Thematic (Sector/Industry)

• Wall Street showed mixed results on Thursday as the Dow Jones Industrial Average reached a new record high, closing at 41,335, up 0.59%
• ASICS will discontinue selling baseball equipment like gloves and bats by September 2025
• Toyota Motor Corporation reported a slight year-on-year increase in domestic production for July, reaching 309,118 units.

• Tech selloff overnight on NVDA post-earnings weakness was fairly contained, and SPE related in Japan should continue yesterdays rebound off the morning lows.
• Big beat for Dell on the strong outlook for its AI servers outweighing the soft consumer PC market sending it +8% in after-market trading.
• News that Tepco plans to spend $3.2bn to upgrade its electricity infrastructure to 2030 positive for wire/cable names and related names.

• Adani Ports to Invest INR 3,500 Crore in Madhya Pradesh Projects
• Wipro’s Strategic AI Partnerships in US Healthcare: Strong FY25 Forecast
• Dixon Technologies to Partner with China’s HKC for Display Module Manufacturing

• LI US:Li Auto’s second quarter revenue and profit exceeded expectations, and L6’s unit price and gross profit were better than expected. (/)
• 1810 HK/1211 HK/ LI US/XPEV US/NIO US:Week 34 of 2024: New energy vehicles grow healthily,BYD hit a new high, AITO rebounded, Xiaomi continued to fall back.(/////////)
• NIO US/XPEV US/ LI US: AITO M5 caught fire, positive for LI.(/////)

• PDD US:PDD valuation cheaper than slower growing e-commerce peers. (/)
• SHEIN: SHEIN launches semi- consignment model in the EU.  (/)
• BABA US: Taobao launches “Grass-Planting Plan” to drive off-site traffic to Taobao (+) 

• We highlight 14 stocks in Thailand that look interesting to us based on our FVMR Methodology
• Portfolio changes: Seven stocks remain, seven new join the fray
• Ince inception, it has gained 112% versus the SET 100 Index’s return of 24%

• Stocks retreated on Wednesday as investors awaited Nvidia’s crucial earnings report. The Nasdaq Composite led declines, falling 1.12%
• Nvidia reported strong Q4 earnings, beating expectations with $30.04 billion in revenue and $0.68 EPS.
• Super Micro Computer’s stock plunged 19% after announcing a delay in filing its annual report, following accusations of “accounting manipulation” by Hindenburg Research

• NVDA disappoints market expectations and trades -7% after-market, setting a very weak tone for Japanese SPE and tech related names to start.
• The bad news for 4911 Shiseido continues, with the tone out of a small sell-side meeting held yesterday after-market pointed to further earnings downside.
• Expect a continued rotation into value and domestic defensives as the market pivots away from AI/tech with plenty of room for profit taking after the recent rebound.

• US considerably lags behind China and Europe which had 3.2 million and 0.9 million public charging points at the end of July 2024. US had just 180,136.
• US aims to reach 500,000 public EV chargers by 2030. This compared with EU’s target of 3.5 million chargers by the same timeframe.
• EV adoption remains slow in the U.S. impacted by pricing and lack of infrastructure.

• Zee and Sony Amicably Settle Disputes Over Failed Merger, Withdraw Claims
• NSE Files for SEBI NOC to Gain Approval for Long-Awaited IPO Listing
• ReNew and Microsoft Forge 437.6 MW Green Energy Pact to Advance Carbon-Negative Goals

• News report today that RMB may appreciate 10% due to potential USD weakness and capital inflow of USD1trn back into China, causing upward pressure of the currency
• The capital inflow comes from potential unwinding of carry trade, as Chinese companies borrow CNY at low interest rate and place capital in USD deposit, at higher interest rate
• We think this scenario is unlikely unless China economy is showing strong recovery.  But, if this happens, it will hurt export but positive for HK-listed Chinese property stocks

• China’s tropical island province of Hainan is to hand out 24 million yuan ($3.4 million) in spending vouchers to encourage tourists to splash out and reverse falling retail sales in the duty-free haven.
• The provincial government said it will distribute the vouchers, including 9 million yuan to buy airline tickets and 15 million yuan for tax-free shopping, between late August and October.
• The initial batch of flight ticket vouchers will apply to Hainan Airlines’ services, but other carriers can request to join the program, the government said.

