Thematic (Sector/Industry)

• Geopolitical concerns and disappointing ASML earnings were the key triggers for sharp pull back in equities this week
• Next week in Japan, all eyes will be on the Bank of Japan and the continued weakness in the exchange rate. Earnings season just around the corner too
• Semiconductor names were hit hard this week – Lasertec (-21%), Tokyo Electron (-15%) and Disco (-11%) sharply lower. 

• Tethys Oil (TETY SS)C; target price of SEK100 per share: Increasing further the size of the prize/Considering Algeria – The South Lahan area on Block 58 is estimated to hold 55-523 mmbl prospective resources (P90-P10 case) with a mean case of 251.8 mmbbl prospective resources across six prospects in the Ara Carbonate.
• Combined with the previously disclosed prospective resources of the Fahd area in the north-eastern part of Block 58, Tethys Oil’s unrisked recoverable prospective resources on the block are estimated to be 435.9 mmbbl (Pmean).
• The geological chance of success ranges from 6% to 11% for the six new prospects.

• 1810HK/1211HK/LI/XPEV/NIO: The growth rate of new energy vehicles fell back in the 15th week of 2024,BYD and Li delivered stably,AITO slowed down due to L6,XiaomiSU7 impacting TeslaM3 and BYDHan（/）
• BEKE US: Residential new home sales value fell by 30% YoY in 1Q24, but slightly better than consensus(+)
• 300750 SZ: CATL’s first quarter results show strong pricing power amid fierce price war（/）

• PDD/BABA/JD/3690.HK/VIPS: NBS publishes data social retail data for March 2024 (+/////-)
• NTES US: NetEase’s <Naraka Mobile>, has completed its pre-launch testing phase with overall positive feedback, and pre-registration reached 25 million. (+)
• BABA US/3690 HK : Eleme launches semi-managed mode for retail merchants, adding pressure to Meituan instashopping

• US stocks closed mostly lower on Thursday, with the S&P 500 down 0.22% for its fifth consecutive session of losses
• After-Hours, Netflix revealed strong subscriber growth but slightly missed revenue guidance, causing its shares to dip over 2%
• Oracle plans to invest over $8 billion in Japan over the next decade to expand its data center infrastructure

• We highlight 14 stocks in Asia that look interesting to us based on our FVMR methodology
• Portfolio changes: Five stock remains, nine stocks added to our portfolio
• Since its inception, it has generated a before-fee total return of 188% versus the MSCI Asia ex Japan of 68%

• We highlight 14 stocks in ASEAN that look interesting to us based on our FVMR Methodology
• Portfolio changes: Two stocks remain, 12 stocks added to our portfolio
• Since its inception, the portfolio has generated a before-fee total return of 227% versus MSCI ASEAN’s 26%

• Entering 2024, more provinces/regions have included assisted reproductive medical service projects into medical insurance reimbursement scope. It is expected that the government will accelerate the introduction of supporting measures ahead.
• Livzon’s performance in 2023 was disappointing.For BGI, even if the BIOSECURE Act passes and BGI is sanctioned by the US, the overall impact on the company is limited and controllable.
• Jinxin has gradually recovered from the negative impact of COVID-19.With the recovery of international flights and the increase in the number of patients, the Company would be back on track. 

• There has been a significant increase in out-licensing deals in China over the last four years; numbers are at an all-time high. 
• There is a big deviation between actions of multinational drug companies and equity investors – over a similar period, the FTSE Pharma and Biotech index is down over 50%.
• We have witnessed an improved environment for aspiring local Chinese biotech and pharma companies.

• Setting up to be a crucial quarter for the major cloud infrastructure providers and broader tech as investors focus on the cost/benefits of AI.
• Over the last decade, AMZN, MSFT, and GOOGL have garnered outsized investor attention, in part due to their size, but equally due to each of their rapidly growing tech infrastructure businesses (AWS, Azure, and GCP, respectively).
• Based on the capex commentary from all three exiting the December quarter, investors are hoping for early signs of business AI traction, but also bracing for greater clarity around the costs.

