Thematic (Sector/Industry)

• US stocks closed in the green, with record highs for both the tech-heavy Nasdaq Composite and the benchmark S&P 500
• Carlyle Group is launching a 430 billion yen ($2.8 billion) Japan-focused fund, one of the largest in the country’s private equity sector.
• Apan aims to sell 12 million next-generation software-defined vehicles (SDVs) domestically and internationally by 2030, targeting a 30% global market share

• German Treasury Secretary Yellen Urges US-Europe Collaboration to Counter China’s Industrial Dominance 
• ASML Holding NV (ASML NA) and Taiwan Semiconductor (TSMC) (2330 TT) Prepared to Disable Advanced Chipmaking Machines in Case of Chinese Invasion of Taiwan
• NVIDIA Corp (NVDA US) to Release Earnings Amid AI-Driven Growth Surge

• BEKE US: Visiting volume surged in the first weekend after new stimulus, and transactions increased slightly.（+）
• 300274 SZ/1211 HK/300750 SZ/LI US/XPEV US/NIO US:  Except for electric vehicles, new energy exports in April were hardly positive, indicating that capturing consumers is the key to offsetting geopolitical restrictions(///////////)
• BEKE US: Sluggish New Home Sales Prompt the PBOC to Introduce Further Stimulus Policies. (+)

• NTES US/700 HK: The NPPA has released the results for May’s domestic game code license approvals.(+)
• PDD US /BABA US /JD US /3690 HK/VIPS US : NBS publishes data social retail consumption data for April 2024 (+/+/+/+/-)
• 700 HK/BIDU US: Tencent announced the upcoming release of its consumer LLM application “Tencent Yuanbao.”（/////）

• Except ENN Energy (2688 HK), many stocks in the China gas utilities sector are still underperforming the HSI and HSCEI YTD. Yet, industry fundamentals are improving. 
• More cities and counties will implement a gas price pass-through mechanism, with 90% of cities and counties to be completed by late 2024, benefiting sector profitability.  
• Consensus forecasts are still conservative which places room for pick-up in share prices. CR Gas (1193 HK) and China Gas Holdings (384 HK) are opportunities.

• The tech-heavy Nasdaq rose by +0.65%, powered by a 2% gain in Nvidia’s share price
• Top Japanese companies agreed to an average wage increase of 5.58% during the annual shunto labor talks in March, the largest in 33 years
• Denso announced it will sell 78,127,800 shares, or 4.4%, of Renesas Electronics, more than half of its 8.6% stake.

• Q124 silicon wafer area shipments amounted to 2,834 MSI, down 5% QoQ and down 13.2% YoY. 
• In revenue terms, the top 4 global manufacturers reported revenues of $2.2 billion, down 10.4% QoQ and down 20.8% YoY.
• Taiwan’s recent earthquake did not impact Globalwafers shipments due to high inventory levels. However, tools were damaged, highlighting the risk of having so much wafer production in earthquake prone countries

• Subsystems did the results you should expect, and MKSI did a questionable (and understandable) convertible offering that tanked shares right after.

• All subsystems (except Ichor which sucks) look to be in a much better spot.

• The summary is that Subsystems revenue should continue improving into the second half and that 2025 will be a strong year.

• Friday marked a historic milestone as the Dow soared past the 40,000 mark for the first time, buoyed by promising data that supported expectations of Fed interest rate cuts
• Nvidia’s financial results announcement on the 22nd is the key event to watch in the coming week
• Shares in Isetan Mitsukoshi rose by over 20% after reporting FY23 operating profit up 83.6% to ¥54.3bn, driven by strong department store sales and cost reforms.

• China has unveiled measures to emphasize a major push for passenger and freight movement by railroad
• Rolling stock companies  play catch-up from the COVID under-investment years
• High speed freight trains on near term horizon to compete with highway for e-commerce business

• The Global Emerging Markets Weekly summarizes the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
• Macro data points: Chinese loan growth, inflation, and economic activity data. Indian inflation. Malaysian GDP growth.
• Companies mentioned:NetEase (9999 HK), Kakao Corp (035720 KS), Prosus NV (PRX NA), Naspers (NPN SJ)

• FII short contracts are at an all-time high, in the past which signifies the bottom of the market.
• But It’s a myth, as Number of contracts increased in Nifty due to change in lot size.
• Data is opposite to narrative. Believe on data, Not Narrative.

