Thematic (Sector/Industry)

Overseas: SPX flat , Nasdaq -0.3%; Treasury yields resumed rise on stronger-than-expected retail sales
Today: NKY Futs +0.3% v cash. JPY 249.8; Keisei Electric Rail attracts activist interest; SONY/Honda unveil new EV
JapanX: Nidec Powering the Future of Urban Air Mobility; perhaps a new growth driver to think about

Japan’s Department Stores: Elitism Rules and There’s Profit in It

By Michael Causton

While big city department stores have only lost 12.8% of sales since 2009, regional stores have lost 45%, emphasising how wide the gap in performance has become.
But Japan is also witnessing the emergence of a new elite group of department stores who are far ahead even of their big city peers.
This elite group have found more traction among the new wealthy and affluent city dwellers and growth is set to continue, with record sales and – especially – profit.

Weekly Sustainable Investing Surveyor Week Ended October 13, 2023

The WTR Sustainable Index fell by 1.1% W/W versus the S&P 500 Index (up 0.4%), the Russell 2000 Index (down 1.5%), and the Nasdaq Index (up 0.1%).
Energy Technology (13.8% of the index) was up by 1.3%, while Industrial Climate and Ag Technology (48.4% of the index) was down 1.7%, ClimateTech Mining was up 0.5%, and Advanced Transportation Solutions was down 1.7%.
Revolve Renewable Power is an owner, operator, and developer of renewable energy projects focused on the North American market.

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Oct 17

Daily Brief Thematic (Sector/Industry): Semiconductor Events Deserving Your Attention @16/10/23 and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Semiconductor Events Deserving Your Attention @16/10/23
Ohayo Japan | Index Finishes Higher, Led by Tech; Honda/MitCorp Vision for Clean Energy
Solving the 2024 Logistics Problem Key to Japan Consumer Market Efficiency
Lessons from History: The Rise and Fall of the Telecom Bubble
Furniture/Furnishings Weekly – Gray Skies over High Point; Cloudy Conditions for Industry
The Highlights – Cannabis News for the Week Ending October 13, 2023

Semiconductor Events Deserving Your Attention @16/10/23

By William Keating

Samsung’s pre-earnings release indicates revenue increased 11.6% QoQ and operating profit has increased almost 4x QoQ.
According to Garner, Q323 PC unit shipments rose 7.7% QoQ. While this is the second such quarter of sequential growth, shipments in the third quarter were still down 9% YoY
ASPEED’s monthly revenue grew 32% sequentially in September. After 8 months of flat to no growth, this marks a clear turn around in the server market.

Ohayo Japan | Index Finishes Higher, Led by Tech; Honda/MitCorp Vision for Clean Energy

Overseas: SPX +1%, Nasdaq +1%; Stock rally was broad-based; energy lagged on lower oil price.
Today: NKY Futs +1% vs cash. JPY 149.5; MHI demonstration plant for CO2 liquification; Uniqlo raises salaries in China
JapanX: Beyond the Road: Honda and Mitsubishi’s Vision for Clean Energy

Solving the 2024 Logistics Problem Key to Japan Consumer Market Efficiency

By Michael Causton

The so-called 2024 problem will cause significant disruption to logistics in Japan, including potentially higher costs for major firms like Yamato and Sagawa.
Already, companies that move product by road, and particularly those working in e-commerce, are working hard to come up with solutions to reduce the impact of the new rules.
For the better-resourced businesses, this could lead to more efficient supply-chains in the long run, creating more efficiencies within Japanese consumer markets.

Lessons from History: The Rise and Fall of the Telecom Bubble

By Douglas O’Laughlin

The Internet and Telecom bubble. Lessons in leverage, rates, and a smattering of fraud. What can we learn from that period to compare it to the current AI infrastructure build?
It’s time for a history piece. I didn’t touch the internet and telecom bubbles in my last history piece, but I wanted to save an entire piece for it.
I think it’s the best analogy for the historic boom in AI and infrastructure. Let’s see if there are lessons to learn from the past.

Furniture/Furnishings Weekly – Gray Skies over High Point; Cloudy Conditions for Industry

The Fall Furniture Market in High Point, N.C. brought the industry together last week to do business, celebrate successes, and commiserate.
We spent the day Saturday, the official opening day, while buyers and vendors had been there since the prior Tuesday.
The sky over High Point was gray and wet. So was the mood.

