Thematic (Sector/Industry)

• Lacklustre numbers for both Dell and HP show tapering demand for PC’s.
• Keisei Electric Rail snubbing Murakami with another 1% Oriental Land sale?
• Nikon analysts meeting does little to clarify the intentions of EssilorLuxottic’s 8.45% stake.

• U.S. stocks surged on Tuesday, undeterred by President-elect Donald Trump’s tariff warnings aimed at China, Canada, and Mexico. The S&P 500 increased by 0.6% – a record close
• Japanese firms on the TSE are set to distribute around $53 billion in dividends to shareholders by December, which could potentially elevate stock prices as these funds are reinvested.
• Japanese PM Shigeru Ishiba urges companies to propose significant wage hikes during labor talks to address rising costs and increasing welfare expenditure pressures.

• 3690 HK: China Cyberspace Administration Launches Initiative to Address Algorithm Issues(/)
• BABA US/PDD US/JD US: Alibaba integrates its domestic and international e-commerce business under Jiang Fan (+/-/-)
• TCOM US: China Implements Visa-Free Entry for Citizens from Japan and 8 Other Countries, Extends Stay Duration to 30 Days (+)

• TSLA US: Model Y Price Reduced by RMB 10,000 In December (-)
• LKNCY US :  Starbucks Considers Selling Its China Business. (+)
• ZTO US: Parcel volume delivery grew 33.6% yoy in the prior week (+)

• India’s quick commerce sector is rapidly growing, with a 2024 market value of $3.34 billion  
• The report deep dives into How quick commerce is shaping grocery landscape in India
• This will also take you through how its impacting FMCG companies.

• We review last week’s biopharma news for meaningful clinical data, regulatory updates, research innovation, and M&A.
• Last week, the CDC and CMS picks aligned with President- elect Donald Trump’s agenda, while the FDA choice felt like a compromise.
• NTLA had competitive biomarker data in ATTR-CM but was still behind ALNY and BBIO (approved late Friday). 

• As earnings season drew to a close, it was the Home Goods Retailers, led by WSM, that grabbed investors’ attention.
• The Water Tower Research Commercial/Contract Furniture Index was up 2.2%, the Residential Manufacturers & Suppliers Index was up 0.7%, the Home Goods Retailers Index was up 16.5%, and the Mass Retailers Index was down 0.1% for the week.
• The S&P 500 and DJ30 were both up 1.3%, while the R2K was up 4.3%.

• Markets rallied as traders welcomed Donald Trump’s nomination of hedge fund veteran Scott Bessent for Treasury Secretary
• Elliott Management, an activist shareholder, has reportedly sold its stake in DNP
• Fast Retailing reaffirms its commitment to China, despite global decoupling trends.

• Tech strong despite market rotating out of NVDA, with EV related gaining on Cali plan.
• Home builders surge on Bessent’s nomination; expect a strong follow through for JP related plays.
• Activists are on the hunt in Japan – how long before someone starts building a stake in Kyocera?

• Overall, the outlook for corporate earnings in India remains challenging, with downward revisions in key financial metrics and sectors. 
• The weak performance in Q2 highlights the impact of various economic factors on company profits. Some positive signs such as expected govt spending & improved rural demand, could boost H1FY25
• The current valuation of the Nifty and broader market suggests that there may be limited upside potential in the near term.

• The NDA’s landslide victory in Maharashtra has ushered in a period of political stability, boosting market sentiment and investor confidence. This will increase government spending on infrastructure & rural development.
• Analysts predict a modest recovery in corporate earnings in the second half of the fiscal year, potentially triggering a “mini risk-on rally”. 
• While women-centric welfare schemes contributed to the NDA’s success, concerns arise regarding their potential strain on state finances. 

• We highlight 10 stocks in China that look interesting to us based on our FVMR Methodology
• Portfolio changes: Three stocks remain, seven new join the fray
• Since inception, it has gained 172% versus the CSI 300 Index’s return of 62%

• Overall, the declining HHI across various investor categories in the Indian securities market indicates a positive trend towards diversification and broader exposure. 
• This shift towards mid- and small-cap stocks suggests that investors are seeking growth opportunities amidst high market valuations. 
• The net outflows from FPIs, particularly concentrated in the top 100 stocks, indicate a shift in investment focus towards smaller companies. While sectoral analysis reveals disparities in concentration.