• Today, multiple cities in China introduced property stimulus measures to encourage buying new over existing homes. These policies also discourages people from selling their homes.
• Past measures encouraged home purchases by lowering mortgage rates and down payments, resulting in an increase in existing home transactions, because new home has developer default risks.
• This time, we saw for the first time, local Chinese governments introduced supplemental policies to guide new home purchases. We believe more of such measures can be on its way.

• 1810 HK/ZK US/NIO US/TSLA US/XPEV US/600104 SH: Xiaomi to start double-shift production of the SU7 in June （+/-/-/-/-）
• 1810 HK/1211 HK/ LI US/ NIO US/ XPEV US: The data shows that only 2% of FSD12 users are converted to paying users, which is good for China’s automatic driving(//////////)
• LI US / NIO US/1810 HK :Li Auto takes the lead in sales in the 18th week of 2024, while Xiaomi continues to lag behind（/////）

• NTES US : NetEase’s <Marvel Rivals> has commenced its first round of testing, with players providing positive feedback.（+）
• 4689 JP/4755 JP/4385 JP: PayPay QR-code system crashed for three hours (-/+/+)
• BABA US /BIDU US/700 HK: China’s generative AI starts price war mode, led by ByteDance and High-Flyer（/////）

• Arrow Exploration (AXL LN/CN)C; target price of £0.50 per share: Spudding high impact well – Drilling operations have started at the Carrizales Norte B Pad Horizontal Well 1.
• This is the first horizontal well drilled in the Ubaque on Tapir.
• Three more horizontal wells will be drilled on the pad.

• Q124 DRAM revenue $18.2 billion, up 6% QoQ and up 88% YoY. NAND revenue $14.1 billion, up 23.4% QoQ and 68.8% YoY
• ASP increases, HBM, NAND for enterprise SSD and looming shortages for legacy products are all mounting tailwinds for the beleaguered memory segment
• First quarter ASP increases for DRAM & NAND for Micron, SK Hynix & Samsung were almost identical. That’s quite a coincidence..

• This note is a weekly curated selection of Chinese news articles and company announcements focused on developers in distress
• We look for their deals, updates, specific project progress news (‘local signals’), as well as relevant local research commentaries about the market
• We do not verify the underlying data or provide any opinion, we only select and summarize the information; See direct links to sources

• Surging by 19.4% since the trough on 19-Apr, the HSI is now only 3.2% shy away from the psychological resistance of 20,000. We look at some potential profit-taking names. 
• Heavy-Weights like Meituan (3690 HK) and Tencent (700 HK) are among the best-performing ones YTD and since the trough. Hence they are more exposed, particularly for Meituan.
• Haidilao International Holding (6862 HK) and ENN Energy (2688 HK) are another two on the list. Their valuations are no longer inexpensive relative to 3-year earnings CAGR.

• In 2023, the global private credit market topped $2.1 trillion in assets and committed capital.
• And for a market that really emerged in the nineties, that growth is enough to warrant the attention that private credit receives.
• But rather than having the blanket statements like private credit is an emerging bubble, we wanted to explore the various segments of private credit, ask simple questions like where is this growth coming from?

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

• ICER draft update with little change. In a follow-up to Shroom Shmooz: How Valid Are ICER’s Concerns about MAPS’ MDMA-AT Trials? , we highlight the amended ICER report published on May 14, 2024, which incorporates the public comments it received.
• In short, there is no substantive difference between the updated and initial drafts. The skeptical tone of the integrity of the Phase III trial outcomes and conclusion that the current publicly available evidence is insufficient to assess the overall net benefit of MDMA- AT remain.
• The main difference between the two reports is that the revised version contains more discussion on comorbidities commonly associated with PTSD. 