The Highlights – Cannabis News for the Week Ending October 13, 2023

Despite the turmoil in the Middle East, the MSCI World Index gained 0.36%, while the S&P 500 rose 0.94%.
The Russell 2000 underperformed again, losing 1.58%, while the NASDAQ climbed 2.35%. YTD, the Russell 2000 is -2.35%, the S&P 500 is +12.83, and NASDAQ is +28.10%.
This is surprising, as small caps typically lead off a bear market bottom. However, during this cycle, large tech is leading the way.

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Oct 16

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Markets Wary of Conflict; Toyota and Idemitsu Partner on Solid-State Batteries and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan | Markets Wary of Conflict; Toyota and Idemitsu Partner on Solid-State Batteries
What Is Holding Back China Consumers’ Potential?
GLP-1 Drugs – Are They Dessert or Time Bomb to Your Portfolio?
China Weekly Economic Wrap 10-15-2023

Ohayo Japan | Markets Wary of Conflict; Toyota and Idemitsu Partner on Solid-State Batteries

Overseas: U.S. equities declined on Friday due to escalating conflict in the Middle East, leading to higher oil prices and a flight to safety assets like bonds and gold.
Today: Lawson increases dividend due to strong domestic business. Daikin eyes European heat pump market. Mazda targets EV expansion in the US.
JapanX: Toyota and Idemitsu Partner to Revolutionize EVs with Solid-State Batteries

What Is Holding Back China Consumers’ Potential?

By Eric Chen

The vast majority of under-educated Chinese in less-developed regions are largely irrelevant to the China consumer market as investors and analysts know it.
That is why that simple benchmarking with developed markets on per capita basis almost always results in forecasts that prove too optimistic in hindsight.
They risk being further left behind as technology advancements and economic transformation may block the path for their income growth and hence derail consumption upgrade.

GLP-1 Drugs – Are They Dessert or Time Bomb to Your Portfolio?

By Xinyao (Criss) Wang

The potential/market size of GLP-1 drugs is much greater-than-expected. Indication expansion could easily generate big returns. Investment strategy for GLP-1 drugs should be long-term, which is expected to bring alpha.
Supply-Demand relationship of entire market would change due to popularization of GLP-1 drugs.This is not only for healthcare, but also cause a change in the investment logic of other industries.
It’s recommended to re-examine stock positions in portfolio. Because each indication expansion of GLP-1 drugs would mean a decrease in demand in another field, leading to potential stock price plummet.

China Weekly Economic Wrap 10-15-2023

By Fern Wang

Country Garden default warning, Huijin’s Big 4 investments, Regulators reined in offshore new brokerage accounts, PBOC roles fine-tuned
China tightened rules on security lending to boost confidence of investors
September China Import/Export data continued to decline and Government bond issuance continued to support ASF growth

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Oct 15

Daily Brief Thematic (Sector/Industry): China TMT Update-Oct.14-3690.HK/BABA/JD/DADA/DDL/9699.HK/Kanzhun/700.HK/CPNG:Douyin 1-Hr Delivery and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

China TMT Update-Oct.14-3690.HK/BABA/JD/DADA/DDL/9699.HK/Kanzhun/700.HK/CPNG:Douyin 1-Hr Delivery

China TMT Update-Oct.14-3690.HK/BABA/JD/DADA/DDL/9699.HK/Kanzhun/700.HK/CPNG:Douyin 1-Hr Delivery

3690.HK/BABA/JD/DADA/DDL/9699.HK: Douyin adds a more prominent entrance for its 1-hr delivery supermarket feature (-/-/-/-/+)
Kanzhun Limited: No signal for rebound in job market in China yet
700 HK： QQ Browser today announced the launch of the “PDF Reading Assistant” , which uses Tencent’s own LLM Hunyuan to assist users.（/）

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Oct 14

Daily Brief Thematic (Sector/Industry): Japan Weekly | Lasertec and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Japan Weekly | Lasertec, Fast Retailing, Monotaro, Topcon

Japan Weekly | Lasertec, Fast Retailing, Monotaro, Topcon

Market Watch: This week, the Topix Index gained 44pts (2%) to close at 2,309, influenced by Wall Street’s response to US inflation data and expectations of extended elevated interest rates.
Major Movers: Lasertec (6920) surged +17%, Fast Retailing (9983) rose +12%, and Monotaro (3064) declined -18%
Activist Watch: ValueAct lifted its stake in Topcon. I like the LT fundamentals for the company and look forward to positive dialogue with the activist