• The market is experiencing its first bout of volatility this year, with the S&P trading below 50-day moving average
• Toshiba is considering cutting its domestic workforce by 5,000, approximately 7% of its total in Japan, in its latest move to accelerate restructuring
• ASML’s Q1 orders fall short, reflecting chipmakers’ cautious stance on equipment purchases.

• PDD US: Temu merchants report a new round of forced price reductions (+)
• 3690 HK: Meituan Restructures Delivery Business to Boost Efficiency, Refine Operations Amid Slowing Order Growth(+)
• Douyin/1797 HK/2618 HK/3690 HK: JD Logistics Partners with EastBuy to Launch “Delivery in hours” Service, Directly Competing with Meituan(+/-)

• 1810 HK: Xiaomi SU7 confirmed order exceeded 60K, monetization means starting to emerge（/）
• HTHT US/ATAT US: Orange Crystal Hotel will launch a new version with a goal of reach 750 hotels by 2025, intensifying competition with Atour.（-） 
• 300750 SZ: GAC announced that its in-house all-solid-state batteries will be put into mass production in 2026（/）

• With long-term structural factors supporting growth, healthcare services market is expected to have a low double-digit CAGR over the next five years.
• Most of the leading hospitals are operating with high occupancies, which justifies their aggressive plans. Profitable revenue growth and low leverage support their expansion plans.
• With expanding scale, the players are well positioned to report faster revenue growth and better margins in coming years than their respective historical figures.

• Google introduces Axion, their new CPU designed for cloud-based workloads
• Facebook unveils second version of RiSC-V based processor for AI workloads
• Marvell announces custom projects with another big hyperscaler, highlighting the trend towards custom silicon solutions for AI workloads

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

• PC, Smartphone Unit shipments both registering YoY growth in Q124
• TSMC will beat guidance & likely guide Q224 up ~5% QoQ. Samsung’s pre earnings showed strong recovery in operating profit
• Server unit shipments are on a ~17% YoY growth run rate

• The S&P 500 edged down by 0.21% as investors digested Federal Reserve Chair Jerome Powell’s remarks suggesting a prolonged period of elevated interest rates
• China’s gross domestic product (GDP) growth surged to 5.3% year-on-year in the January-March quarter, surpassing expectations
• OpenAI, a prominent U.S. artificial intelligence company, is gearing up to launch an enhanced version of its core large language model with triple the processing power for Japanese language tasks

• Based on my site visits and recent discussion, the consensus is that China is experiencing a sharp economic slowdown, as seen as slowing consumption and increasing unemployment
• But the equity market is ALWAYS forward looking, investors may bet on policy support which may provide downside support to the equity market
• Property market is not doing well, but there are early signs of stabilizing.  In this insight, we look at several key factors including fund flows, positioning, valuation and risks

• The data coming out of US bank results should not surprise and it is also not something that should suddenly improve
• BAC reported net charge offs at USD1,498m in 1Q24 up from USD807m in 1Q23, a substantial YoY delta. The QoQ delta is accelerating too, up USD306m in the 90 days
• Net interest income is now in decline at BAC at -3% YoY in 1Q24, given the disproportionate rise in funding costs vs interest income

• The Dow Jones Industrial Average marked its sixth consecutive decline amidst fears of further conflict escalation
• The yen slipped to the mid-154 range against the dollar on Monday, marking its lowest level since June 1990
• Sony Group is preparing to unveil a more potent PS5 console, possibly by the end of this year.

• Zooming out first for a big picture perspective – helpful away from the news & chatter:
• Bears Make Headlines & Lose Money, Bulls Make Money! As always … !
• The bear case sounds very smart very often, only problem is, it’s quite rarely right … !