• The supply and demand dynamics of private credit
• The history of the private credit markets
• Differentiation versus traditional solutions, and even differentiation within its own subsegment

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

• Copper is trading above 5.05 USD/lbs and has rallied over 29% YTD. Jeff Currie was quoted as saying “Copper is the New Oil”
• Sprott launches physical Copper Trust, copying the uranium playbook. Removing physical copper from the market.
• Uranium in 2023 and Cacao in 1H24 show what commodity prices can do if investors panic. Is copper making a parabolic move next?

• 9926 HK/1801 HK/ BGNE US/9995 HK: US Biosecure Act extended Chinese CXO collaboration until 2032  (+/+/+/+)
• BGNE US :BeiGene’s performance in the first quarter of 2024 exceeded expectations, especially benefiting from overseas BRUKINSA(/)
• ZLAB US:Zai Lab’s revenue and profit in the first quarter of 2024 exceeded expectations, mainly due to Efgartigimod.(/)

• JD US/DADA US/3690 HK:JD.com Upgrades “Hour Delivery” to “Instant Delivery”, reflecting strong growth potential in the on-demand retail sector.(+)
• 700 HK: <Honors of Fighters> will be released on May 24th.(+)
• ZTO US/1519 HK/PDD US/BABA US/Douyin: PDD launches new product price competitiveness rules (+/+/-/-/-)

• The WTR Sustainable Index was up 1.6% W/W versus the S&P 500 Index (flat), the Russell 2000 Index (up 1.2%), and the Nasdaq Index (up 1.5%).
• Energy Technology (12.3% of the index) was down by 2.4%, while Industrial Climate and Ag Technology (59.3% of the index) was up by 4.4%, ClimateTech Mining was down 1.1%, and Advanced Transportation Solutions (22.3% of index) was down 3.3%
• Top 10 Performers: LIDR, PNPN, PSIX, GCEI, EGT, MULN, IBAT, SLI, BLBD, ZEV

• Amidst cautious anticipation of impending inflation data, the U.S. markets saw minimal movement on Monday
• The Bank of Japan signaled a hawkish stance by cutting its purchase of Japanese government bonds; the move suggests potential interest rate hikes following the first increase since 2007.
• Softbank shifts its business model towards AI-focused ventures, aiming to lead the AI revolution.

• Continued tailwinds for oil tanker stocks with tight markets keeping rates high
• The copper supply and demand story is becoming more widely known and speculative interest is rising
• Oil corrects  as the geopolitical premium subsides,but the longer-term story remains intact

• Since our last note in November, there have been 9 more acquisitions in Canadian small-caps, all at significant premiums.
• In this report, we analyze how the 9 newly acquired firms fit into our 6-part framework for identifying takeout candidates.
• Our potential takeouts watchlist was up 22% vs. the TSX up 14% and XCS up 15% since November.

• Furniture and furnishing stocks performed well last week. All three of the WTR indexes outperformed the broader market, led by Residential Manufacturers & Suppliers (+3.3%), Commercial/Contract Furniture (+3.2%) and Home Goods Retailers (+2.7%), which outperformed the broader markets (- 0.1% to +0.8%) and the Mass Retailers Index (+0.1%).
• Mattress demand remains weak. Tempur Sealy International (TPX) CEO Scott Thompson noted in his 1Q24 remarks, “You’d have to say the bedding industry is in a depression and has been in one for a number of quarters” , with demand down an estimated 15% industry-wide in the first three months of the year.
• For TPX, sequentially, demand was weakest in January and improved (though erratically) through April, where it was ‘flattish’. Higher- end price points were a bright spot.

• Despite relatively strong earnings, the US cannabis MSOS ETF fell 3.52%, while the global YOLO ETF dropped 2.21%.
• With four of the five Tier 1 MSOs reporting, on average they have beaten revenue consensus by 2.27% and adjusted EBITDA consensus by 9.15%. See page two for more details on Tier 1 earnings results.
• Verano (NEO: VRNO, OTCQX: VRNOF) reported better-than-expected results last week and Co- Founder, Chairman, and CEO George Archos joined us on Higher Exchanges. 