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Oct 13

Daily Brief Thematic (Sector/Industry): Are Semiconductors Finally Recovering? and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Are Semiconductors Finally Recovering?
Ohayo Japan | US Consumer Prices Surprise Again; Toyota’s Lunar Cruiser Showcases Innovation
China Property Developers In Distress – Weekly News & Announcements Tracker | 6-12 October 2023
China TMT Update-Oct.13-KE/FUTU/BABA- Beike Acquires “iKongjian”/Futu Japan MAU/Lazada Waived Fees

Are Semiconductors Finally Recovering?

By Jim Handy

There are signs of a recovery in the chip sector
Memory spot prices are up, and revenues have risen for six consecutive months
Growth is higher than average, indicating the start of another super-cycle

Ohayo Japan | US Consumer Prices Surprise Again; Toyota’s Lunar Cruiser Showcases Innovation

Overseas: SPX -0.6% , Nasdaq -0.4%; Concerns again as bond yields rise on higher than expected consumer inflation
Today: NKY Futs v cash -0.7%, JPY149.8/$; Surprisingly strong outlook at Uniqlo; Toyota to work with Idemitsu on Solid State Batteries
JapanX: Toyota’s partnership with JAXA holds potential benefits for terrestrial challenges.

China Property Developers In Distress – Weekly News & Announcements Tracker | 6-12 October 2023

By Robert Ciemniak

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

China TMT Update-Oct.13-KE/FUTU/BABA- Beike Acquires “iKongjian”/Futu Japan MAU/Lazada Waived Fees

KE Holdings Inc: Beike is going to acquire the home renovation company “iKongjian” on RMB1.55bn
Futu Holdings: Futu Japan app’s MAU increase rapidly, then monetization pace is the key
BABA： Alibaba’s Lazada waived seller fees to take back merchants from TikTok Shop（+）

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Oct 12

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Stocks Higher Again Ahead of Inflation Data; Why TSMC Chose Japan as a Place to Invest and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan | Stocks Higher Again Ahead of Inflation Data; Why TSMC Chose Japan as a Place to Invest
China TMT Update Oct.12-Pdd/Baba/4385jp/BABA/LI/NIO/XPEV-TikTok Shop US/Taobao Management Change
[Blue Lotus Internet Sector Update]: Increasing Marginalization of Middle-Sized Companies
CHina TMT Update Oct.12-Pt.2-BABA/BILI/U:：Taobao Upgrades Membership/Bilibili Aims to Double DAU

Ohayo Japan | Stocks Higher Again Ahead of Inflation Data; Why TSMC Chose Japan as a Place to Invest

Overseas: SPX +0.4% , Nasdaq +0.7%; Exxon Mobil to buy Pioneer Natural Resources for $60b: Birkenstock slumps 12% on debut.
Today: NKY Futs v cash +0.3%. JPY 149/$; Surge in profits at ABC Mart and Bic Camera
JapanX: Why TSMC Chose Japan as a place to invest…it wasn’t just the subsidies

China TMT Update Oct.12-Pdd/Baba/4385jp/BABA/LI/NIO/XPEV-TikTok Shop US/Taobao Management Change

PDD/BABA/4385JP：TikTok Shop US opened up, initial target categories in Mercari, ETSY and eBay（/）
BABA ：rumor says Taobao/Tmall looking to shuffle CEO（ / ）
LI/NIO/XPEV: AITO’s sales performance during the National Day holiday see good performance（-）

[Blue Lotus Internet Sector Update]: Increasing Marginalization of Middle-Sized Companies

We view the recent cooperation between Alimama and Tencent a true change that both parties need to enter a new paradigm of business priorities in China Internet;
Middle-Sized social/video companies like Kuaishou and Bilibili have historically exploited the disconnect between Alibaba’s e-commerce merchandise shelf and Tencent’s advertising inventory. This opportunity is diminishing;
We raised Tencent’s TP by 4% to HK$417 while keeping Alibaba unchanged. We cut Kuaishou and Bilibili’s TP by 8% and 3% and maintain SELL.

