In today’s briefing:
- Ohayo Japan | Mixed Messages; JAL Invests in Sustainable Flight
- Semiconductor WFE Q323 Segment Roundup & Outlook
- Chinese Airports at Inflection Point, Low Risk and High Visibility Growth Sector
Ohayo Japan | Mixed Messages; JAL Invests in Sustainable Flight
- Overseas: SPX (+0.1%), Nasdaq (+0.1%); Third consecutive week of gains; Mixed messaging out of Fed; AMAT under investigation for China export violations
- Today: NKY Futs -0.2% v cash. JPY 149.6/$; Berkshire sells yen bonds; Panasonic in talks to sell an auto parts biz; Itochu to buy Bigmotor?
- JapanX: ZeroAvia partners with Japan Airlines to develop hydrogen-electric engines, bringing sustainable flight closer. JAL commits to net-zero carbon emissions by 2050
Semiconductor WFE Q323 Segment Roundup & Outlook
- Q323 revenues of the top 5 WFE players amounted to $22.7 billion, up 2.6% QoQ, but down 9.5% YoY
- On the basis of current quarter forecasts, we calculate CY2023 WFE revenue to reach $92.6 billion, a 1.6% YoY decline, and a far cry from the previously anticipated 20% decline.
- Both ASML and TEL are forecasting 2024 revenues roughly flat YoY. We think the same will apply to the broader WFE segment.
Chinese Airports at Inflection Point, Low Risk and High Visibility Growth Sector
- Chinese airports have turnaround with Xiamen, Guangzhou, and Shanghai airports reported 9M23 profits. The others (Beijing, Shenzhen, Hainan) are still lossmaking, but should turnaround soon
- The upcoming Winter/Spring schedule reveals international capacity at 70% of 2019’s level, a catalyst for strong earnings growth, as international flights generate >2.5x higher revenues
- Xiamen International Air A (600897 CH) exhibits the best value; Shanghai International Airport (600009 CH) is the most appealing due to its size and liquidity
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