Thematic (Sector/Industry)

Japanese equities were marginally higher on the week as global markets continued to focus on problems in the banking system
The Fed, The Bank of England and the Swiss National Bank continued to fight the war on inflation.
In Japan, Recruit was the standout performer after the company announced a hefty cut to its workforce (in a bad news is good news kinda way)

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Mar 24

Daily Brief Thematic (Sector/Industry): Anatomy Of A Semiconductor Downturn and more

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

In today’s briefing:

Anatomy Of A Semiconductor Downturn
Good Morning Japan |Dot Plot Says 5.1%; Tech Leads Gains; NUGGET: Japan’s Hay Fever Hell-Few Winners
Pagcor’s New Priority to Sell Its Casinos Could Be a Catalyst for Key Sector Stocks

Anatomy Of A Semiconductor Downturn

The current semiconductor downturn is largely attributable to the reversion of PC and Smartphone unit shipments to their pre-pandemic norms
There are good reasons to believe that the trough for PC unit shipments will be Q1 2023.
Server shipments will decline sequentially in H1 and this may further prolong the impact on memory players, Intel and to a lesser extent, AMD & NVIDIA

Good Morning Japan |Dot Plot Says 5.1%; Tech Leads Gains; NUGGET: Japan’s Hay Fever Hell-Few Winners

OVERSEAS. SPX ekes out +0.3% gains; Only Tech & Telcos Positive while other 9 sectors in the Red; Fed’s dot plot says 5.1%; Hinderburg takes aim at BLOCK (Square)
JAPAN. NKY Futs -1.2% vs Cash; USDJPY 130.9 as US Rate hike fears wane; Japan ends export restrictions on semi materials to S. Korea; Softbank’s ARM to change pricing rules
NUGGET. Japan’s Hay Fever Hell: Few Winners, Many Losers. Winners: drugstores, pharmacists, e-commerce; Losers: everyone related to Outdoor activities !

Pagcor’s New Priority to Sell Its Casinos Could Be a Catalyst for Key Sector Stocks

By Howard J Klein

The government’s policy shift to sell its casinos is the latest in a long line of flip flops regarding the future of its presence in the industry.
The timing is right. Philippine casinos are on a post-pandemic run even before the return of Chine tourism. Bloomberry, operators of Manila’s Solaire has scored a record quarter.
Leading possibility beside Bloomberry is Las Vegas Sands long on the hunt to expand its Asian footprin to a third nation.

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Mar 23

Daily Brief Thematic (Sector/Industry): Good Morning Japan |Yellen/Powell Rattles Markets; NUGGET: NIKON – Riding the DigiCam Renaissance and more

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

In today’s briefing:

Good Morning Japan |Yellen/Powell Rattles Markets; NUGGET: NIKON – Riding the DigiCam Renaissance
Intel’s GPU Guru Departs. Very Abruptly.
Intel Foundry Chief Announcement Spells Trouble For The Tower Semi Acquisition
China SOEs – Waiting for Core Asset Valuation to Take Off
Ecognosis Advisory Ltd – ECONOTE No. 111 Investing in the Defence Sector
Key Takeaways from IRENA’s Global Landscape of Renewable Energy Finance 2023 Report
Tech Talk: Digital Transformation
China TMT Update(Mar.23): 3690HK/PDD/BABA – Surplus Meituan Delivery Riders Could Improve Margins

Good Morning Japan |Yellen/Powell Rattles Markets; NUGGET: NIKON – Riding the DigiCam Renaissance

OVERSEAS. Fed Chair Powell delivers expected +25bps; Hawkish pledge on inflation + Yellen’s testimony rattles markets; Safety trade reasserts; Seems like more volatility ahead for all markets.
JAPAN. NKY Futs -1.7% vs Cash; USDJPY strengthens to 131.4 n rush to safety; Monetary nomalization on course in Japan – solid Land price gains + continued wage hikes.
NUGGET. NIKON – Riding the Digital Camera Renaissance. Camera demand has stabilizes and is recovering as consumers shift to high end models.

