In today’s briefing:
- Renesas (6723) | Bullish Toyota Troubles
- Hon Hai: U.S. Chip Restrictions Vs. China Have Put Hon Hai in a Stronger Than Ever Position
- Welcia Challenges Cosmos in Kyushu
- Shenzhen Intl (152 HK): Updates on Latest Developments
- Taiwan Tech Weekly: ASML & Lam Provide Industry Optimism, Wave of Earnings This Week
- Taiwan Dual-Listings: TSMC Premium Near-Term High, ASE Spikes, UMC High as Well
Renesas (6723) | Bullish Toyota Troubles
- We remain bullish on the stock price ahead of Q3 earnings
- We expect the company to surprise the market given stronger volumes and pricing trends
- If Toyota is having problems securing a stable supply of chips, we believe that industry inventories are much leaner than most believe
Hon Hai: U.S. Chip Restrictions Vs. China Have Put Hon Hai in a Stronger Than Ever Position
- U.S. chip restrictions have hobbled Hon Hai’s China EV competition.
- AI and advanced semiconductors will become a necessity for a globally competitive EV platform and Hon Hai appears to be moving aggressively to capture this opportunity.
- The shares should see topline growth and major margin expansion into 2025, and the market appears to have not yet priced-in Hon Hai’s latest advantageous position.
Welcia Challenges Cosmos in Kyushu
- Welcia Holdings (3141 JP) and Tsuruha Holdings (3391 JP), the country’s leading drugstore chains, are both looking to expand quickly in Kyushu after only entering the market recently.
- This won’t be easy. Kyushu is full of discount retailers led by one of the best discounters, Cosmos Pharmaceutical (3349 JP), which is also a leading drugstore chain.
- But building a significant market share in the Kyushu market is crucial to competing nationally with these emerging discount leaders.
Shenzhen Intl (152 HK): Updates on Latest Developments
- Given Shenzhen Airlines is already in negative equity, Shenzhen International (152 HK) will not record any of its losses in 2H22, making a big HoH swing in its impact.
- The injections of Hangzhou and Hefei logistics projects will be completed by end-FY22, bringing in one-off gains. Jul-Aug toll revenue of Shenzhen Expressway (548 HK) has also recovered vs. 1H22.
- While there will not be profit at logistics parks transformation business in 2H22, Qianhai Phase II has completed pre-sale in Sep, bring in potentially Rmb3bn to be booked in FY23.
Taiwan Tech Weekly: ASML & Lam Provide Industry Optimism, Wave of Earnings This Week
- ASML and Lam Research beat estimates last week and provided some relief to the semiconductor space.
- Major global industry earnings coming this week include — Samsung, SK Hynix, Texas Instruments, KLA Tencor, Apple, and Intel.
- Major Taiwan earnings this week — AUO, UMC, ASE, Realtek, Delta Electronics, Mediatek.
Taiwan Dual-Listings: TSMC Premium Near-Term High, ASE Spikes, UMC High as Well
- TSMC’s ADR premium has rebounded and is high relative to its recent trading range.
- ASE Technology’s ADR premium has spiked to a historically very high level.
- UMC ADRs are also trading at a relatively high premium.
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