Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Korean Financial Services Commission and the Financial Supervisory Service held a press briefing, unveiling the comprehensive prohibition of short selling from the 6th November, until June 30th next year.</li>
<li>Recco or Ascendant for <a href="https://www.smartkarma.com/entities/hollysys-automation-technologies" target="_blank" data-smartkarma-citation="entities:26078:1" rel="noopener">Hollysys (HOLI US)</a>? Ascendant could easily get &gt;50% of shares out, and spill the board. Recco, with no shares held, looks to have a weaker hand. </li>
<li>
<a href="https://www.smartkarma.com/entities/sankyo-co-ltd" target="_blank" data-smartkarma-citation="entities:12385:1" rel="noopener">Sankyo (6417 JP)</a> is cheap. It will never trade at 20x expected PER because of the nature of the business; right now, on an ex-cash basis, it trades 1.6x ex-cash PER.</li>
</ul>


The Korean Financial Services Commission and the Financial Supervisory Service held a press briefing, unveiling the comprehensive prohibition of short selling from the 6th November, until June 30th next year.
Recco or Ascendant for Hollysys (HOLI US)? Ascendant could easily get &gt;50% of shares out, and spill the board. Recco, with no shares held, looks to have a weaker hand. 

Sankyo (6417 JP) is cheap. It will never trade at 20x expected PER because of the nature of the business; right now, on an ex-cash basis, it trades 1.6x ex-cash PER.


Last Week in Event SPACE: Korea's Short Selling, Hollysys, Sankyo, Descente

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>Both SMIC and Hua Hong Semi posted in-line 3Q23 results but GPM pressure continued on lower UTR and ASP.</li><li>Looking ahead, both companies expected stabilizing demand on smartphone/CE recovery, and highlighted concerns on high inventory in automotive market.</li><li>On mature nodes, both expected stable demand into 2024 but lack growth momentum, and SMIC guided 8-inch UTR to remain at 50-70% in 2024. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Both SMIC and Hua Hong Semi posted in-line 3Q23 results but GPM pressure continued on lower UTR and ASP.Looking ahead, both companies expected stabilizing demand on smartphone/CE recovery, and highlighted concerns on high inventory in automotive market.On mature nodes, both expected stable demand into 2024 but lack growth momentum, and SMIC guided 8-inch UTR to remain at 50-70% in 2024. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Technology – SMIC/Hua Hong Semi 3Q23: in-line revenue; ASP/GPM pressure to persist into 4Q23E

Asia and Global Semiconductor and Tech Research

Andrew Lu

<ul>
<li>Takeaways post model updated: 1. most foundries miss 4Q23 but y/y decline to decelerate; 2. y/y sales passed the trough but utilization later; 3. wafer shipment down 18-20% in 2023;</li>
<li>More takeaways: 4. different mix with different price; 5. some are defensive this year, some might have larger upside for 2024; 6. gross margin still falling and capex cut needed.</li>
<li>
Automotive/Industrial lags only not beginning of the fall: Smartphone, pc, consumer/IOT foundry orders might recover earlier than automotive/industrial for 2-3 quarters, resulting fablesses in these area to outperform.</li>
</ul>


Takeaways post model updated: 1. most foundries miss 4Q23 but y/y decline to decelerate; 2. y/y sales passed the trough but utilization later; 3. wafer shipment down 18-20% in 2023;
More takeaways: 4. different mix with different price; 5. some are defensive this year, some might have larger upside for 2024; 6. gross margin still falling and capex cut needed.

Automotive/Industrial lags only not beginning of the fall: Smartphone, pc, consumer/IOT foundry orders might recover earlier than automotive/industrial for 2-3 quarters, resulting fablesses in these area to outperform.


Takeaways Post Our Global Foundry Model Updated and Initial View on 2024

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Equity Bottom-Up

<ul><li>Qualcomm Inc.’s handset chip business in China will not be affected by Huawei’s push for semiconductor self-sufficiency, said chief executive Cristiano Amon.</li><li>Despite Huawei’s return to the mobile arena spotlight with an in-house chip, the growth trajectory of Qualcomm’s business with Android handset-makers in China will remain unchanged, according to Amon on a post-earnings call on Wednesday.</li><li>Chief Financial Officer Akash Palkhiwala cited an estimated jump of more than 35% in chip sales to Chinese smartphone-makers in and outside China for the fourth quarter of fiscal 2023.</li></ul>

Qualcomm Inc.’s handset chip business in China will not be affected by Huawei’s push for semiconductor self-sufficiency, said chief executive Cristiano Amon.Despite Huawei’s return to the mobile arena spotlight with an in-house chip, the growth trajectory of Qualcomm’s business with Android handset-makers in China will remain unchanged, according to Amon on a post-earnings call on Wednesday.Chief Financial Officer Akash Palkhiwala cited an estimated jump of more than 35% in chip sales to Chinese smartphone-makers in and outside China for the fourth quarter of fiscal 2023.

Qualcomm Sees No Threat From Huawei-Developed Chips, CEO Says 

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

<ul>
<li>Q323 revenues of $1.85 billion, flat sequentially but down 11% YoY. Net income was $249 million, up 5% sequentially but down 26% YoY.</li>
<li>At a midpoint of $1.85 billion, forward guidance is once again flat sequentially. Overall it was a solid report with guidance slightly better than UMC delivered last week.</li>
<li>Despite the solid quarter, the company's outlook for 2024 was bleak with a 50% CapEx cut, LTAs under mounting pressure &amp; ominous-sounding LTA "True Up" on the horizon. </li>
</ul>


Q323 revenues of $1.85 billion, flat sequentially but down 11% YoY. Net income was $249 million, up 5% sequentially but down 26% YoY.
At a midpoint of $1.85 billion, forward guidance is once again flat sequentially. Overall it was a solid report with guidance slightly better than UMC delivered last week.
Despite the solid quarter, the company's outlook for 2024 was bleak with a 50% CapEx cut, LTAs under mounting pressure &amp; ominous-sounding LTA "True Up" on the horizon. 


GlobalFoundries Pops On Q323 Earnings. But Why?

China

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)

Semiconductor Manufacturing International Corp (SMIC)

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Semiconductor Manufacturing International Corp (SMIC) (981 HK)

Last Week in Event SPACE: Korea's Short Selling, Hollysys, Sankyo, Descente

The weekend is here! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed...

David Blennerhassett

China Technology – SMIC/Hua Hong Semi 3Q23: in-line revenue; ASP/GPM pressure to persist into 4Q23E

On mature nodes, both expected stable demand into 2024 but lack growth momentum, and SMIC guided 8-inch UTR to remain at 50-70% in 2024.

CMB International

Takeaways Post Our Global Foundry Model Updated and Initial View on 2024

Seven takeaways Post Our Global Foundry Model Updated and Initial View on 2024 foundry shipment, blended wafer price, sales, and capex growth/decline

Andrew Lu

Qualcomm Sees No Threat From Huawei-Developed Chips, CEO Says

Qualcomm Inc. ’s handset chip business in China will not be affected by Huawei’s push for semiconductor self-sufficiency, said chief executive...

Caixin Global

GlobalFoundries Pops On Q323 Earnings. But Why?

Despite the solid quarter, the company's outlook for 2024 was bleak with a 50% CapEx cut, LTAs under mounting pressure & an ominous-sounding LTA...

William Keating

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