• The conversation revolves around the significant energy consumption of AI data centers and the potential consequences of this trend
• Tech companies are facing the challenge of balancing their energy needs with their sustainability commitments
• Brian Janus, a former energy hire at Microsoft and now co-founder of Cloverleaf Infrastructure, provides insight into this issue and potential solutions

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

• The last week of SPACs was packed with deals, IPOs, and other activity.
• A SPAC is set to take a hotel chain public, and another blank-cheque firm is set to merge with an investment platform.
• Also, the former CEO of a SPAC merging with Trump’s social media company sues the firm while a serial SPAC sponsor loses half his fortune as dealmaking slows down.

• The WTR Sustainable Index was up down 2.0% W/W versus the S&P 500 Index (down 1.6%), the Russell 2000 Index (down 2.9%), and the Nasdaq Index (down 0.6%).
• Energy Technology (12.4% of the index) was down by 4.6%, while Industrial Climate and Ag Technology (57.1% of the index) was down by 1.9%, ClimateTech Mining was up 0.1%, and Advanced Transportation Solutions (24.1% of index) was down 2.2%.
• Top 10 Performers: WAVE, AMRS, ZEV, TPCS, KULR, VIEW, CRGE, NHHH, EAF, AGX

• Global markets are likely to react cautiously following Israel’s interception of over 200 Iranian drones and missile. Bitcoin saw sharp 5%+ decline
• Japan’s greenhouse gas emissions hit a record low in fiscal 2022 at 1.14 billion tons of CO2 equivalent, down 2.5% from fiscal 2021
• US Steel shareholders have greenlit Nippon Steel’s proposed acquisition, which offers a 40% premium on the trading price at the time of announcement

• Iran led a direct attack on Israel, prompting fears of a wider war in the Middle East and jittering the global markets  
• We think the futures market will start rough, but eventually chill towards the end of the day. Iran has stated its objectives are met and is not keen to continue 
• Western countries are taking the diplomatic route with Antony Blinken saying that the U.S. did “not seek escalation”. This is a positive sign  

• Wells Fargo has seen its net interest income growth move to -8.3% YoY in 1Q24 from +8.3% YoY in 1Q23
• The rate of net interest income growth at JPMorgan has nearly halved in the most recent quarter, to +11.4% YoY
• Banks’ high-frequency data on balance sheets suggest that there will remain worsening growth rates of net interest income for US banks

• China’s pricing process is becoming more predictable. There have been several positive changes that favour innovation.
• As a comparison, the already complex European system is becoming more complex, and is implementing further price cuts.
• Several other countries including the US are currently implementing or looking to implement price controls.

• 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: South Korean interest rates, Chinese inflation data.
• Companies mentioned:Wipro Ltd (WPRO IN), Taiwan Semiconductor (TSMC) (2330 TT), Samsung Electronics (005930 KS), NetEase (9999 HK)

• The Nikkei and Topix indexes advanced 1.36% and 2.11%, respectively, for the week.
• Fujikura (5803): +18% – The Nikkei’s reported $2.9bn Microsoft data center investment in Japan fuels optimism for fiber optic cable companies like Fujikura
• Japan Steel Works (5631): +14% – JSW’s shares continue their upward trend, fueled by optimism surrounding nuclear power and defense spending

• 1810 HK/1211 HK/LI/NIO/XPEV :In the 14th week of 2024 , new energy vehicle sales growth is stable, Xiaomi affects Tesla and AITO, LI overtook AITO, and BYD fell back（/）
• XPEV US: Nearly a thousand units of Xpeng G9 shipped to Germany, with total export value exceeding 500 million yuan (/)
• TSLA US: Speculation has it Toyota may cooperate with Huawei globally on autonomous driving（/）

• ADX Energy (ADX AU)C; target price of A$1.00 per share: Restarting production at Anshof – The Permanent Production Facility (PPF), with a capacity of 3,000 bbl/d of liquids, has been commissioned and the Anshof-3 well has recommenced production at a rate of 134 bbl/d with no water.
• The operation has been undertaken in line with expectations and within budget.
• The oil production rate at Anshof-3 is 16% above the rate prior to shut-in.