• 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
• Since inception, it has gained 126% versus the SET 100 Index’s return of 34%

• Higher Exchanges is a weekly cannabis-investing conversation hosted by WTR’s Head of Cannabis, Jesse Redmond, and Morgan Paxhia, co- founder of Poseidon.
• Those interested can listen to the podcast on Apple Podcasts, Spotify, or X Spaces.
• This week’s podcast began with an analysis of Green Thumb Industries’ (CSE: GTII, OTCQX: GTBIF) investment and transformation of Agrify (NASDAQ: AGFY). 

• US stocks closed near session highs on Friday, with the Dow Jones surging over 400 points
• Japan has set a new target to reduce greenhouse gas emissions by 60% by 2035, up from the current 46% reduction goal by 2030.
• Seven & i Holdings’ founding Ito family is exploring a potential takeover of the retail group, approaching US private equity investors for support

• SMCI +11.6% has continued to surge higher lifting server related plays.
• Kirin’s partial sale of Kyowa Hakko Bio unlikely to met with much enthusiasm.
• Will a future test-time growth trajectory slowdown for Advantest dampen sentiment?

• Earnings surpassed consensus expectations providing no pullback to allow entry
• Most operating metrics improved and all trends are goign in the right direction
• Capital management is top of mind for management with a common thread of increasing ROEs and PBRs

• Samsung Biologics signs manufacturing deals worth over $668M with European pharmaceutical company. Celltrion is acquiring iQone Healthcare, a specialty pharmaceutical distribution company in Switzerland. Kyowa Kirin collaborates for leukemia drug.
• Takeda launched Hutchmed’s colorectal cancer drug Fruzaqla in Japan. FDA has turned down Astellas Pharma’s application for label update of geographic atrophy drug Izervay. Lunit is partnering with AstraZeneca.
• Yuhan is one step ahead for European approval of Leclaza. HK inno.N signs domestic supply contract for Roche’s influenza treatment, Tamiflu. Beigene settles litigation against generic filer of Brukinsa.

• Big Tech companies are already generating significant revenue from AI. Microsoft expects to reach $10 billion in AI revenue by the next quarter, making it their fastest-growing area.
• In the third quarter of 2024 alone Microsoft, Google, and Meta collectively spent over $42 billion on AI infrastructure, primarily on building data centers and purchasing computing equipment.
• Companies are projecting continued high spending on AI into 2025 to meet growing demand. However, challenges remain, including supply constraints for AI chips

• India is experiencing a slowdown in capital expenditure (capex), both in the government and private sectors. This slowdown, largely attributed to the general elections in the Q1 of FY25.
• The central government has set an ambitious target of 50.5% capex growth in the second half of FY25 to compensate for the sluggish first half.
• The capex slowdown has resulted in reduced investment in crucial infrastructure projects, impacting key sectors such as defense, roads, and railways.

• Singapore domestic credit growth is expanding upward over several months, where there are positive implications for net interest income growth
• Growth of local loans was negative YoY in past months last year, so the delta pick up of net interest income can be strong
• Accelerating growth likely means better credit metrics, and this is what MAS data shows too; this means that credit costs can come in, improving profit growth

• The Japanese stock market experienced a lacklustre week, with the Nikkei 225 and Topix indexes closing lower by 0.9% and 0.6%, respectively
• Kadokawa’s stock surged 42% this week following a Reuters’ report that Sony is in advanced talks to acquire the company
• Tokyo Gas shares rose 19% after Elliott Investment Management disclosed a 5.03% stake in the company

• ADX Energy (ADX AU) C : Portion of deeper target at Welchau flows water on test – Two intervals (total of ~16 m) in the Steinalm formation were tested at a stable rate (natural flow) of 240-290 bbl/d of drilling mud, likely contaminated formation water and some oil traces.
• Gas was initially observed at surface. While the achieved flow rate highlights the high permeability of the natural fractures, the absence of hydrocarbons is disappointing and surprising given the results of the logs, the inflow of gas while drilling, the analysis of the retrieved cores (with indication of hydrocarbons) and the fact that oil samples were recovered from this interval.
• The well is now being flowed while ADX is running a downhole production logging tool to analyse the contribution of the various sections of the well to flow. 