Intel’s GPU Guru Departs. Very Abruptly.

While his hiring back in 2017 was heralded with a corporate press release, his abrupt departure yesterday was communicated via a rather succinct tweet from the CEO.
Intel’s GPU/DPU data center roadmap was already “simplified” in back in January. Will what remains survive the ongoing cuts across the company?
Should Intel still really be trying to break into the gaming PC market? How is that strategically important?

Intel Foundry Chief Announcement Spells Trouble For The Tower Semi Acquisition

By VRS (Valuation & Research Specialists)

The role has been vacant for > 3 months. Why wait till now to chose an obvious in-situ candidate?
Closure date for the Tower acquisition has been pushed out to H1 2023 from Q1 2023 according to an Intel filing on January 27 last
Intel’s fortunes have changed dramatically for the worse over the past year. It’s debatable whether the Tower acquisition makes sense any more.

China SOEs – Waiting for Core Asset Valuation to Take Off

By Xinyao (Criss) Wang

In most industries, SOEs have valuation discounts compared to non-SOEs, and the degree of PB discount is more obvious than P/E ratio. A prominent problem is the uneven valuation structure.
Valuation reflects expectations for future fundamentals. The improvement in SOE performance with limited valuation boost may be due to investors’ consideration of growth potential, governance mechanisms, and information asymmetry.
With the further deepening of SOE reform and the formation of the concept of building a modern capital market with Chinese characteristics, it’s expected to see improvement in SOE’s valuation.

Ecognosis Advisory Ltd – ECONOTE No. 111 Investing in the Defence Sector

In Econote No. 110 ( Nov.Dec 2022) we broached the topic of investing in the Defence sectors of various West and Asian economies.
The reasons for this were very simple: First, the war in the Ukraine resulted to a sharp rise in defence spending in western countries and, second, this rise would not cease with the end of the war but presented a pivot to higher defence spending, not only in western countries, but also in areas such as Asia.
Hence the outlook for Defence stocks was, and is very bright, as witnessed by their persistent outperformance of the S&P 500 and still reasonable valuations.

Key Takeaways from IRENA’s Global Landscape of Renewable Energy Finance 2023 Report

We have made our best efforts to summarize the content published in the most recent IRENA report on renewable energy financing.
This report provides a quick summary of key facts from the 120-plus-page report.
While worldwide investment in renewable energy reached a record high of US$0.5 trillion in 2022, it represented less than 40% average expenditure required under IRENA’s 1.5°C Scenario between 2021 and 2030.

Tech Talk: Digital Transformation

The digital transformation services market is big, at more than $2 trillion this year, and growing at a 23% CAGR.
According to Gartner, 91% of organizations have a digital initiative currently ongoing and 67% of senior executives believe their organizations must become significantly more digitized.
The reason digital transformation is growing is the benefits of a true digital transformation are significant, including improved operations, time-to-market, and customer experience, and COVID-19 just accelerated the trend.

China TMT Update(Mar.23): 3690HK/PDD/BABA – Surplus Meituan Delivery Riders Could Improve Margins

3690HK: Surplus Meituan delivery riders could improve margins beginning in 1Q23 (+)
PDD: Temu temporarily suspended inventory intake at Guangzhou warehouse because of shortage in labor and warehouse storage capacity (-)
BABA：Taobao is testing “price comparison” feature, which might impact its take rate（-）

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Mar 22

Daily Brief Thematic (Sector/Industry): AMD Versus Intel. Spot The Differences? and more

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

In today’s briefing:

AMD Versus Intel. Spot The Differences?
Good Morning Japan |SPX Reclaims 4000! NUGGET: Asahi Kasei-M&A Gone Bad, Writedown, Struggles Remain
Japan Healthcare: Currency Benefit Seems to Be Fading; Focus Will Be on Underlying Business Strength
Discount Drugstores Challenging Japanese Supermarkets
MQG – Funding Squeeze?
Banks Vs. Market: A Closer Look at Equity Risk Premia and Other Valuation Measures
China TMT Update(Mar.22): 700HK/NTES/BILI/IQ/3659.JP /BGNE/9995HK/ZLAB – Foreign Game Codes(+)

AMD Versus Intel. Spot The Differences?

