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

Oil & Natural Gas Corp / Technical Analysis

<ul>
<li>MSCI EM (EEM-US) has continued to hold above our $37-$37.50 line-in-the-sand, meaning we are constructive from a price perspective.</li>
<li>We have maintained an underweight to emerging markets, and we are overweight developed international (MSCI EAFE, Europe, Japan) as discussed in in <em>Int’l Compass</em> and <em>ETF Pathfinder</em> reports throughout 2023.</li>
<li>Still, there are plenty of attractive countries and Sectors within the EM landscape, which is what we are focusing on today.</li>
</ul>


MSCI EM (EEM-US) has continued to hold above our $37-$37.50 line-in-the-sand, meaning we are constructive from a price perspective.
We have maintained an underweight to emerging markets, and we are overweight developed international (MSCI EAFE, Europe, Japan) as discussed in in Int’l Compass and ETF Pathfinder reports throughout 2023.
Still, there are plenty of attractive countries and Sectors within the EM landscape, which is what we are focusing on today.


EM Strategy: MSCI EM Financials & Energy Improving-Overweight; Overweights: Taiwan, India, Mexico

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

<ul>
<li>SK Hynix and Samsung reported results in the last week, showing major losses for their memory businesses. More evidence of a 'two-track recovery' for different parts of the chip industry.</li>
<li>SK Hynix's inventory situation worsened based on our analysis; Micron appears to be managing inventory moderately better than peers based on recent results.</li>
<li>Long Micron vs. Short Nanya Technology: Micron has continued to outperform Nanya Tech, as well as SK Hynix and Samsung.</li>
</ul>


SK Hynix and Samsung reported results in the last week, showing major losses for their memory businesses. More evidence of a 'two-track recovery' for different parts of the chip industry.
SK Hynix's inventory situation worsened based on our analysis; Micron appears to be managing inventory moderately better than peers based on recent results.
Long Micron vs. Short Nanya Technology: Micron has continued to outperform Nanya Tech, as well as SK Hynix and Samsung.


Memory Monitor: SK Hynix & Samsung Losses & Conservative Guidance Indicate Two-Track Chip Recovery

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Thematic (Sector/Industry)

<ul>
<li>Q1’23 operating profits of 0.64 trillion won, the lowest since Q1'09</li>
<li>Strong sales of flagship S23 smartphones helped avert an otherwise inevitable overall group operating loss.  </li>
<li>Outlook for the current quarter is for more of the same, albeit the bottom line will depend on the extent (if any) of memory inventory write-downs. </li>
</ul>


Q1’23 operating profits of 0.64 trillion won, the lowest since Q1'09
Strong sales of flagship S23 smartphones helped avert an otherwise inevitable overall group operating loss.  
Outlook for the current quarter is for more of the same, albeit the bottom line will depend on the extent (if any) of memory inventory write-downs. 


Samsung. When Your Cash Cow Turns Into Your Achilles Heel.

<ul>
<li>SK Hynix reported a Q1'23 net loss of ~ US$1.9 billion</li>
<li>As was the case with Micron, the company pegged Q1'23 as the trough for the current downturn and now expect quarterly revenues to grow sequentially</li>
<li>Recovery may be nigh, but the macro outlook has actually worsened. The road to recovery will be a long and winding one. </li>
</ul>


SK Hynix reported a Q1'23 net loss of ~ US$1.9 billion
As was the case with Micron, the company pegged Q1'23 as the trough for the current downturn and now expect quarterly revenues to grow sequentially
Recovery may be nigh, but the macro outlook has actually worsened. The road to recovery will be a long and winding one. 


SK Hynix Calls Time On The Memory Downturn

<ul>
<li>Nanya Technology's recent results showed a margin and ASP decline that appears to have performed better than the industry average. </li>
<li>However, Nanya Technology may have traded off better pricing and margins for a continuation of high inventory levels. Nanya shares have underperformed Micron since our Mar 30th piece.</li>
<li>Nanya said it expects a marginal recovery for the DRAM market in the second half of 2023E. SK Hynix will be a next major data point, to report April 26th.</li>
</ul>


Nanya Technology's recent results showed a margin and ASP decline that appears to have performed better than the industry average. 
However, Nanya Technology may have traded off better pricing and margins for a continuation of high inventory levels. Nanya shares have underperformed Micron since our Mar 30th piece.
Nanya said it expects a marginal recovery for the DRAM market in the second half of 2023E. SK Hynix will be a next major data point, to report April 26th.


Memory Monitor: Nanya Technology Hopeful of 2H23E DRAM Recovery

Taiwan

Nanya Technology Corp. manufactures and markets dynamic random access memories (DRAMs).  The Company sells its products in Taiwan and exports worldwide.

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Nanya Technology (2408 TT)

EM Strategy: MSCI EM Financials & Energy Improving-Overweight; Overweights: Taiwan, India, Mexico

MSCI EM Financials & Energy Improving -- Upgrading to Overweight; MSCI EM Technology remains an Overweight. Top Country Overweights: Taiwan, India,...

Vermilion Research

Memory Monitor: SK Hynix & Samsung Losses & Conservative Guidance Indicate Two-Track Chip Recovery

SK Hynix's inventory metrics worsened while Micron appears to be managing inventory better than peers. We see more evidence of a 'two-track...

Vincent Fernando, CFA

Samsung. When Your Cash Cow Turns Into Your Achilles Heel.

Q1’23 operating profits of 0.64 trillion won, the lowest since Q1'09. Strong S23 sales saved the day. Outlook is for more of the same, albeit the...

William Keating

SK Hynix Calls Time On The Memory Downturn

SK Hynix reported a Q1'23 net loss of ~ US$1.9 billion. Q1'23 pegged as the trough. Recovery may be nigh, but macro outlook has actually worsened....

William Keating

Memory Monitor: Nanya Technology Hopeful of 2H23E DRAM Recovery

Nanya Technology may have traded off better pricing and margins for a continuation of high inventory levels. Nanya shares have underperformed...

Vincent Fernando, CFA

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