In today’s briefing:
- Ohayo Japan | Activist Targets Toyota Group
- China’s Cardiovascular Disease Crisis
- 24H2 Capital Market Outlook – Time to Prepare for the Upcoming Market Crash
- Earnings (AMKR, RMBS, NXPI, SWKS, ENTG, QCOM, WOLF, QRVO, ACLS)
- Japan Tourist Spending Per Head up 50% on 2019 Amid Record Arrivals
Ohayo Japan | Activist Targets Toyota Group
- The Dow edged up 32 points to close at 38,884, extending its winning streak to its longest since December
- Asset Value Investors proposed dissolving the parent-subsidiary listing of Toyota Industries and its listed subsidiary, Aichi Corp, seeking changes in corporate governance
- SoftBank Group invested in British AI startup Wave Technologies, contributing to a $1.05 billion financing round alongside NVIDIA and Microsoft.
China’s Cardiovascular Disease Crisis
- The cardiovascular disease (CVD) incidence and mortality gap between China and the West has narrowed/closed relatively quickly. CVD mortality rates in China exceeded Western levels a decade ago.
- China scores poorly for a number of leading CVD causes including diet, tobacco consumption and air pollution.
- Given the crisis situation, the Chinese authorities are left with no alternative but to drastically increase investment in healthcare and education.
24H2 Capital Market Outlook – Time to Prepare for the Upcoming Market Crash
- The real estate markets in the US/HK are on the eve of a collapse, which could affect China’s “Greater Bay Area”. Chinese Mainland’s financial system will face another test.
- The Fed may “surprisingly” launch one more rate hike. Since the US has pledged its allies to provide unlimited supply of dollar, it seems to be preparing for extreme scenarios.
- The world could become “out of imagination” in 24H2. So, we would recommend offload first in 24H1, hold enough cash, and then wait for the time to bottom-fish stocks.
Earnings (AMKR, RMBS, NXPI, SWKS, ENTG, QCOM, WOLF, QRVO, ACLS)
- Like last week, I will do a meta-level overview summary. That’s why I read these calls; to understand the whole, you must understand the parts.
- Smartphone markets continue to recover, but the demand is sluggish, and handsets should be flattish for the year. Industrial is bottoming at multiple companies, and Skyworks looks like it lost RF share to Qorvo. Telecom looks to be bottoming (NXPI).
- I think it’s pretty clear that the automotive cycle should be bought, not sold. And we continue to see strength in consumers (AMKR, QCOM). I am starting to like the Rambus story again, as I think their client business, the PMIC, and potentially CXL businesses could add 200m+ incremental revenue on top of the DDR5 share story in the coming years.
Japan Tourist Spending Per Head up 50% on 2019 Amid Record Arrivals
- The rebound in tourist numbers to Japan after Covid was inevitable given the latent demand and ongoing popularity of the country as a destination.
- But more surprising has been the huge diversity of nationalities, making up for the lag in Chinese visitors, boosting traffic at key retailers (as listed below).
- Also new is the higher spend per visitor thanks to the cheap Yen, boosting retailers across the spectrum. Data from Google and Qunar suggests much more growth to come.
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