Daily Briefs

• NVIDIA Corp (NVDA US) and Apple (AAPL US) switched positions in June setting off huge flows. Those flows could reverse in September if the current index methodology is used.
• To avoid frequent reverse turnover, S&P DJI have started a market consultation to change the index weighting methodology. We believe feedback will be positive and the proposals will be approved.
• Apple (AAPL US) will have inflows in September while there will be outflows from Microsoft Corp (MSFT US) and NVIDIA Corp (NVDA US). 

• Palantir Technologies Inc. provides software solutions for government customers in national security and intelligence
• Facing competition in AI products in the commercial sector, which may affect stock performance
• Company founded in 2003, known for utilizing technology to extract insights from data for government operations, with significant impact on Western society.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• The 2Q24 revenue was NT$15.3bn, 1.6% QoQ and -14.4% YoY. GM in 2Q24 was 32.3%, -5.8% QQ and -14.3% YoY. OPM in 2Q24 was 22.0%, -16.3% QoQ and -24.1% YoY.
• The widespread adoption of AI-driven electronic devices, along with the onset of the AI-powered device replacement cycle, is likely driving increased demand for peripheral ICs and sensors. 
• With inventory levels gradually depleting and downstream customers ramping up production capacity in 2025, the semiconductor industry is expected to recover in 2H24 and maintain an optimistic outlook for 2025.

• WeRide Corp (WER CH) is looking to raise around US$300m in its upcoming US IPO.
• WeRide provides autonomous driving products and services from L2 to L4 of driving automation.
• We had looked at the firm’s past performance in an earlier note. In this note, we will undertake a peer comparison.

• Horizon Robotics, a leading provider of ADAS and AD solutions for passenger vehicles, plans to raise up to $500M in Hong Kong IPO.
• I expect Horizon Robotics will price its IPO below last round valuation of ~$8.7B as revenue growth will slow below 50% y/y in 2024, down from 71% y/y in 2023.
• The company’s key competitors, including Mobileye and Microchip Technology, revised their revenue guidance downwards for the second half of 2024.

• Amid recent market turmoil, we believe that SK Telecom could be a solid blue-chip, defensive Korean stock that could outperform the market in the next 6-12 months.
• SK Telecom reported better than expected profits in 2Q 2024. The company’s sales were 0.5% higher than the consensus and its operating profit was 3.9% higher than the consensus estimates.
• SK Telecom’s shareholder return policy is to return at least 50% of adjusted profit for the year on a consolidated basis.

• Wacom is a technology company specializing in the development of graphic tablets (pen tablet products), pen displays (display products), and related digital interface solutions.
• Leveraging its high reputation for its branded products, it is expanding in the OEM solutions market.
• Due to changes in market structure driven by demand shifting towards general-purpose tablets and lengthening replacement cycles, Wacom is focused on improving its sales mix and earnings quality by developing a service-centric growth engine. 

• The 3Q24 revenue is expected 10.5% higher than 2Q24, but the GM/OPG outlook will be 5.1%/3.6% lower because of pricing adjustments and limited NRE sales .  
• Smartphone’s demand will enter peak season with expected stockpiling for new models. Automotive inventory adjustment is needed due to muted demand.  
• Dividend payout ratio has remained at 80-85% in recent years, with no major changes expected.

• Microsoft, a technology giant with a market-leading position across various sectors, finds itself at a crossroads.
• The company has demonstrated remarkable growth, with annual revenue surpassing $245 billion, driven largely by its cloud services and AI-driven innovations.
• However, recent events have cast a shadow over its future prospects.

• Sales decreased to JPY4.1bn (-9.3% YoY), operating profit to JPY528mn (-32.0% YoY), and recurring profit to JPY521mn (-34.3% YoY).
• Q1 FY03/25 results achieved 62.5% of 1H sales forecast, 88.0% of operating profit, and 86.8% of recurring profit.
• Sales of products for pachinko and pachislot machines decreased YoY, with graphics LSI sales dropping by 20,000 units.