• 03888 HK/BIDU US/BABA US: Kingsoft WPS has released an upgraded AI version, with the new AI platform integrating “Ernie Bot” and “Qwen”. (+)
• 700 HK/002624 CH/BILI US: The NPPA Has Released the Latest Batch of Import Game Code Approvals. (+/+/-)
• 1519.HK/SE: J&T reports Southeast Asia parcel volume increased 55% yoy in 1Q24 (+)

• Tech-Driven gains pushed the S&P 500 up by 0.74%, while the Nasdaq Composite hit a record high, surging 1.68%
• Japanese Prime Minister Fumio Kishida addressed U.S. legislators, emphasizing Japan’s readiness to share the responsibility of upholding the international order
• Fujifilm Holdings plans to invest $4.5 billion by 2028 to expand its biopharmaceutical contract manufacturing business

• Australia domestic credit growth is now at -2.2% YoY in January 2024, the worst figure since August 2021.
• There are negative implications for the delta of net interest income for Australia’s banks as loan growth moves negative.
• Risk of rising credit costs is higher, not only from worsening insolvencies with corporates, but also with rising mortgage bad loans.

• From ancient rituals to modern medicine. Psilocybin is a natural psychedelic compound contained in more than 200 species of (magic) mushrooms that grow in diverse natural environments worldwide, from humid tropical forests to grassy meadows to urban green spaces.
• Psilocybin has a long history of use in religious rituals and divinatory ceremonies of indigenous cultures going back millennia, but in more modern times has attracted a growing interest from modern medicine for its potential therapeutic effects on the neural pathways.

• The properties of psilocybin and its active form psilocin closely resemble serotonin.

• To an Australian individual investor, franking credits simply recognise tax already paid by a company on their earnings. These credits may reduce tax you would otherwise pay on dividend income.
• This dividend imputation system prevents double taxation and essentially treats company tax paid as a prepayment of shareholder tax.
• The system makes a lot of sense. It’s a curious thing so few countries have adopted a similar corporate tax structure.

• Y/Y improvement for LCD, PMIC, GaAs RF, gaming card, cooling system, semi equipment&material, semi fab construction, memory, and foundry vendors but more y/y deterioration for WiFi and CMOS sensor vendors
• After 6 vendors beating consensus, we might see AI server supply chain, large panel LCD driver, WiFi/networking, and NAND flash vendors in US to report a better than expected 1Q24.
• We might see 8″/12″ raw wafer (like Shin Etsu, SUMCO , National Silicon Industry, Siltronic AG) vendors in Japan, China, and Germany to report a worse than expected 1Q24.

• US stocks tumbled on Wednesday amid concerns sparked by higher-than-anticipated inflation
• The Japanese currency weakened to over 153 yen versus the dollar, a level not seen since 1990
• Seven & i Holdings unveiled plans to bolster its convenience store business in North America through mergers and acquisitions

• XPEV US/1211 HK：Didi Autonomous Driving and GAC Aion joint venture approved to launch first commercial L4 model in 2025（///）
• 3759 HK/1548 HK/9926 HK/BGNE US/9995 HK/1801 HK：U.S. biologic drug ban may spread to more CRO companies, positive to Chinese innovative drug companies（/）
• 1810 HK/1211 HK：Lei Jun announced that more than 100,000 people have ordered Xiaomi SU7, and the number of locked orders has exceeded 40,000.（///）

• Despite the frosty relationship with the US, Chinese exports to the US are thriving.
• Imports as a proxy of local activity were distorted by the Covid trade disruptions, however we expect the uptrend to remain intact.
• The pandemic resulted in an elevation of drug testing. Post a slowdown from the heightened level, development activity remains healthy.    

• 700 HK：Tencent’s <Need for Speed Mobile> is set to be released in 3Q24.(+)
• Douyin/3690 HK: Douyin to acquire payment license for local life services biz, implying heightened competition for Meituan.（-）
• TCOM: Railway passenger volume during Qingming holiday expected to reach 111% of 2019 level, showing a decline compared to the Spring Festival.