains...

Vincent Fernando, CFA

Recent Dell & HP Results Provide Additional Clarity on Coming AI PC Wave

A 'step-change' AI PC upgrade cycle will make the strength of the current near-term cycle recovery less relevant, and isn't yet priced-in by the...

Vincent Fernando, CFA

Intel Results #1 Take-Away: Major Readthrough for PC Upgrade Cycle and Edge AI

Edge AI will drive a major upgrade cycle for PCs worldwide -- We recommend getting ahead of PC's having their "ChatGPT Moment".

Vincent Fernando, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

PC Monitor: Long Dell Vs. Short Acer Update; Dell & HPQ Results Indicate Opportunity in Asus

​Dell has outperformed Acer and other Taiwan PC names. Positive results from Dell and HPQ remove risk of disappointment in upcoming results for...

Vincent Fernando, CFA

Memory Monitor: Microsoft Copilot Will Supercharge Demand for DRAM; SK Hynix, Nanya Tech, Micron

​Microsoft's new AI features for Windows require a minimum of 16GB of DRAM, prompting accelerated PC upgrades and a pulling forward of the demand...

Vincent Fernando, CFA

How Asustek Plans to Take the Lead Globally in AI PCs; Gaming PCs First Key Battleground

However, gaming PC competitor MSI is already moving fast; Shows how gaming PCs are likely to be the first AI PC battleground. Long Asustek, remains...

Vincent Fernando, CFA

Recent Dell & HP Results Provide Additional Clarity on Coming AI PC Wave

A 'step-change' AI PC upgrade cycle will make the strength of the current near-term cycle recovery less relevant, and isn't yet priced-in by the...

Vincent Fernando, CFA

Intel Results #1 Take-Away: Major Readthrough for PC Upgrade Cycle and Edge AI

Edge AI will drive a major upgrade cycle for PCs worldwide -- We recommend getting ahead of PC's having their "ChatGPT Moment".

Vincent Fernando, CFA

Dell has outperformed Acer and other Taiwan PC names. Positive results from Dell and HPQ remove risk of disappointment in upcoming results for...

Microsoft's new AI features for Windows require a minimum of 16GB of DRAM, prompting accelerated PC upgrades and a pulling forward of the demand...