• US Stocks edged higher as the market awaits Nvidia earnings after the close on Wednesday
• Super Micro Computer fell 2.64% after Hindenburg Research released a report alleging accounting issues
• Sony is increasing the price of its PlayStation 5 console in Japan by about 20%

• Sony price hikes in Japan to have a mild positive impact. The stock still looks attractive after positives from recent earnings seem to have been lost in the recent volatility.
• PPIH continues to look attractive as a continued laggard as the market rotates out of the big retail/inbound winners such as Isetan Mitsukoshi.
• 7&I clearly showing how anti-takeover they are effectively asking for Govt protection to ward off Canada’s Alimentation Couche-Tard takeover approach.

• JD US/1810 HK/BABA US: Government insider says home appliance subsidies to be fully disbursed by end of August (+)
• JD US/2618 HK/PDD US/BABA US: JD adjusts its algorithm to improve traffic of low price and fast shipping products (+/+/-/-)
• BABA US: Alibaba launches demo of LLM support for mathematical reasoning based on sketches (+)

• 1347 HK/ACMR US: Hua Hong Wuxi Fab Phase II begins tool move-in (+/+)
• 1810 HK/BIDU US/0175 HK: “Xiaomi criticized for selling cars at a loss” goes viral (+/-/-)
• 2150 HK:Nayuki’s First Overseas Flagship Store Opens in Thailand (+)

• HK Property stocks are up 4-5% today.   We think the tide has turned for HK real estate.  As discussed, we identify HK to benefit if Fed starts a rate-cut cycle
• Powell’s speech at Jackson Hole meeting confirmed the change of monetary policy and will start a rate cut cycle.  Despite fundamental issues remain for HK, market is forward-looking
• A buy in HK RE names will be a good value trade for next 6-12 months and we discuss potential trade ideas

• The Dow Jones Industrial Average closed at a record high of 41,240 on Monday, rising 0.1%, while the S&P 500 and Nasdaq Composite fell 0.3% and 0.9%, respectively.
• Technology stocks lagged as Nvidia dropped 2% ahead of its earnings report, with Broadcom and Tesla also sliding
• Resonac Holdings plans to invest about 30 billion yen to boost production of advanced power semiconductors for EVs starting in 2027

• Tech weakness in Japan to continue, following the profit taking lead out of the US with NVDA numbers on Wednesday.
• Defence related may get a lift after yesterdays weakness, with Middle East tensions rising, Japan warding off a Chinese spy plane and ex-Defence Minister announcing candidacy for LDP leader.
• Typhoon Shanshan is expected in Kyushu. Resulting weakness on related names is usually short-lived and largely retail investor driven, making reverse positioning into the moves the more attractive tactic.

• Japanese Investors Begin Pulling Out from India Midcap Funds, Yet Overall Inflows Stay Positive
• Vedanta Prepares Rs 30,000-Crore War Chest for Deleveraging and Growth
• Jio Financial Services Gains Approval to Raise Foreign Investment Cap to 49%

• U.S. stocks surged on Friday, driven by a decline in Treasury yields after Federal Reserve Chair Jerome Powell signaled that rate cuts are imminent
• At the Jackson Hole Symposium, Powell stated that the “time has come” to adjust monetary policy, with the Fed open to a larger rate cut depending on incoming data
• Former Environment Minister Shinjiro Koizumi is the leading candidate to replace outgoing Prime Minister Fumio Kishida, according to a Nikkei poll

• Gold’s price advance is idiosyncratic moving against historical norms of estimated inflation and real rates.
• Demand from large central banks is not currently a factor in price discovery as the PBOC has stopped buying.  Gold’s safe-haven status has also declined since GFC in 2008/09.
  
• Easier monetary policy from the Fed and higher actual inflation continue to fuel lower real rates and provide substantial support for Gold’s price. 
  

