Thematic (Sector/Industry)

• The AI GPU market has been exploding, and this has turned the DRAM market’s downturn into a strong upturn
• With this growth, DRAM manufacturers have seen their business turn around, thanks to increased use of HBM
• Two questions concern us: Will AI growth last? Will increased competition in HBM DRAM create a price collapse?

• 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

• A wave of mergers and acquisitions in the oil and gas sector has offered opportunities for Chinese companies to optimize their overseas assets, but uncertainty in the offshore investment environment is also rising, a report by a think tank part of state-owned oil giant China National Petroleum Corp. (CNPC) found.
• The total value of global oil and gas mergers and acquisitions skyrocketed to more than $250 billion last year, including mega deals involving ExxonMobil and Chevron, making 2023 the largest upstream annual spend in more than a decade.
• “The competitive landscape is reshaping, and the era of mega mergers in the industry has arrived,” Wu Moyuan, vice president of CNPC Economic and Technological Research Institute, said Wednesday at the release of the report.

• The Nikkei 225 Index surged 2% to a record high of 39,911, driven by a weak yen, robust corporate earnings, and optimism surrounding artificial intelligence
• Japan’s stock market has quietly undergone a significant transformation, emerging as an increasingly attractive investment prospect. Investors are Underweight
• The decline of cross-shareholdings signals a positive shift towards improved capital allocation and, enhanced shareholder value. I see TWO key positives….

• ADX Energy (ADX AU)C; target price of £A$0.65 per share: High impact well spud in Austria – The Welchau-1 gas exploration well was spudded on 24 February.
• Calima Energy (CE1 AU)C; target price of A$0.13 per share: Completing divestment of Blackspur – Blackspur has been sold for A$81.6 mm, after tax provisions and net debt adjustments.
• Calima will distribute A$80 mm (~A$12.6 per share) as dividends.

• Nearly half of the power traded on China’s electricity market in 2023 came from wind and solar plants, doubling from just two years ago, according to an energy expert.
• The portion of “new energy”— which refers to wind and solar energy — in the total amount of power traded last year surged to 44%, up from 22% in 2021 and 32% in 2022, according to figures released at an industry seminar held in Beijing on Tuesday.
• New energy is expected to be “fully integrated” in the country’s electricity trading by 2030 as Beijing deepens its power reforms, said Dong Feifei, a power engineer who presented the figures.

• 2023 DRAM + NAND revenues declined 36% YoY from $140.3 billion to $89.2 billion. This followed a 14% decline YoY in 2022.
• Forecasting ~40% YoY growth in 2024, bringing overall memory revenues back to roughly 2022 levels
• ASML’s Memory-related WFE revenue in 2023 was an all time record high at $5.9 billion. Much of that was spent in China and its impact remains to be seen..

• The Nasdaq Composite surged 0.90% to a historic closing high of 16,091.92
• Japan’s January factory output plummeted by 7.5%, the sharpest decline since May 2020
• Four non-life insurance companies, including Tokio Marine & Nichido Fire Insurance, announced the sale of all cross-shareholdings valued at approximately 6.5 trillion yen

• Semiconductor chips are essential building blocks of innovation and technological advancements in areas such as artificial intelligence, electrification, and cloud computing.
• The global shortage of semiconductor chips has affected industries beyond high-tech products, such as the automotive industry where chips are vital for various functions like safety features, infotainment systems, and driver assistance technologies.
• Understanding the significance of semiconductor chips can provide valuable insights for investors looking to capitalize on opportunities in the growing semiconductor industry.

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

• Nikkei Futures point to a weak open as US stocks decline ahead of pivotal inflation data
• Apple culls its Auto business to focus on AI….further proof that Toyota had the right strategy all along. 
• Apple’s Vision Pro is stuffed with seriously high-end Japanese electronics.

• The S&P 500 and Nasdaq closed Tuesday with slight gains ahead of key inflation data.
• Japanese trading houses soared to record highs following Warren Buffett’s bullish remarks, robust earnings, and share buyback plans
• Japan core consumer price index, excluding fresh food, rose by 2% year-on-year, down from December’s 2.3% increase

• Large US bank weekly data shows a fragile economy still with negative 1.4% C&I loan growth YoY in the most recent week’s data
• Total loans for large US banks are up only 0.5% YoY in the most recent week which is down from 0.7% to 1.3% just 4-5 months ago
• Large time deposit growth is decelerating but remains very high at 84% YoY in the most recent week’s data, suggesting still core income pressure

• I was today-years-old when I learned that Europe has its own version of the Magnificent 7; the basket of giga-cap US tech companies comprised of Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla.
• The GRANOLAS Dubbed the “Granolas” by Goldman Sachs in 2020, this basket was chosen because it echoed themes present amongst the Mag 7 (back then it was just “FAAMG”) .

• Namely, they were market leaders in the STOXX 600 Europe Index, they had grown to become an increasingly larger share of the market, and their earnings had far outpaced the broader index.

