Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

United Microelectron Sp Adr / Equity Bottom-Up

<ul>
<li>It is continuing to raise wafer price, and revenue/GM to reach ~NT$58billion/~39% and NT$60billion/~41.5% in 4Q21/1Q22 respectively. </li>
<li>It will plan to add 5-8k 28nm production capacity in 12A Tainan during 2H22, and we consider it is to secure customers’ demands.</li>
<li>We do not see any sign to deteriorate for the 2nd half at this moment. </li>
</ul>


It is continuing to raise wafer price, and revenue/GM to reach ~NT$58billion/~39% and NT$60billion/~41.5% in 4Q21/1Q22 respectively. 
It will plan to add 5-8k 28nm production capacity in 12A Tainan during 2H22, and we consider it is to secure customers’ demands.
We do not see any sign to deteriorate for the 2nd half at this moment. 


UMC (UMC.US, 2303.TT): 1Q22 Earnings Preview- Continuous Growth

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Cross Asset Strategy

<ul>
<li>A key medium-term driver of share price is earnings estimate trajectory - in particular, "earnings inflections" - i.e. the trajectory of earnings estimates changing directions. </li>
<li>Different Asian markets have had different estimate trajectories. But most suffered estimate cuts since August/September 2024, coinciding with the US Dollar appreciation and the spike in US yields.</li>
<li>We argue that investors need to watch out for Taiwan, Indonesia, Malaysia and India for earnings estimate increases. India's could decline in the near term and commence an uptrend later. </li>
</ul>


A key medium-term driver of share price is earnings estimate trajectory - in particular, "earnings inflections" - i.e. the trajectory of earnings estimates changing directions. 
Different Asian markets have had different estimate trajectories. But most suffered estimate cuts since August/September 2024, coinciding with the US Dollar appreciation and the spike in US yields.
We argue that investors need to watch out for Taiwan, Indonesia, Malaysia and India for earnings estimate increases. India's could decline in the near term and commence an uptrend later. 


Asian Equities: In Search of Earnings Estimate Uptrends

Global Macro Strategist, Westbourne Research Services

Sharmila Whelan

Global Macro Strategist

Macroeconomic, Geopolitical and Policy Forecasting

Westbourne Research Services

Westbourne Research is a global macroeconomic, geopolitical and policy forecasting and strategic advisory consultancy. Located in London, UK and serving clients globally. Our knowledge is deep, spanning all asset classes and key industrial sectors. Our perspective is global. Our presence is expansive, with 30 years analysing and working in developed and emerging markets. We are uniquely India and China specialists.

<ul>
<li>We went long Taiwan equities end-2023 in expectation of regional outperformance. The TAIEX is up 31% CYTD. It has further to run. Ignore geopolitics, stay overweight equities and the NT$.</li>
<li>The economic and corporate earnings outlooks are positive. The Taiwanese business cycle is in a broad-based upswing.  Corporate fundamentals are healthy. The investment and credit cycles are strengthening. </li>
<li>Meanwhile China dependence is declining.  Exporters are diversifying away, and manufacturers are sensibly hedging against geopolitical risks and the Chinese economy by investing beyond.</li>
</ul>


We went long Taiwan equities end-2023 in expectation of regional outperformance. The TAIEX is up 31% CYTD. It has further to run. Ignore geopolitics, stay overweight equities and the NT$.
The economic and corporate earnings outlooks are positive. The Taiwanese business cycle is in a broad-based upswing.  Corporate fundamentals are healthy. The investment and credit cycles are strengthening. 
Meanwhile China dependence is declining.  Exporters are diversifying away, and manufacturers are sensibly hedging against geopolitical risks and the Chinese economy by investing beyond.


Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

<ul>
<li>China, India, Saudi Arabia, and Taiwan remain key underweights.  Recovery in Malaysia, Thailand, Turkey, and South Africa, correction in Indonesia and Mexico. Developed Markets the largest overweight for EM investors.</li>
<li>Discretionary, Staples, and Industrials the key overweights, Materials and Energy the underweights. Rotation out of Tech moves positioning from overweight to underweight for the first time since 2019.</li>
<li>Ownership climbs for Meituan and SK Hynix, Baidu and Yum China see sharp declines. Downtrends persist in Vale, Telkom Indonesia.  Recovery in SK Telekom, Garanti Bank, highs in Emaar Properties. </li>
</ul>


China, India, Saudi Arabia, and Taiwan remain key underweights.  Recovery in Malaysia, Thailand, Turkey, and South Africa, correction in Indonesia and Mexico. Developed Markets the largest overweight for EM investors.
Discretionary, Staples, and Industrials the key overweights, Materials and Energy the underweights. Rotation out of Tech moves positioning from overweight to underweight for the first time since 2019.
Ownership climbs for Meituan and SK Hynix, Baidu and Yum China see sharp declines. Downtrends persist in Vale, Telkom Indonesia.  Recovery in SK Telekom, Garanti Bank, highs in Emaar Properties. 


Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the changes in foreign holdings of TWSE Stocks as of Nov 15th which has an aggregated holding worth USD999.2bn.</li>
<li>We estimate that foreign flows to be outflows of USD2,830mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.</li>
<li>We highlight changes of foreign holdings in Eva Airways, Mitac, TSMC, Quanta Computer, Hon Hai Precision Industry, Chailease, UMC.</li>
</ul>


We analyzed the changes in foreign holdings of TWSE Stocks as of Nov 15th which has an aggregated holding worth USD999.2bn.
We estimate that foreign flows to be outflows of USD2,830mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
We highlight changes of foreign holdings in Eva Airways, Mitac, TSMC, Quanta Computer, Hon Hai Precision Industry, Chailease, UMC.


TWSE Foreign Holding Weekly (Nov 15th): Eva Airways, Mitac, TSMC, Quanta Computer

Taiwan

Taiwan Semiconductor Manufacturing Company Ltd. manufactures integrated circuits based on its proprietary designs.  The Company offers a comprehensive set of integrated circuit fabrication processes to manufacture CMOS logic, mixed-mode, volatile and non-volatile memory and BiCMOS chips.  Taiwan Semiconductor is an affiliate of Philips Electronics N.V.

Taiwan Semiconductor (TSMC) - ADR (TSM US)

Price Gauge
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Taiwan Semiconductor (TSMC) - ADR (TSM US)

UMC (UMC.US, 2303.TT): 1Q22 Earnings Preview- Continuous Growth

UMC’s sales/GM would reach to ~NT$58billion/~39% and NT$60billion/~41.5% in 4Q21/1Q22 respectively, a bit higher than Bloomberg consensus of...

Patrick Liao

Asian Equities: In Search of Earnings Estimate Uptrends

Earnings estimate trajectory, especially "earnings inflection," are key drivers of share price in Asian markets. We see potential uptrends in...

Manishi Raychaudhuri

The Taiwan Question

Expect Taiwan equities to continue outperforming due to positive economic and corporate outlooks, despite declining China dependence and...

Sharmila Whelan

Active GEM Funds: Positioning Chart Pack

In this chart pack, we highlight the key country, sector and stock exposures among active Emerging Markets equity funds.

Steven Holden

TWSE Foreign Holding Weekly (Nov 15th): Eva Airways, Mitac, TSMC, Quanta Computer

We analyzed TWSE foreign holding data for the past week and highlighted foreign holding changes in Eva Airways, Mitac, TSMC, Quanta Computer, Hon...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

UMC (UMC.US, 2303.TT): 1Q22 Earnings Preview- Continuous Growth

UMC’s sales/GM would reach to ~NT$58billion/~39% and NT$60billion/~41.5% in 4Q21/1Q22 respectively, a bit higher than Bloomberg consensus of...

Patrick Liao

Asian Equities: In Search of Earnings Estimate Uptrends

​Earnings estimate trajectory, especially "earnings inflection," are key drivers of share price in Asian markets. We see potential uptrends in...

Manishi Raychaudhuri

The Taiwan Question

​Expect Taiwan equities to continue outperforming due to positive economic and corporate outlooks, despite declining China dependence and...

Sharmila Whelan

Active GEM Funds: Positioning Chart Pack

In this chart pack, we highlight the key country, sector and stock exposures among active Emerging Markets equity funds.

Steven Holden

TWSE Foreign Holding Weekly (Nov 15th): Eva Airways, Mitac, TSMC, Quanta Computer

We analyzed TWSE foreign holding data for the past week and highlighted foreign holding changes in Eva Airways, Mitac, TSMC, Quanta Computer, Hon...

Ke Yan, CFA, FRM

Earnings estimate trajectory, especially "earnings inflection," are key drivers of share price in Asian markets. We see potential uptrends in...

Expect Taiwan equities to continue outperforming due to positive economic and corporate outlooks, despite declining China dependence and...