• Yamaha Motor share sale by Toyota, Yamaha Corp and MS&AD may take time to clear, but the outlook for Yamaha Motor is improving. Expect Yamaha Corp strength on buyback expectations.
• Ueda signalling a slightly hawkish tone on Friday should be good for banks and utilities, but less good for exporters, tourism related and real estate.
• 6963 Rohm is starting to look interesting again with a few upcoming drivers which should help it rebound, including next weeks NKY225 rebalance announcement.

• The Global Emerging Markets Weekly summarises the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
• Macro data points: Thailand GDP growth, South Korea interest rates and GDP growth expectations.
• Companies mentioned:Samsung Electronics (005930 KS), Tencent (700 HK), JD.com (9618 HK), Reliance Industries (RIL IN)

• This week, markets remained relatively flat, as investors awaited guidance from monetary policymakers, particularly Fed Chair Jerome Powell’s much-anticipated speech on Friday
• With inflation trending downward—core CPI has fallen for four consecutive months to 3.2%—the Fed seems poised to ease monetary policy
• Topix rose +0.2%; 13 stocks reached 52-week highs, with only one stock, Colowide, hitting a new yearly low

• Hindalco’s $10 Billion Expansion to Drive Aluminium and Copper Growth.
• BC Jindal Group to Invest $2.5 Billion in India’s Renewable Energy Sector by 2029.
• Cement Firms Plan Rs 1.5-Trillion Investment to Meet Growing Demand.

• .Chariot (CHAR LN) C ; Target price £0.45 per share: Commencing drilling operations at high impact well in Morocco – Drilling operations have commenced on the Anchois East well (now named Anchois-3). The well has three objectives.
• An initial pilot hole will be drilled to evaluate the potential of the Anchois Footwall prospect, located in an undrilled fault block to the east of the main field with a 2U Prospective Resource estimate of 170 bcf in the main O Sand target.
• Our unrisked NAV for this prospect is £0.05/sh. A side-track will then be drilled to intersect and further evaluate the discovered gas sands in the Anchois field, with a current gross 2C Contingent Resource estimate of 637 bcf, in the eastern part of the main fault block of the field. 

• The S&P 500 declined 0.89% on Thursday, closing at 5,570, as investors awaited Federal Reserve Chair Jerome Powell’s speech at Jackson Hole
• Japan’s machine tool orders rose 8% year-on-year in July, marking the third consecutive month of growth
• Nippon Steel and JFE Steel are investing $1.08 billion in Whitehaven’s Blackwater coal mine in Australia

• A significant ¥22 trillion gap exists between book and market values, pushing companies to sell non-core real estate for capital efficiency. 
• 50% of TSE Prime Market firms trade below a P/B ratio of 1, reflecting low market valuations and driving asset divestitures. 
• Mizuho Trust saw an 800% surge from 13 to 110 inquiries in 2023, as firms seek to improve their P/B ratios through asset sales.

• Technological advancements are leading to a tectonic shift in computing
• Companies are currently over investing in infrastructure build out for future potential
• There are concerns about the long-term monetization and financial implications of these investments

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• US profit-taking in tech/growth will set a muted tone to start as the market holds its breath for comments from BoJ Gov. Ueda who addresses parliament this morning.
• China chip imports at record highs may add to pressure for the US to broaden its export restrictions for specific technologies as well as  for legacy node equipment.
• Koizumi leading the polls will be positive for renewable energy names which remain highly oversold after the multi-year weakness in Japanese small caps.

• 1810 HK/981 HK/AAPL US: Xiaomi’s Africa smartphone sales outgrow market in 2Q24 (+/+/-)
• XPEV US:Xpeng Motors’ revenue in the second quarter was in line with our expectations, and its losses were greater than our expectations(/)
• 1211 HK/1810 HK/XPEV US/NIO US/LI US:In the 33rd week of 2024, the delivery of new energy vehicles by Xiaomi fluctuated, Leapmotor and Li were strong, and NIO remained weak  (/////////)

• 700 HK/BABA US:Taobao Deals App Now Supports WeChat Pay for All Users. (+)
• 700 HK: <Arena Breakout: Infinite> Developing AI Technology: Voice-Command Teammates (+)
• NTES US: <Where Winds Meet> Final Pre-Launch Test Scheduled for August 28th (+)

• Stocks edged higher Wednesday after Federal Reserve minutes strengthened expectations for a September rate cut
• Japan set a record for foreign visitors in July, with 3.29 million arrivals, driven by a weak yen and summer holiday
• Japan Tobacco (JT) announced a $2.4 billion acquisition of Vector Group, the fourth-largest U.S. tobacco company

• Japan’s Meteorological Agency has issued a warning of an upcoming serious 8-9-point earthquake
• The expected epicenter is home to at least one dozen semiconductor wafer fabrication plants: “Fabs”
• While it’s hard to predict earthquakes, this news should be considered when investing in the area.