AMD Q4 2022 revenues amounted to $5.6 billion, $100 million above the midpoint of the guided range, flat sequentially but an increase of 16% YoY.
Intel Q4 2022 revenue amounted to $14 billion, at the very bottom of the guided range down 8% sequentially and down 28% YoY.
Facing the same macro headwinds, AMD significantly outperformed Intel across a wide range of key metrics in 2022

Good Morning Japan |SPX Reclaims 4000! NUGGET: Asahi Kasei-M&A Gone Bad, Writedown, Struggles Remain

OVERSEAS. SPX reclaims 4000 level with 2nd day of gains; 8/11 SPX sectors up as VIX collapses; Fed Decision Day on Wed-Expect No surprises; INTEL headwinds on China curbs
JAPAN. NKY Futs +0.6% vs Cash; USDJPY 132. 4; Japan set to rally after the Spring transition break;US accepts Japan’s EV subsidy appeal=+ve auto parts; More inflation support from govt.
NUGGET. Asahi Kasai – M&A Gone Bad, Writedown, Struggles Remain. Future profitability of the LiB Separator business in question.

Japan Healthcare: Currency Benefit Seems to Be Fading; Focus Will Be on Underlying Business Strength

By Tina Banerjee

In 2022, JPY depreciated against USD to the lowest level in more than 30 years. This benefitted healthcare companies in Japan, which earn significant portion of revenues from the U.S.
This year, Yen has started reversing its course and began to strengthen. With benefit of favorable Forex gradually fading, investors need to be selective in picking healthcare bets in Japan.
We have discussed about five top picks from Japan healthcare sector. Domestic focused business, favorable industry tailwinds, and COVID recovery are the main investment thesis for the top picks.

Discount Drugstores Challenging Japanese Supermarkets

By Michael Causton

Drugstores were already the fastest growing format before Covid and the health scare only improved their performance further.
Several of the largest chains are now powerful players in food, using their non-food base to shake up the supermarket sector in ways that Japan has never seen before.
Being price-led, inflation is only helping them along, with a much greater capacity to hold down prices than mainstream supermarkets.

MQG – Funding Squeeze?

By Daniel Tabbush

Funding squeeze evident in HK’s HIBOR market and reported in Australia too
Even where not visible, this must be expected globally, as banks reign in risk
MQG has low levels of deposits and high levels of securities

Banks Vs. Market: A Closer Look at Equity Risk Premia and Other Valuation Measures

By Jeroen Blokland

Unsurprisingly, the (required) equity risk premium on bank stocks has increased, but especially in the case of US banks, it is not at extreme levels.
The forward P/E ratio of European bank stocks has dropped to distressed/recessionary levels, while the forward P/E of US bank stocks is ‘seriously low’ at 8.
However, based on the Price-to-Book ratio, bank valuation is average. Given elevated contagion risks and increased regulatory scrutiny, bank stock valuation alone is insufficient to overweight the sector.

China TMT Update(Mar.22): 700HK/NTES/BILI/IQ/3659.JP /BGNE/9995HK/ZLAB – Foreign Game Codes(+)

700HK/NTES/BILI/IQ/3659.JP: The latest Foreign game codes released by NPPA, positive to gaming companies(+)
BGNE/9995HK：Daiichi and Zymeworks end antibody pact after seven years (-)
ZLAB：ZaiLab’s partner Karua’s Schizophrenia drug obtained positive Phase 3 data (+)

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Mar 21

Daily Brief Thematic (Sector/Industry): AT1 Bonds; Life After Credit Suisse and more

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

In today’s briefing:

AT1 Bonds; Life After Credit Suisse
Asia Gaming: The Melco Dilemma Favors the Pure Play US Traded ADR
President Xi’s Visit to Russia – For Russia-Ukraine War Or For The BRICS Currency?
SPAC Talk: The SVB Collapse and SPACs
Commodity Analysis – Copper Futures
China TMT Update(Mar.21): BILI/BIDU/BABA/3635.JP/BGNE – Douyin Launches “Qingtao”, Similar to BILI
Weekly Sustainable Investing Surveyor: Week Ended March 17, 2023

AT1 Bonds; Life After Credit Suisse

By Victor Galliano

The UBS acquisition of Credit Suisse includes the write-off of CHF15.8bn (USD17bn) of Additional Tier 1 (AT1) bonds, despite there being residual equity value for CS shareholders in the deal
AT1s are the most junior, loss absorbing of bonds; precedent exists for the zeroing of AT1s in Spain’s Banco Popular 2017 failure, but importantly this also included shareholders being zeroed
The Credit Suisse AT1 write-off is by far the biggest so far and this unconventional treatment of shareholders versus junior bondholders should lead European banks’ cost of equity to rise

Asia Gaming: The Melco Dilemma Favors the Pure Play US Traded ADR

By Howard J Klein

We have guided buy on MGM the parent as well as MGM China for exposure to both Asia and US post covid recovery. This is different: pure play only.
The Melco Hong Kong traded parent offers exposure to Macau, Manila and the new Cyprus properties. But we believe the ramping of GGR will be stronger in Macau than elsewhere.
The stock is up nearly 4X its October low. We see its current price attractive for a speedier upside than its parent.

President Xi’s Visit to Russia – For Russia-Ukraine War Or For The BRICS Currency?

By Xinyao (Criss) Wang

The cooperation between China and Russia will be extensive and far-reaching.After the historic reconciliation between Saudi Arabia and Iran, there’s expected to be a series of major international changes ahead.
The highlight of Xi-Putin meeting could be to promote the BRICS currency. This means that global de-dollarization has officially begun, which will be a fatal blow to the US dollar.
The future game rule in this world is no longer be decided by the US alone. We suggest that investors change their way of thinking, because the world has changed.

SPAC Talk: The SVB Collapse and SPACs

By VRS (Valuation & Research Specialists)

In the ordinary course of SPAC business. In what has become the norm in SPAC land these days, we can report another flurry of liquidation announcements.
As we begin the second half of the month, the liquidation count for March, including those that have been completed or are scheduled to be completed for the remainder of month, has already passed 34, involving the return of $10.9 billion to their Class A shareholders.
The prospects of more liquidations being added to the March list remain high.

Commodity Analysis – Copper Futures

According to Graph 2, during the period October 7, 2022 – January 6, 2023, an overall bullish trend was reflected in the prices of Copper.
During the examined period there were broadly three secondary movements.
From October 7th, until November 11th, an upward trend was observed.

China TMT Update(Mar.21): BILI/BIDU/BABA/3635.JP/BGNE – Douyin Launches “Qingtao”, Similar to BILI

BILI: Douyin launches a new APP “Qingtao”, similar to BILI (-)
Baidu’s ERNIE Bot exceeds expectations from user feedbacks (+); BABA/3635JP: <Three Kingdoms: War Chess Version> performance slightly above average (+/+)
BeiGene’s termination of DKK1 collaboration with Leap is likely because its PD-L1 already got positive Phase III result on the same indication（/）

Weekly Sustainable Investing Surveyor: Week Ended March 17, 2023

WTR Sustainable Index: During the week ended March 17, 2023, the WTR Sustainable Index underperformed the broader market, rising 1.2% W/W versus the S&P 500 Index (up 1.4%), the Russell 2000 Index (down 2.6%), and the Nasdaq Composite Index (up 4.4%).
Advanced Transportation Solutions (69.3% of the index) drove the index performance, rising 3.3%, while Industrial Climate and Ag Technology (22.8% of the index) was down 2.0% and Energy Technology was down 5.8%.
Valuation: Based on forward 12-month consensus estimates, the current P/E ratio of the WTR Sustainable index is 23.6x versus 17.6x for the S&P 500.