• The Dow extended its winning streak to eight sessions, marking its best week of the year.
• U.S. central bank is likely to proceed with interest rate cuts this year, although the timing and magnitude of the policy adjustments are uncertain
• Toyota plans to sell part of its stake in KDDI for approximately 200 billion yen, intending to fund investments in car electrification

• Terms of credit on US credit card loans have surged to levels well higher than any period on record, since 1972 suggesting far worse delinquencies, risk aversion by lenders.
• There are important implications for the 2nd and 3rd order effects on consumption in the US economy, as well as obvious 1st order implications for banks, card issuers.
• In September 2022 delinquent card loans rates bottomed at 7.6% and this delinquency rate is now at 9.7% in December 2023.

• To make my content readable, this is an optics-only earnings update.
• I will discuss everything together and put together a high-level overview.
• The specific things I am interested in are Marvell’s ZR and custom silicon.

• PDD US/SHEIN/AMZN US: Temu opens up platform to brand merchants (+/-/-)
• TCOM US/3690 HK/ATAT US  :  Visa-free policy for 12 countries including France extended until December 31, 2025.(+/+/+)
• 700 HK: After the release of new limited skins for <League of Legends: Wild Rift>, there has been a noticeable rebound in grossing rankings.(+)

• ATAT US/TCOM US : The international hotel management group maintains a cautious attitude towards China throughout the year.（-/-）
• 1211HK/LIUS/NIOUS/XPEVUS/1810HK:EV sales solid in the 5th week of April 2024, NIO continues to benefit from SU7 overflow, BYD continues to be strong, and Xiaomi deliveries decline for three consecutive weeks.(+/+/+/-/-)
• 300274 SZ / 300750 SZ/ 1211 HK : Tesla’s Shanghai energy storage gigafactory was approved, mainly producing energy storage for export, benefiting China’s supply chain.(+/+/ -)

• The Global Emerging Markets Weekly summarizes the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
• Macro data points: Indonesian and Philippine GDP growth, and Chinese exports data.
• Companies mentioned:Huawei Technology (40978Z CH), Naver Corp (035420 KS)

• Japanese equity indices and 10-year JGB yields remain flat as overseas markets benefit from positive earnings and softer labor data in the US.
• Topix 500 earnings reports influence individual equity movements with around 50% reported; remainder expected next week.
• Notable stock movements include Relo Group (+22%), Kose (+22%), and Kawasaki Heavy Industries (+21%), with earnings exceeding expectations, while Seibu Holdings (-16%) faces uncertainties in its real estate strategy.

• India, with high data generation but low data center capacity, is attracting investments in India.
• Rapid digital transformation and lower setup costs are driving India’s data center market growth, offering significant investment opportunities.
• Understanding India’s potential as a data center hub highlights investment prospects and the need for sustainable practices in infrastructure development.

• GeoPark (GPRK US)C; target price of US$26 per share: More favourable offtake contract in Colombia – GeoPark has signe da new offtake contract with Vitol for a minimum of 20 mbbl/d.
• The agreement improves GeoPark’s price realizations by US$0.15/bbl vs the current agreement.
• As part of this transaction, GeoPark will obtain immediate access to committed funding from Vitol for up to US$300 mm, with an option to increase by another US$200 mm for a total of US$500 mm, in prepaid future oil sales over the period of the offtake contract.

• ICER pours cold water on MAPS’ MDMA-AT candidate for treating PTSD.
• In March, the Institute fo  Clinical and Economic Review (ICER) published its draft evidence report on MAPS’ (aka Lykos Therapeutics) Phase III clinical trials.
• The draft report, which is not the final version, controversially questions the integrity of the studies and validity of MAPS’ reported results.

• Poseidon co-founders Emily and Morgan Paxhia joined us on the Water Tower Hour podcast to discuss the rescheduling news.
• Those interested can listen to this podcast on Apple Podcasts, Spotify, or on our website.
• On April 30, 2024, the DEA reportedly agreed with the HHS recommendation to reclassify cannabis from Schedule I to Schedule III.