• Good retailer numbers and outlooks by Target and TJX setting a positive tone for the likes of Mercari on the read for consumer spending.
• Toll Bros numbers from the day before lifting US Homebuilders should see the likes of Sumitomo Forestry rebound off yesterdays weak price action.
• Japanese R/E names look increasingly vulnerable to downside ahead of Ueda’s speech tomorrow which should point to a BoJ trajectory for future rate hikes.

• The assassination of Trump in July has greatly increased the probability of his election as president this year. However, a Trump presidency is not necessarily good for healthcare industry.
• Trump’s reform in the field of healthcare has two major propositions – One is to achieve the independence of US pharmaceutical supply chain. The other is to reduce drug prices.
• From a US national security perspective, China’s APIs/CXO would be the segments with the highest sanction risk. China Biotech may also face some headwinds. The risk of “decoupling” further increases.

• Jackson Hole is annual event among central bankers and economists, where Fed Chair Powell will also be speaking on Friday
• In the scenario of a new Fed rate cut cycle, we expect Hong Kong RE, China RE and Singapore RE to benefit, while investors can reduce exposure in Japan RE
• We also recommend some trade ideas based on our analysis and suggest specific stocks

• Stocks declined on Tuesday, snapping an eight-day winning streak for the S&P 500 and Nasdaq
• Hitachi acquired U.S.-based Castle Hill Technologies to expand its digital transformation (DX) support in production, particularly in the pharmaceutical sector
• Oasis Management, an activist investment fund, disclosed a 3.96% stake in Mercari, making it the company’s sixth-largest shareholder.

• TXN lowering capex slightly and commenting that demand remains below 2019 levels a slight negative for SPE and analog/power names such as Rohm and Fuji Elec.
• Keysight technologies strong earnings and guidance beat after hours is a strong positive read for Anritsu who offers similar telco testing products.
• Poor sales figures from Hainan Island point to a continued tough operating environment in China for cosmetics names such as Shiseido.

• With consumption in the doldrums, one would expect none growing at double digits. This is actually not the case; 
• Further, how many Chinese Growth Equity names are accelerating in growth in the second half? Quite a lot;
• We reiterate our view that Chinese Internet names are took-all winners with strong pricing power, which are showing when they need to. The weak market sentiment is self-fulfilling.

• 700 HK: <Black Myth: WuKong> Tops Steam’s Most Played Games Now with Over 1.2 million Concurrent Players (+)
• 700 HK: Tencent’s <Rock Kingdom: World> Begins Beta Testing Today: iOS Only, Android/PC Versions Not Yet Available (+)
• 700 HK: <Honor of Kings> Matchmaking Algorithm to Be Overhauled (+)

• LKNCY US: The drink “Tengyun American” coffee package jointly launched by Luckin and “Black Myth: Wukong” game was sold out in its first day （/）
• 1519 HK/ZTO US: Weekly parcel volume grew ~29% y-o-y (+)
• Consumer Industry update:China’s Retail Industry Prosperity Index moderate rebound in August, mainly from offline retail recovery. (+)

• The WTR Sustainable Index was up 3.0% W/W versus the S&P 500 Index (up 3.9%), the Russell 2000 Index (up 2.9%) and the Nasdaq Index (up 5.4%).
• Energy Technology (13.8% of the index) was up 3.8%, while Industrial Climate and Ag Technology (46.2% of the index) was up 2.9%, ClimateTech Mining was up 2.7%, and Advanced Transportation Solutions (20.1% of index) was up 2.7%.
• Top 10 Performers: ZEV, ORGN, GIGA, GTEC, PSIX, GEVO, GCEI, COMM, ASPN, FF