CHina TMT Update Oct.12-Pt.2-BABA/BILI/U:：Taobao Upgrades Membership/Bilibili Aims to Double DAU

BABA：Taobao upgrades its membership program in preparation for 11.11（ / ）
BILI: Bilibili Reiterates User Growth Goal: Doubling Mobile DAU( / )
U: Unity CEO Resigns After the Runtime Fees Incident ( + )

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Oct 11

Daily Brief Thematic (Sector/Industry): Ohayo Japan | SPX +0.5%; Pause in Rates; Son Tells Japan to Embrace AI and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan | SPX +0.5%; Pause in Rates; Son Tells Japan to Embrace AI
Samsung and SK Hynix China Factories Win U.S. Waivers

Ohayo Japan | SPX +0.5%; Pause in Rates; Son Tells Japan to Embrace AI

OVERNIGHT: The S&P 500 rose for a third consecutive day, buoyed by Amazon’s Prime subscriber sale and a bullish forecast from PepsiCo.
TODAY: Mitsubishi Elec/Denso to invest $1b in Coherent’s SIC business; SONY PS Slim
JAPAN X: According to Masayoshi Son, AI is not the enemy but a friend and partner in propelling Japan forward.

Samsung and SK Hynix China Factories Win U.S. Waivers

By Caixin Global

The U.S. cleared Samsung Electronics Co. and SK Hynix Inc. to supply U.S. chip equipment to their China factories without a separate approval process, South Korea’s presidential office said Monday.
The two South Korean companies received notification that the decision takes effect immediately, South Korea’s presidential economic adviser Choi Sang-mok told reporters Monday at a briefing, according to the Yonhap News Agency.
SK Hynix and Samsung both have major production operations in China, where imports of advanced semiconductor manufacturing equipment and high-performance graphics processing units (GPUs) from the U.S. have been limited under sweeping restrictions rolled out by the Biden administration last October.

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Oct 10

Daily Brief Thematic (Sector/Industry): Ohayo Japan: Stocks Ignore Conflict; Japan’s Used Car Sales to Russia Hit the Brakes and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan: Stocks Ignore Conflict; Japan’s Used Car Sales to Russia Hit the Brakes
US – Fed Liquidity Moves USD147bn Lower In Past 3 Weeks, Pace Is Accelerating
Luxury Goods – What Makes a Brand Unique?
China TMT Update-Oct.10-Baba/LI/NIO/XPEV/Tencent/NetEase-Huawei Wenjie’s New M7/New Taobao Rules
Cannabis News for the Week Ending October 6, 2023

Ohayo Japan: Stocks Ignore Conflict; Japan’s Used Car Sales to Russia Hit the Brakes

Overnight: S&P gained 0.6% as market shook off initial concerns over conflict in Middle East. Bond market closed; Oil +4%
Japan: BlackRock, the world’s largest asset manager, is looking to collaborate with Japanese businesses to invest in decarbonization technology.
JapanX: Japan has recently imposed strict restrictions on its used car sales to Russia, significantly impacting a thriving trade worth nearly $2 billion annually

US – Fed Liquidity Moves USD147bn Lower In Past 3 Weeks, Pace Is Accelerating

By Daniel Tabbush

US Federal Reserve Bank balance sheets are released weekly and more current than commercial banks. Latest Fed B/S is for 4 October, shows -USD47bn WoW in loans, securities, repos.
Liquidity conditions in the US banking system are becoming tighter faster, with the most recent week showing loans, securities, repos at -9.4% YoY vs -8.3% four weeks ago.
With tighter liquidity we should expect less loan growth, but also more difficult conditions for cash-strapped companies, prompting more defaults, and higher credit costs at banks.

Luxury Goods – What Makes a Brand Unique?

By Alexis Dwek

Why do certain brands like LV, Hermes and Cartier keep on delivering extraordinary results?
Which luxury brands will be able to continue to raise their prices well above inflation in the medium and long term?
If you don’t have a story for your brand, what is your brand worth?

China TMT Update-Oct.10-Baba/LI/NIO/XPEV/Tencent/NetEase-Huawei Wenjie’s New M7/New Taobao Rules

BABA：SME merchants benefited from new Taobao rules ( + )
LI/NIO/XPEV: The cumulative large deposit order volume of Wenjie’s new M7 has exceeded 50,000 units(-)
Gaming Industry: August Market Sustains Ongoing Recovery with Impressive 46% YoY Growth in Domestic Market(+)

Cannabis News for the Week Ending October 6, 2023