In today’s briefing:
- Quick Take on ‘Golden Week’ Headline Tourism Traffic: Limited Improvement, & Shy of Expectations
- VIS (5347:TT): The Outlook Is a Bit Slower in 4Q23F
- Dongfang Electric (1072 HK): Don’t Miss Out on This Undervalued Play
- Taiwan Tech Weekly: Samsung & Nanya Earnings; AI Names Rebound Again
- Banks lead Q3 2023 net institutional inflow
- REIT Watch – Three S-Reits buck the trend in September
Quick Take on ‘Golden Week’ Headline Tourism Traffic: Limited Improvement, & Shy of Expectations
- Outbound daily traffic during the long holiday down -15% vs 2019, and short of expectations
- Total domestic trips up 4% vs 2019, but average daily trips -9% & average daily spending -4%
- Ten months in, the pace of China’s 2023 tourism recovery remains disappointingly sluggish
VIS (5347:TT): The Outlook Is a Bit Slower in 4Q23F
- Vanguard’s order visibility is about two months, and its order backlog is also about two months now.
- Vanguard’s goal is to establish a 12″ wafer Fab, which we estimate will likely be viable around 2026F.
- We believe that technology nodes below 28nm HKMG, specifically 40nm and below, would be suitable for transfer.
Dongfang Electric (1072 HK): Don’t Miss Out on This Undervalued Play
- The YTD underperformance of Dongfang Electric (1072 HK) has put it on very attractive PER of 5.8x for FY23. More importantly, it has delivered both earnings and new order growth.
- Financial position has improved with net cash of Rmb16.5bn and its recurring earnings soared 26.5% at 1H23. The adverse economic environment has not had an impact on its operations.
- New orders amounted to Rmb48.9bn (+33.3% YoY), a record high, and we estimate backlog at Rmb166bn. This equals 2.5x FY23F revenue and suggests forward earnings are well covered.
Taiwan Tech Weekly: Samsung & Nanya Earnings; AI Names Rebound Again
- Samsung Electronics and Nanya Technology will report their results this week. Samsung could reportedly increase NAND prices this month, giving a potential hint to the memory outlook they will provide.
- Hon Hai will begin mass production of its Model C electric car in 4Q23E in Taiwan. This will provide a proof point for Hon Hai’s global EV platform business model.
- Top gainers recently have included rebounding AI names — One can consider using the bounce to find AI shorts to pair against an Nvidia long.
Banks lead Q3 2023 net institutional inflow
- Banks lead Q3 2023 net institutional inflow INSTITUTIONS were again net buyers of Singapore stocks over the five trading sessions through to Oct 5, with S$100 million of net institutional inflow, and 24 primary-listed companies conducting buybacks with a total consideration of S$38.5 million.
- ComfortDelGro saw S$71 million of net institutional fund inflow in Q3 2023, after booking S$44 million of net institutional fund outflow in H1 2023.
REIT Watch – Three S-Reits buck the trend in September
- IN THE third quarter of 2023, the Straits Times Index (STI) generated a 2.1 per cent total return, bringing its nine-month total return to 3.3 per cent.
- During the quarter, the STI marginally outpaced the FTSE Asean Extended 60 Index and FTSE Asia Pacific Index, which recorded total returns of 1.1 per cent and declines of 1.1 per cent, respectively.
- On the other side of the “higher-for-longer” Fed funds rate outlook, the iEdge S-Reit Index declined 4.2 per cent in total return in Q3 2023.
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