• Total public EV charging stations (incl. temporary unavailable locations) were 73,535 as of October 30, 2024. Compared to the end of FY23, it is an increase of 13.8%.
• Total EVSE charging ports (including the temporary unavailable ports) were 202,179, up nearly 20.1% compared to the end of 2023 and up 2.6% over September 2024.
• US considerably lags behind China which had 3.39 million public charging stations at the end of October 2024.

• U.S. markets advanced Thursday, with the Dow Jones Industrial Average leading gains, rising 1.1%
• Honda Motor will begin test production of all solid-state EV batteries in January at a new facility in Tochigi prefecture,
• Nissan Motor  plans to restructure its Thai operations by fall 2025, affecting around 1,000 employees at its two Bangkok-area plants.

• Sentiment for AI related rising with NVDA de-risked and outlook strong, despite the marginal beat.
• Kioxia IPO pricing at $4.84bn supportive for memory ecosystem names.
• Deere numbers and outlook for farming lifting AG machinery names – watch Kubota.

• Trump’s new policy on renewables could have significant implications for Indian renewable players, particularly those who heavily rely on exports to the US market.
• The potential rollback of the Inflation Reduction Act and the imposition of trade barriers and tariffs could lead to a decrease in demand for Indian solar modules in the US
• Waaree Energies, Adani Enterprises, and Vikram Solar, which have a high concentration of exports in their overall revenue, are likely to be the most affected

• 1211 HK/TSLA US/1810 HK/NIO US/LI US/XPEV US/ZK US/9863 HK:In the 46th week of 2024, market demand is booming and new brands gain market share.(///////////////)
• XPEV US: Xpeng’s vehicle revenue and gross profit margin exceeded expectations in the third quarter, but service revenue was lower than expected, resulting in lower-than-expected profits.(/)
• LKNCY US: Luckin Signs Memorandum for Brazilian Coffee Bean Purchases.(+)

• Gaming Sector Update/NTES US: NPPA Releases November Domestic and Imported Game Approvals(+)
• 3690 HK/Douyin:Douyin Local Life’s Double 11 Sales Increase by 53% YoY, Indicating Rising Consumer Spending in China, Bodes Well for Meituan.(+)
• BABA US/PDD US/JD US: Taobao/Tmall launches “Go Bargain” feature (+/+/+)

• AI Continues to Grab Investor Interest as Expectations Have It Affecting Nearly Everything AI is in every company now.
• It has been having a major impact on the tech sector for some time, it accelerated in 2024, and is likely to continue driving tech in 2025.
• Every company is now building neutral networks, and this is driving growth in data centers, hardware, and specifically GFP/AI chips. 

• The S&P 500 and Nasdaq 100 ended little changed, recovering from earlier losses following Ukraine’s missile strikes on Russia
• Nvidia delivered stronger-than-expected third-quarter results, with EPS of $0.81 on $35.1 billion in revenue
• Rapidus: The Japanese government plans to invest 200 billion yen in Rapidus to support cutting-edge chip production, with total funding needs of 5 trillion yen

• SEBI is proposing significant changes to the SME IPO framework, including increasing the minimum application size, restricting the OFS component, and introducing a monitoring agency.
• SEBI proposes changes in  the allocation methodology for non-institutional investors, increasing the minimum number of allottees in an SME public issue, and introducing a mandatory profitability benchmark for companies
• The proposed changes aim to address concerns regarding investor protection and market integrity in the SME segment. 

• NVDA slight beat not enough to appease market, but strong AI outlook is positive.
• Timing may be right to look at names like TEL and Disco again now NVDA de-risked
• Qualcomm down after its IR day and concerns its future focus on Autos and IoT wont replace Apple.

• CSRC’s Market Value Management Guidelines will indirectly benefit the H-share stocks with their A-share counterparts with a P/B of below 1x.  
• Chinese banks dominated the list with below-book A-shares. China Everbright Bank (6818 HK), China Citic Bank H (998 HK), and ICBC (H) (1398 HK) are the prime beneficiaries.
• Infrastructure construction companies China Railway Cons Corp (1186 HK), China Railway Group H (390 HK), and China Comm Cons (1800 HK) are also well-positioned to gain.