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Mar 20

Daily Brief Thematic (Sector/Industry): Good Morning Japan |UBScs – Wedding Vows Sealed; NUGGET: MOL-Diversification Can’t Come Fast Enough and more

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

In today’s briefing:

Good Morning Japan |UBScs – Wedding Vows Sealed; NUGGET: MOL-Diversification Can’t Come Fast Enough
Globalwafers Q4 2022 Earnings Key Takeaways
[Consumer Brands Deep Dive]:Structural and Substitution Drive Chinese Consumer
TRACKING TRAFFIC: Chinese Express / No Signs of a Sharp Recovery in Jan-Feb Data
Weekly Stock Bullfinder – Week of 3/20

Good Morning Japan |UBScs – Wedding Vows Sealed; NUGGET: MOL-Diversification Can’t Come Fast Enough

OVERSEAS. Equities Sell-off on Pending Demise of Credit Suisse; Flight to Safety Trade resumes; SNB engineer Shotgun Wedding – deal closed with UBS $3.25 billion. The end of an era.
JAPAN. On Friday, NKY Futs -2.3% vs Cash as Contagion Fears around Credit Suisse prompted Flight to Safety; With CS Rescue, expect strong open; JP Shippers Container Profits looks shaky
NUGGET. As Mitsui OSK approaches ex-div, we think the share price will see headwinds given the expected earnings decline on ONE’s earning collapse = (MUCH) lower dividends next year.

Globalwafers Q4 2022 Earnings Key Takeaways

Globalwafers is bucking the trend with a sequentially flat CY2023 revenue forecast
Q4 2022 delivered the company’s twelfth successive quarter of sequential revenue growth
Details of the funding available under the US CHIPS Act for Globalwafers Sherman, Texas greenfield expansion still remain unclear

[Consumer Brands Deep Dive]:Structural and Substitution Drive Chinese Consumer

Even though we are long-term optimistic on the rise of Chinese consumer brands, we believe short-term optimism is misplaced.
Two themes: (1) structural changes led by China’s transition to an older and more affluent society, (2) substitution and globalization that can break the ceiling for valuation;
Our TOP PICKS are Li Auto, Atour, Luckin, FUTU, BEKE and Miniso

TRACKING TRAFFIC: Chinese Express / No Signs of a Sharp Recovery in Jan-Feb Data

By Daniel Hellberg

Combined January-February express industry parcel volume was up just 4.6% Y/Y, and ASPs were down -1.8% Y/Y
Listed express companies’ parcel volume and government-reported online tangible goods sales in the first two months of 2023 also both up a modest ~5% Y/Y
In a year when one express player hopes to list its shares, it’s unclear who will be willing to concede market share. We expect price competition to intensify in 2023.

Weekly Stock Bullfinder – Week of 3/20

By Weekly Stock Bull Finder

Volatility continues to show up with the recent banking sector stress which has given market participants fresh concerns over secondary credit exposures and the Treasury/central bankers response to address the issues.
With the Fed meeting this upcoming week, never before in this interest rate hiking cycle to date has there been more diverse viewpoints coming out over whether a Fed pause, Fed hike, or even a Fed cut should be done in the next meeting.
Up until this point, the conversations have focused on how much (25bps,50bps, 75bps) the Fed should do at each of its meetings in order to get inflation back down based upon the incoming inflation data.