• LI/XPEV/NIO/1211 HK:  Sales of strong EV brands held up better during CNY, Li and Tesla led and AITO and BYD followed (+)
• BEKE : ByteDance suspend self-operating home decoration business( + )
• ZLAB:Bristol-Myers Squibb （BMS） outsources Opdivo sales in ten southwestern provinces to Zai Lab, a long-term positive but with many prerequisites (+)

• 1810 HK/BIDU: Google’s Gemma is an important move for client-side AI (+)
• 3690 HK: Local news said Douyin has deemphasized take out business (+)
• PDD/4689 JP/AMZN/4385 JP/4755 JP: Data indicates that Temu is particularly popular in Japan (+/~/-/-/-)

• The growth in retail media (brand advertising delivered in stores based on detailed customer data) continues to be one of the big trends in 2024.
• Large retailers are keen to add this new revenue stream – and lots of brands want to advertise with them – and companies like Rakuten are offering this service directly.
• For many retailers, they still need help from experts in advertising and data analysis to make it work, providing an opportunity for Hakuhodo among others.

• The WTR Sustainable Index was down by 0.5% W/W versus the S&P 500 Index (up 1.7%), the Russell 2000 Index (down 0.8%), and the Nasdaq Index (up 1.4%).
• Energy Technology (12.7% of the index) was down by 10.5%, while Industrial Climate and Ag Technology (55.2% of the index) was up by 2.0%, ClimateTech Mining was down 6.8%, and Advanced Transportation Solutions was down 2.2%.
• Top 10 Performers: EFOI, IPWR, CYDVF, ROOF, PGTK, CLIR, LITM, FIX, LOOP, RE

• With the “Postcard” series, our objective is to bring to our readers on-ground insights based on interactions across key channels located in tier 2 and tier 3 locations.
• For this Postcard, we traveled to Mandya, a city in the southern state of Karnataka, also known as the ‘Sugar City,’ on a rented E6 by BYD (1211 HK).  
• Sectors in focus include Consumer Finance, Mortgage Lenders, and Retailers.

• Chipmakers and chip-making tool providers are set to continue benefitting from the surge in demand that has rallied the equity prices for the companies that are at the forefront of AI-related semiconductor research, development, and production.
• One of the key drivers in the resurgence of new chip demand is the acceleration of upgrade demand for PCs and smartphones to meet the novel generative AI needs, while companies build up storage and data center capabilities to transition to utilizing generative AI capabilities in their operations.
• However, so far, the benefit of the market rally has been disproportionately felt across the industry.

• US equities fell slightly on Monday as US Treasury yields rose; oil prices higher on shipping disruptions
• Nikkei 225 hits record highs, up 0.35% on Monday. NKY Futures point to a positive open in Japan; key inflation data in Japan today
• Fujikura stock surges 40% post-earnings; Quarterly results prompted upward full-year outlook revision. Several LT structural drivers; Stock cheap versus global peers

• The announcement of “Draft for Comments on the Regulations on the Management of off-campus Training” has led to a 43.6% rebound of the education sector from the 2024 trough.
• The “Draft” has cleared regulatory worries on after-school tutoring of high school students and non-academic subjects. For higher education space, we like China East Education (667 HK). 
• New Oriental Education & Techn (9901 HK), TAL Education (TAL US), and Gaotu Techedu (GOTU US) are the most direct beneficiaries of the “Draft”.

• We compare the performance of the top-4 global online travel agents (OTA) from the recently concluded 2023 result
• All the OTAs recorded strong 2023 and 4Q23, but the forward outlook indicates growth rate is slowing in North America and Europe while Asia is picking up speed  
• Trip.com is indeed comparatively most attractive among the big-4 global OTAs; our fellow Smartkarma Insight provider’s conviction is justified

• Record number of UK funds now exposed to Real Estate sector.
• CT, BlackRock and Quilter Among Funds Adding to Exposure Since Mid 2023.
• SEGRO and Land Securities the key holdings and the drivers behind the recent rotation

• US natural gas market seeing production reduction by Chesapeake, but overall storage trajectory only slightly affected
• European natural gas market showing signs of rebound in industrial demand, with companies reporting higher demand in key countries like France and Germany
• Weather forecasts and production reductions in the Lower 48 indicating potential for lower prices for longer in the natural gas market

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

• Despite working in various headquarters in European banks, my work likely did not reach directly more than 500 people at any time (confidential/secretive/sensitive etc), hence a 10x bigger reach now is quite crazy and interesting for sure!

• Let’s begin with 2 charts on US monetary policy and inflation that I was humbled to have them liked and retweeted on Twitter by the great Danielle DiMartino Booth (CEO & Chief Strategist, QI Research LLC, Fmr Federal Reserve insider, Economist): M2 with a negative growth of -2.04% working to make inflation low / back to target

• note how the -4.63% growth last year was a rate that meant it was the fastest pace of money supply compression since Jan 1933 … let that sink in!

• The US cannabis MSOS ETF broke a two-week slide and gained 6.77% over the holiday-shortened four- day trading week.
• Once again, the global YOLO ETF lagged at just 0.27% over the same stretch. MSOS is +37.23% YTD, while YOLO is +22.18%.
• The discrepancy shows the increased interest in US cannabis due to the potential for rescheduling and the continuing difficult environment for most Canadian operators.