• Revenues of $7.05 billion were marginally higher than midpoint of $6.93 billion, up 4% QoQ and up 5% YoY.  Guided current quarter at $7.15 billion +1.5% QoQ , +10.5% YoY
• Most WFE share prices have retreated to early 2022 levels, matching with when annual revenues first exceeded the $100 billion level
• After a 44% growth spurt in 2021, we have had three years with mostly no growth. We expect the same in 2025. Invest accordingly

• SEBI’s study reveals rising royalty payments by listed companies to related parties, highlighting doubling of payments to Rs. 10,779 crore in FY23 over a decade.
• 25% of firms pay royalties exceeding 20% of net profits, raising concerns about transparency, governance, and shareholder returns versus royalty prioritization.
• SEBI’s findings stress the urgency for enhanced royalty disclosures, policy revisions, and better scrutiny to protect minority shareholders and corporate governance standards.

• US stocks rallied on Tuesday, with the Nasdaq climbing 1%, bolstered by Nvidia’s nearly 5% surge ahead of earnings
• ASICS has significantly upgraded its medium-term management plan, raising the operating income target from ¥80 billion to ¥130 billion by December 2026
• Elliott Management, a US activist hedge fund, has acquired over 5% of Tokyo Gas shares, signaling potential discussions about the company’s asset portfolio

• The NIFTY Index (NIFTY INDEX) has witnessed a significant decline, falling below its 200-DMA, a key technical indicator, for the first time since April 2023.
• Historical analysis reveals that Nifty has traded below this level approximately 30% of the time since 1996, suggesting that this occurrence is not as unusual as it might initially seem.
• While short-term market volatility is anticipated, historical data demonstrates that the Nifty has generally recovered strongly over longer timeframes following similar dips below its 200-DMA.

• NTES US: <Eggy Party> Launches on Nintendo Switch today (+)
• JD US/BABA US/PDD US/VIPS US/3690 HK: NBS publishes social retail consumption data for October 2024 (+/+/////-)
• JD US:JD.com Launches “On-Demand Delivery Flagship Stores” for Its On-Demand Retail Business (+)

• SMCI +32% as it staves off delisting continues to set a positive tone for Nidec
• Sony reportedly looking to fully acquire Kadokawa points to more downside for Bandai Namco
• Highlights relative cheapness for Japanese game stocks as take-over targets

• There are more ‘less negative’ signs in the latest data for October/November sales, especially in the weekly data
• The policy measures for property, perceived broadly as rather underwhelming, suggest the goal of ‘stabilizing it’ remains clear, with caution about the excessive support for the sector 
• In this note, we summarize where things stand with China housing – looking at home sales, prices, inventory, land, major cities, and the policy over the past few months

• 300750 CH/1211 HK/ JKS US/601012 CH/688599 CH/002459 CH:China cancels and reduces export tax rebate for certain China’s advantageous products, forcing production capacity to be rationalize and export prices to rise.(///////////)
• 1810 HK/LI US/NIO US/XPEV US: It is said that Geely Group is preparing to merge its hybrid and pure electric brands under Zeekr（///////）
• BEKE US:Mid-November Home Transaction Growth Remains Strong in First-Tier Cities, While Growth in Second- and Third-Tier Cities Slows Down (+)

• The pace of recovery in 200 millimeters appears to have been very weak. Customers continue to respect LTA prices but we have to push out delivery timing which impacts volumes.
• China appears to have developed their own capability to fabricate wafers. Quality does not necessarily appear to be very good but there is strong pressure to comply with “Buy China” 
• The recovery in legacy applications has been surprisingly slow. At this stage we don’t know whether it is a slow recovery or in fact that there won’t be a recovery.

• The return of Donald Trump to the global trade landscape brings uncertainty and potential disruption, particularly for countries like China with high trade exposure to the US
• India, on the other hand, appears to be in a more insulated position, with lower trade dependence and stable fundamentals
• Overall, the trade dynamics between the US, China, and India will continue to evolve, shaping the future of the global economy.