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Mar 19

Daily Brief Thematic (Sector/Industry): AMD. Latest Market Share Growth & Outlook and more

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

In today’s briefing:

AMD. Latest Market Share Growth & Outlook
GEM Weekly (17 Mar 2023): Chinese Macro Data; CATL, ByteDance, Samsung Electronics, Baidu
China Healthcare Weekly (Mar.17) – VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?
Short Note: LONG China on Monetary Easing Cycle

AMD. Latest Market Share Growth & Outlook

AMD’s overall x86 market share has doubled in the last three years
AMD’s desktop market share rebounded from 13.9% in Q3 2022 to 18.6% in Q4 2022
AMD will likely prioritise server versus client market share in 2023 & 2024, pressing home their clear leadership advantage over Intel in this segment during this timeframe

GEM Weekly (17 Mar 2023): Chinese Macro Data; CATL, ByteDance, Samsung Electronics, Baidu

By Wium Malan, CFA

The Global Emerging Markets weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
Macro data points: Chinese industrial production, retail sales, and fixed asset investment.
Companies mentioned: CATL (A) (300750 CH), ByteDance (1439927D CH), Samsung Electronics (005930 KS), Baidu (9888 HK)

China Healthcare Weekly (Mar.17) – VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?

By Xinyao (Criss) Wang

National centralized procurement on ophthalmology and orthopedics would be carried out soon, including ICL and sports medicine. Products in neuro-intervention/neurosurgery/peripheral intervention/IVD reagents would be included in 2023 VBP as well.
After NRDL negotiation/VBP/DRGs policies are fully mature, it is expected to see the emergence of some high-price-oriented payment system for innovative products. Only then will the industry beta really emerge.
If long-term money doesn’t have enough understanding of the trend of long-term interest rates, the expected return and valuation model of healthcare companies can’t be adjusted in time (e.g. CXO).

Short Note: LONG China on Monetary Easing Cycle

By Jacob Cheng

PBoC just announced a RRR cut of 25bps, which is a surprise to market
The cut will lower average RRR from 7.8% to 7.6%, and is expected to release c. 500bn of liquidity. China’s low inflation allows more room for further RRR cuts
Government’s press release addresses key market concerns. We need to monitor recovery in property market. LONG China on easing cycle. China property names are trading at distressed valuation

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Mar 18

Daily Brief Thematic (Sector/Industry): Japan Weekly | The Deflationary Macro Read; SONY; What’s up with Auto Stocks and more

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

In today’s briefing:

Japan Weekly | The Deflationary Macro Read; SONY; What’s up with Auto Stocks
US Bank Sector Stress – Old Fashioned Risks and a Regulatory Loophole Meet the Digital Age
Commercial/Contract Furniture/Consumer Hardlines Industry News

Japan Weekly | The Deflationary Macro Read; SONY; What’s up with Auto Stocks

US stocks up, bonds down, commodities down, Japanese stocks down = deflation
The UK CMA is getting closer to a decision on the Microsoft acquisition of Activision. The provisional findings are in, the responses are in….now we wait
Auto stocks were clear underperformers. You can chalk that up to yen strength or a growing realization of the cost of electrification.

US Bank Sector Stress – Old Fashioned Risks and a Regulatory Loophole Meet the Digital Age

By Victor Galliano

Interest rate risk in the system increased with the Fed’s steep interest rate hikes and due to the opt-out for many US banks on the AFS securities market-to-market capital hit
Uninsured and concentrated deposits, at the first hint of bank trouble, can take flight very quickly especially in the case of concentrated, key elements of the Silicon Vally Bank collapse
We believe that it is premature to look for buy opportunities in US banks, although we believe that the largest US banks are sound in terms of their balance sheets

Commercial/Contract Furniture/Consumer Hardlines Industry News

This note addresses the Business Institutional Furniture Manufacturers Association’s (BIFMA) Monthly Market Pulse (MMP) of incoming orders and sales for January 2023.
About 50+ BIFMA member companies voluntarily submit monthly sales and orders to a national accounting firm that aggregates and reports composite data.
Neither BIFMA nor any individual member has access to the raw data.

