Daily Briefs

• Nvidia surpasses $3 trillion valuation, a first in semiconductor industry
• Company’s rapid growth raises concerns about stock market dynamics
• Debate on Nvidia’s dominance in AI computing and comparisons to past tech industry booms.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• The new excitement of the MS&AD story is the company’s commitment to sell down all of its cross-shareholdings and to use proceeds to fund growth and dividends.
• ROE is already far higher now than in recent years, and this can continue with rising dividends.
• Monthly insurance sales figures give a good window on the core business, with growth rates in May YoY and YTD accelerating.

• Oriental Watch (398 HK) reported revenue/profits down 2%/15% YoY for the full year (vs our expectation of 10%). H2 revenue/profitability fell 12%/22% YoY due to a weak Q4. 
• Cash and investments fell from 1.1 bn to 920 mn HKD, owing to dividend payments, increased inventories, and reduced payables.  Cash represents 55% of market capitalization. 
• The company maintains a 100% dividend payout, but dividends declined in line with earnings to 51.5 cents (FY23: 60 cents), representing a 15% dividend yield. 

• Delta Taiwan has outperformed Delta Taiwan recently. The parent vs. subsidiary market cap ratio is now trading consistently over 1.0x. and can go higher in our view.
• Nvidia opportunities and other similar cutting edge technologies will first go to Delta Electronics Taiwan (2308 TT) and not to Delta Electronics Thailand (DELTA TB).
• Conclusion — Expect further Delta Taiwan outperformance over the long-term vs. Delta Thailand.

• Data Centers — Traditional Data Center Recovery Starting; In Addition to HBM Demand, SSD Memory Seeing Strength for AI Applications
• PCs — Upcycle to Accelerate “Late CY2024E”, Driven by Windows 12 and End of Windows 10
• Mobile Devices — Moderate Growth in CY2024E; Potential for Smartphone Upgrade Cycle Acceleration

• Japan’s rising defense budget and military collaboration with the US and Europe should support a high level of orders for the foreseeable future.
• Defense is the growth driver, but other divisions should hold up well due to the ongoing rationalization of operations.
• Profits should rebound this year and rise further in FY Mar-26, bringing the P/E down to 9X or less. The weak yen is a large positive. 

• Tesla Tops Storage: Tesla dominates North American battery storage (25% market share) as renewables rise, deploying a record 4,053 MWh in Q1 2024.
• Explosive Industry Growth: U.S. battery storage market projected for a staggering 30.5% CAGR until 2030, driven by clean energy transition.
• Forefront of Innovation: CATL revealed TENER, a mass-producible energy storage system with zero degradation for five years achieving 430Wh/L density. Innovation to continue fueling growth.

• The company’s targets are underwhelming given the opportunity but low expectations built in
• A revamped strategy to increase profitability and shareholder returns is “radical” for this old-school company
• Execution is key for certain parts of the plan, but the market can do the rest

• Humanoid robot development is rapidly advancing with improvements in AI, mobility, and interaction capabilities, exciting progress being made.
• China’s cloud service spending expected to surge 20% by 2024, with the country leading the hydrogen race through policies and demand.
• Former TSMC R&D director sheds light on Taiwan chip industry facing geopolitical shifts, reaching a crucial crossroads amidst declining semiconductor market.

• ASX is seeing the number of listed companies in decline, although there are some positives with average daily turnover and secondary listings.
• Higher costs are keeping positives from reaching the bottom line fully, with costs to revenue are now 40% in 1H24 where this was 29% in recent interim periods.
• Capex plans for ASX and sticky inflationary figures on staff costs, the current year and following year net profit can see reasonable pressure.