• US stocks ended mixed as tech shares led a modest rebound, with Tesla surging over 5% following reports that Trump’s incoming administration may ease self-driving vehicle regulations.
• Investors are now focused on Nvidia’s upcoming earnings report Wednesday as a key test for AI-related stocks, which have been crucial drivers of market gains over the past year.
• The Japan Tourism Agency is proposing to eliminate the ¥500,000 daily cap on tax-free purchases for foreign tourists in its fiscal 2025 tax reforms

• Nidec may be back in focus on a lifeline for SMCI and heating issues for NVDA.
• Tesla and power-semis are both up on the self-driving U-turn.
• No bid for JP SPE’s recently, although Lasertec may still have further to fall.

• The WTR Sustainable Index was down 4.5% W/W versus the S&P 500 Index (down 2.1%), the cex (down 4.0%) and the Nasdaq Index (up 5.7%).
• Energy Technology (13.5% of the index) was down 1.6%, while Industrial Climate and Ag Technology (48.3% of the index) was down 3.8%, ClimateTech Mining was down 3.4%, and Advanced Transportation Solutions (20.6% of index) was down 5.5%.
• Top 10 Performers: GRB, BE, WKHS, MULN, LILM, HLGN, FGPHF, AMPS, NEOV, NOVA

• WTR-CMI last week. After the momentous US election, the stock market has rallied on expectations of lower regulations, lower taxes, and a more confrontational approach to China and other geopolitical adversaries.
• Last week saw some profit taking across the market, with the Russell 2000, which we view as a better proxy for the broader market, declining 4%, with the large- cap, tech-heavy S&P 500 posting a 2.1% decline.
• Our WTR-CMI Index of 30 specialty chemicals and materials companies fared similarly, losing 2.2% of its value. 

• We review last week’s biopharma news for meaningful clinical data, regulatory updates, research innovation, and M&A.
• Last week, Trump named RFK Jr. to lead the HHS, placing an overhang on XBI and vaccine makers PFE, GSK, MRNA, MRK, and SNY. BNTX and MRK made moves in the PD- 1/VEGF space.
• ABBV’s costly neuro play failed, removing the main threat to BMY’s Cobenfy. AMGN was rattled by bone loss data for its obesity drug. 

• Furniture and furnishing stocks retrenched last week, in line with the broader market.
• The Water Tower Research Commercial/Contract Furniture Index declined 3.1%, the Residential Manufacturers & Suppliers Index dipped 3.0%, the Home Goods Retailers Index fell 1.0%, while the Mass Retailers Index was down 1.3%.
• The S&P 500 and DJ30 were both down 2.2% during the week, while the R2K declined 5.5%. 

• Interview with digital advertising expert Eric Suffert discussing Apple’s app tracking transparency and its impact on digital advertising
• Exploring the historical paradigms of data flow in digital advertising before and after the implementation of ATT
• Examining the hub and spoke model and the mutual benefits for advertisers and platforms like Facebook in the previous paradigm

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• US stocks plummeted on Friday, with the S&P 500 dropping 1.3% and the Nasdaq Composite falling 2.2%.
• Investors face a sparse economic calendar next week, with Nvidia’s quarterly earnings taking center stage
• Sony Honda Mobility will showcase its luxury electric vehicle, AFEELA, at CES 2025 in Las Vegas.

• Our list of HK-listed industrial companies indicated that the US generated an average of 22.9% of sales. With diversified production bases, higher tariffs may only affect ~10% of revenue.
• Vesync (2148 HK), Chervon Holdings (2285 HK), and AAC Technologies Holdings (2018 HK) are more exposed given their significant US sales yet most production is still in China. 
• While the US generated over 50% of the revenue of Techtronic Industries (669 HK) and Nexteer Automotive (1316 HK), they are less exposed given their worldwide manufacturing presence. 

• AMAT numbers sends US SPE lower on Friday which should spill over into Japan.
• Trump’s Energy Secretary nomination may be a short term positive for oil and gas related, longer-term questionable.
• Both Ibiden and Renesas have potential to be rerated on their NVDA exposure, but market indifferent so far.

• Silicon wafer area shipments in Q324 amounted to 3,214 million square inches (MSI), up 5.9% QoQ and up 6.8% YoY,
• Q324 saw the combined revenues from the top four players in the segment reaching $2.5 billion, up 0.5% QoQ and up 6.5% YoY
• Top 4 EBIT amounted to just $337 million, up 1.5% QoQ but down 38.9% YoY.