Asia and Global Semiconductor and Tech Research

Andrew Lu

Thematic (Sector/Industry)

<ul>
<li>During MOI correction period, global semi equipment and manufacturing vendors might under-perform semi product companies on sales/earnings and share price performance in next 6 months given utilization remains below 80%.</li>
<li>A healthy MOI correction in PC/smartphone semi might result in global logic MOI to fall to 3.7-3.8 months in 3Q23, down 15% q/q and 8% y/y, heading to historical low. </li>
<li>China fabless reduced MOI to 6.4 months in 3Q23, down 16% q/q and 26% y/y. Although 2x over 3.5 months low, we expect 4-5 months in future due to restrictions.</li>
</ul>


During MOI correction period, global semi equipment and manufacturing vendors might under-perform semi product companies on sales/earnings and share price performance in next 6 months given utilization remains below 80%.
A healthy MOI correction in PC/smartphone semi might result in global logic MOI to fall to 3.7-3.8 months in 3Q23, down 15% q/q and 8% y/y, heading to historical low. 
China fabless reduced MOI to 6.4 months in 3Q23, down 16% q/q and 26% y/y. Although 2x over 3.5 months low, we expect 4-5 months in future due to restrictions.


More Signs of Fab Utilization Recovery Starting Mid-2024 Post Current MOI Correction

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

Cross Asset Strategy

<ul><li>Health insurance / In Depth: China’s struggle to unify localized health insurance</li><li>Diplomat / Chinese embassy in France plays down Ambassador Lu’s remarks on ex-Soviet states</li><li>Sudan / Chinese nationals evacuated from conflict-hit Sudan</li></ul>

Health insurance / In Depth: China’s struggle to unify localized health insuranceDiplomat / Chinese embassy in France plays down Ambassador Lu’s remarks on ex-Soviet statesSudan / Chinese nationals evacuated from conflict-hit Sudan

CX Daily: China’s Struggle to Unify Localized Health Insurance

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>There are 28 changes for the <a href="https://www.smartkarma.com/entities/shanghai-shenzhen-csi-300-index" target="_blank" data-smartkarma-citation="entities:22906:1" rel="noopener">Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX)</a> at the upcoming rebalance that will be implemented at the close of trading on 9 June.</li>
<li>We had forecast nearly all the changes, though the index committee seems to have used discretion in deciding not to add three Distillers to the index, leading to other changes.</li>
<li>There's a large sector skew with Industrials, Information Technology and Materials stocks taking 17 more spots in the index, while Health Care and Financials lose 9 and 5 spots respectively.</li>
</ul>


There are 28 changes for the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) at the upcoming rebalance that will be implemented at the close of trading on 9 June.
We had forecast nearly all the changes, though the index committee seems to have used discretion in deciding not to add three Distillers to the index, leading to other changes.
There's a large sector skew with Industrials, Information Technology and Materials stocks taking 17 more spots in the index, while Health Care and Financials lose 9 and 5 spots respectively.


CSI300 Index Rebalance: Big Sector Shift with 28 Changes

<ul>
<li>We expect the maximum permitted 30 changes at a single review to take place at the June rebalance. Most changes are high probability.</li>
<li>We estimate a one-way turnover of 4.25% at the rebalance leading to a one-way trade of CNY 10.677bn.</li>
<li>Industrials, Information Technology and Materials sectors are expected to have the most net inclusions, while Health Care and Financials are expected to have the most net deletions.</li>
</ul>


We expect the maximum permitted 30 changes at a single review to take place at the June rebalance. Most changes are high probability.
We estimate a one-way turnover of 4.25% at the rebalance leading to a one-way trade of CNY 10.677bn.
Industrials, Information Technology and Materials sectors are expected to have the most net inclusions, while Health Care and Financials are expected to have the most net deletions.


CSI300 Index Rebalance Preview: 30 Potential Changes as Sector Rotation Continues

<ul>
<li>With a few weeks to the end of the review period, we see 30 potential changes (the maximum allowed at a review) to the index in June.</li>
<li>Most of the changes are high probability ones. We estimate a one-way turnover of 4.48% at the June rebalance leading to a one-way trade of CNY 7.86bn.</li>
<li>The potential inclusions have outperformed the potential deletions over the last couple of months. There could be more to go here as positions are built in the next few weeks.</li>
</ul>


With a few weeks to the end of the review period, we see 30 potential changes (the maximum allowed at a review) to the index in June.
Most of the changes are high probability ones. We estimate a one-way turnover of 4.48% at the June rebalance leading to a one-way trade of CNY 7.86bn.
The potential inclusions have outperformed the potential deletions over the last couple of months. There could be more to go here as positions are built in the next few weeks.


CSI300 Index Rebalance Preview (June): Maxing Out the 30 Changes

China

Sinolink Securities Co., Ltd. brokers securities trading, trades securities, underwrites securities, provides securities custody services and financial advising services.

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Sinolink Securities Co, Ltd. (600109 CH)

More Signs of Fab Utilization Recovery Starting Mid-2024 Post Current MOI Correction

More Signs of Fab Utilization Recovery Starting Mid-2024 Post Current MOI Correction. During the period, global semi equipment and manufacturing...

Andrew Lu

CX Daily: China’s Struggle to Unify Localized Health Insurance

In Depth: China’s struggle to unify localized health insurance. Chinese embassy in France plays down Ambassador Lu’s remarks on ex-Soviet states.

Caixin Global

CSI300 Index Rebalance: Big Sector Shift with 28 Changes

The June rebalance of the CSI300 Index will have 28 changes, a large sector skew, one-way turnover of 4.11% and a one-way trade of CNY 10bn. The...

Brian Freitas

CSI300 Index Rebalance Preview: 30 Potential Changes as Sector Rotation Continues

We forecast 30 changes at the June rebalance for the CSI300 Index - most high probability. Industrials, IT and Materials sectors will have net...

Brian Freitas

CSI300 Index Rebalance Preview (June): Maxing Out the 30 Changes

We estimate 30 changes at the June rebalance with a one-way turnover of 4.48% leading to a one-way trade of CNY 7.86bn. The potential adds have...

Brian Freitas

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