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Mar 17

Daily Brief Thematic (Sector/Industry): Good Morning Japan |VICTORY Declared as Bailouts Rule; NUGGET: ORIX-Riding the Zero-Carbon MegaTrend and more

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

In today’s briefing:

Good Morning Japan |VICTORY Declared as Bailouts Rule; NUGGET: ORIX-Riding the Zero-Carbon MegaTrend
Automakers in China Are Racing to Slash Prices
ZTO Express Q4/2022 Results & Guidance: Moderate Growth in ’23, but Also Obstacles
Housing Market Slide Slows Amid Signs of Recovery
China TMT Update (Mar.17): 1024.HK/BIDU/700.HK/NTES：Baidu ERNIE Bot Press Conference Is Held

Good Morning Japan |VICTORY Declared as Bailouts Rule; NUGGET: ORIX-Riding the Zero-Carbon MegaTrend

OVERSEAS. Crisis Over !Bailouts from US to Europe, Stocks rally as Contagion fears wane; Major Banks rescue First Republic Bank; Swiss Central Bank protects Credit Suisse; ECB raises by 50bps
JAPAN. NKY Futs flat vs Cash; USDJPY 133.8; Expect Japan Equities to start the road to recovery with macro fears subsiding; Japan-Korea move fwd on trade/security.
NUGGET. Orix – one of the Biggest Renewables Plays in Japan. Riding the Decarbonization MegaTrend

Automakers in China Are Racing to Slash Prices

By Caixin Global

Several major automakers in China are racing to slash prices on both new-energy (NEV) or conventionally powered vehicles, hoping to survive an escalating price war as consumer demand weakens amid policy changes.
The price war intensified at the start of March, when state-owned Dongfeng Motor Group Co. Ltd. launched a promotion in its home province of Hubei by offering steep discounts on some of its models
The promotion, which came two months after U.S. electric-vehicle (EV) giant Tesla Inc.’s eye-catching price cuts, set off a chain reaction across the industry

ZTO Express Q4/2022 Results & Guidance: Moderate Growth in ’23, but Also Obstacles

By Daniel Hellberg

ZTO Express (ZTO US) met consensus Q422 EPS estimate despite a miss on Revenue
Management expects to exceed industry volume growth (around +10%) in 2023
Likely obstacles to a sharp earnings recovery are: ASP momentum, “new-old” competition, and a lack of demonstrated cost control

Housing Market Slide Slows Amid Signs of Recovery

By Caixin Global

China’s struggling property market is showing glimmers of improvement as the protracted decline in housing investment and sales slowed during the first two months this year
Property investment by developers dropped 5.7% in the first two months of 2023, narrower than the 12% decline in December and the 10% slump for all of 2022.
Housing sales also showed signs of recovery in the first two months. Total property sales by floor area fell just 3.6% from a year earlier, compared with a 24% decline for the whole of 2022

China TMT Update (Mar.17): 1024.HK/BIDU/700.HK/NTES：Baidu ERNIE Bot Press Conference Is Held

1024HK：China’s consumer rights gala exposes problems of livestreaming industry, Kuaishou receives a warning（-）
BIDU：Baidu ERNIE bot press conference is held， there result is not promising（-）
Gaming Industry: Game-related proposals during Two Sessions indicate positive attitude for gaming industry (+)

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Mar 16

Daily Brief Thematic (Sector/Industry): Semiconductor Memory Segment Q4 2022 Review and more

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

In today’s briefing:

Semiconductor Memory Segment Q4 2022 Review, 2023 Outlook
Good Morning Japan |Now Its Credit Suisse-Markets Rattled; NUGGET: Fuel for Japan’s Defense Stocks
IVF: Secular Growth for Decades to Come.
Investors’ Capital Allocation Shift Among Korean Banks Post Collapse of SVB Financial
Semiconductor Silicon Wafers Segment Q4 2022 Roundup & 2023 Outlook
The Stocks to Own in Thailand – Vol. 40
China TMT Update(Mar.16): BABA/JD/PDD/VIPS/TikTok – PDD Reveals Ambitious Goal in Temu Conference
Weekly Sustainable Investing Surveyor: Week Ended March 10, 2023
January Mattress Imports Bump Higher Versus December; Sourcing from Vietnam Rebounds

Semiconductor Memory Segment Q4 2022 Review, 2023 Outlook

H2 2022 was a brutal half year for memory. H1 2023 doesn’t look any better.
We anticipate a trough in Q1 2023, sequentially flat Q2 followed by modestly increasing revenues through H2.
Micron’s upcoming earnings on March 28 will be the next significant data point regarding the state of the memory segment.