• Direct selling as a business model has a large global presence.
• According to the World Federation of Direct Selling Associations (WFDSA), approximately 77% of global direct sales were conducted outside the US in 2022.
• Therefore, foreign currency exchange rates can have a significant impact on reported earnings and cash flows for the dollar-based direct selling platforms, such as NUS, HLF, USNA, and LFVN.

• US stocks closed near record highs, with the S&P 500 gaining 1.6% and the Nasdaq adding 1.4%% after reaching record levels earlier in the week.
• European equity indexes held onto multi-year highs. German and French stocks hit an all-time high
• The Nikkei 225 Index surpassed a previous all-time high reached during the 1989 bubble in Japan

• 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 tourism and interest rates, Thailand GDP growth, South Korea exports
• Companies mentioned:JD.com (9618 HK), XPeng (9868 HK), Vodafone Idea (IDEA IN)

• ADX Energy (ADX AU)C; target price of £A$0.65 per share: Drilling update in Austria – Drilling operations at the high impact Welchau prospect are now expected to commence on 24 February with a duration of ~39 days.
• ADX will now use the RED E200 rig instead of RED E202.
• Arrow Exploration (AXL LN/CN)C; target price of £0.60 per share: Successful appraisal drilling expected to boost reserves – The CN-5 well encountered 45 feet of Ubaque pay to base of sand with 25% porosity and 5 Darcy permeability.

• SPAC IPO market continues at a slow pace. The first seven weeks of 2024 have seen four new SPACs come to market.
• By comparison, there have been more than three times as many traditional IPO listings since the start of the year.
• On a more positive note, two of the three SPAC IPOs priced in February have been relatively sizeable offerings: Legato Merger Corp III (LEGT) generated gross proceeds of $201.25 million, while Helix Acquisition Corp II (HLXB) delivered $184 million in funds to its trust. 

• 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

• Nvidia Q4 revenue +260% to $22 billion; Q1 guidance $24 billion; beats already high expectations
• Nikkei Futures point to a higher open; expect domestic market to on semicon names
• Inflation expectations are on the rise in Japan. Honda announces largest wage increase since 1989

• 1211 HK: BYD’s battery subsidiary FinDreams signed a lithium iron phosphate battery production agreement with Borg Warner (+)
• 1810 HK: OPPO AI strategic press conference officially announced to be held on February 20, dubbed as ‘Opening the era of AI phones for all’ (-)
• BEKE: Real Estate Industry: Existing home sales increased 70% yoy in CNY holiday(+)

• NTES/700 HK: Tencent’s <Dream Star> didn’t perform as well as NetEase’s <Eggy Party> during the Spring Festival.(+/-)
• PDD/AMZN/SHEIN: Temu search queries pass SHEIN after running Super Bowl ads (+/-/-)
• ZTO/1519 HK/PDD/BABA: Parcel volume delivery increased ~31% during the Spring Festival period (+)

• Lattice is just too expensive for what it is. It’s one of the highest multiples in the space, but I acknowledge we are closer to the trough than the peak.

• Tokyo Electron continues to be bullish high aspect etch and reports that they are winning in DRAM and hopefully in NAND in the future.

• Arista says that AI revenue is yet to come, and 800G will mostly be in 2025, not 2024. The market got ahead of itself.

• US Stocks closed lower on Tuesday. Tech-heavy Nasdaq fell almost 1%; all eyes on Nvidia, which reports post close
• Nvidia expected to report revenue of $20.4 billion, up +236% YoY, with EPS coming in at $4.60/shr.
• Nikkei Futures point to weaker open; expect directionless trading; Japanese companies benefit from strong demand in China for SPE equipment and global demand for hybrid autos

• Intel is hosting an IFs day event next week dedicated to their foundry services
• Historical data suggests that companies should exit the foundry business if revenue falls below a certain threshold
• TSMC, Intel, and Samsung are the only companies currently competing in the foundry space, with TSMC leading the pack in revenue generation

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

• Japanese beer has long been famous for quality and quantity and today its top brands are major exports.
• At home, however, the pandemic worsened a long-term decline in beer consumption (as well as wine and sake) as younger consumers switch to stronger drinks.
• Unit sales have shrunk but alcohol per unit has soared as sales of highballs and Chuhai boom, forcing change on Japan’s biggest beverage businesses like Kirin, Suntory, Sapporo and Asahi.

• Cannabis stocks sold off for the second straight week. The US cannabis MSOS ETF lost 6.44%, while the global YOLO ETF fell 15.19%.
• In the absence of meaningful news, we saw profit taking while we wait for earnings and news from the DEA.
• This week, MSOS had $15,088,000 in inflows. So far in February, total inflows have been $91,345,550, which is $8,304,140 on average per trading session.

• January 2024 retail sales in the furniture and furnishings stores looked ugly, down 9.8% versus January 2023.
• Sequentially, the data shows sales continue to scrape along the bottom.
• Furniture and furnishings retail sales rose ~1.8% versus December and were the highest since July.