Good Morning Japan |Now Its Credit Suisse-Markets Rattled; NUGGET: Fuel for Japan’s Defense Stocks

OVERSEAS. Credit Suisse Rattles Markets; Spurs Equity sell off in flight to Safety trade; UST 2Yr Yld back below 4%; Crude Extend losses amid Banks sector worries;
JAPAN. NKY Futs -2.6% vs Cash; USDJPY 133.4. NKY Futs surprisingly weak given JP untouched by turmoil; Govt considers Cash transfers to poor households; Inbound recovery Continues
NUGGET. As Japan Hosts “Defense and Security Equipment International (DSEI) JAPAN” trade show this week, it will highlight opportunities for local defense contractors overseas.

IVF: Secular Growth for Decades to Come.

By Michael Fritzell

The IVF industry is booming, driven by couples having children later in life as well as infertility problems.
There should be plenty of opportunities for IVF clinic operators, including for Jinxin Fertility which may benefit if the Chinese government introduces subsidies for IVF procedures. But the acquisitive nature of many IVF-related companies has caused their returns on equity and earnings per share growth to be weak.
One stock that trades at a low multiple with fat profit margins is Organon, though be aware of its ongoing patent cliffs, which may be the reason it was spun off in the first place.

Investors’ Capital Allocation Shift Among Korean Banks Post Collapse of SVB Financial

By Douglas Kim

Svb Financial has collapsed and Credit Suisse is on the verge of collapse. We discuss a trading strategy on Korean banks amid the ongoing turbulence on the global banking system.
Our trading strategy is to go long on a basket of three largest banks in Korea (KB, Shinhan, Hana) and go short on a basket of five smaller banks.
Post collapse of SVB Financial, one clear signal appears to be increasing global capital allocation to the “too big to fail banks” and reduced capital allocation to regional banks.

Semiconductor Silicon Wafers Segment Q4 2022 Roundup & 2023 Outlook

Worldwide silicon wafer shipments declined ~4% sequentially in Q4 2022. We anticipate a further 10% sequential decline in area shipments in Q1 2023
For 2023, we expect wafer shipments to decline by around 5% YoY with weakness in H1 offset by strength in demand in H2.
Despite the decline in area shipments, we expect the sector to remain strongly profitable, bolstered by the impact of Long Term Agreements and customer prepayments.

The Stocks to Own in Thailand – Vol. 40

By Dr. Andrew Stotz, CFA

We highlight 14 stocks in Thailand that look interesting to us based on our FVMR Methodology
Portfolio changes: Five stocks remain, nine new join the fray
Since inception, it has gained 96% versus the SET 100 Index’s return of 29%

China TMT Update(Mar.16): BABA/JD/PDD/VIPS/TikTok – PDD Reveals Ambitious Goal in Temu Conference

PDD: PDD reveals ambitious goal in Temu offline conference (+)
BABA/JD/VIPS/3690.HK: 5% YoY rebound in January/February retail data, but slower than expected (-/-/-/+)
TikTok：TikTok is ready to launch search ads, minior impact to Google

Weekly Sustainable Investing Surveyor: Week Ended March 10, 2023

The WTR Sustainable Index underperformed the broader market, falling 10.3% W/W versus the S&P 500 Index (down 4.5%), the Russell 2000 Index (down 8.1%), and the Nasdaq Composite Index (down 4.7%).
Advanced Transportation Solutions (67.9% of the index) drove the index underperformance, falling 12.4%, while Industrial Climate and Ag Technology (23.6% of the index) was down 3.4% and Energy Technology was down 10.3%.
Top 10 Performers: WWR, ABML, EFOI, LPEN, AMYZF, FCSMD, REE, PPSI, JEV.V, TPIC

January Mattress Imports Bump Higher Versus December; Sourcing from Vietnam Rebounds