In today’s briefing:
- Ohayo Japan | Stocks Losing Steam; Canon’s Nanoimprint to Disrupt Semiconductor Manufacturing
- [XPeng Inc. (XPEV US, BUY, TP US$18) Target Price Change]: Does Xiaopeng Need Xiaomi to Survive?
- With No Surprise, Diodes Guides Automotive/Industrial Semi Demand to Fall over 20% Q/Q
- Cannabis Catalysts – Five Factors That May Drive Change in 2024
Ohayo Japan | Stocks Losing Steam; Canon’s Nanoimprint to Disrupt Semiconductor Manufacturing
- Overseas: SPX +0.1% , Nasdaq +0.1%; Stocks losing steam; WeWork goes bust; Roblox +12%, Upstart -27%, Toast -14%
- Today: NKY Futs +0.5% v cash. JPY 151; New Nintendo movie; Mizuho increases stake in Rakuten Secs; Fuji Soft Group Reorganization
- JapanX | Canon’s Nanoimprint Technology to challenge ASML Dominance and Potentially Disrupt Semiconductor Manufacturing
[XPeng Inc. (XPEV US, BUY, TP US$18) Target Price Change]: Does Xiaopeng Need Xiaomi to Survive?
- The rapid ascending Huawei EV ecosystem is threatening everyone except BYD and Tesla. XPEV is the next in line after NIO;
- We do view Xiaomi as offering an alternative to Huawei to present a unified IOT user experience. But now is too early to judge Xiaomi’s success and XPEV’s role;
- We cut the TP from US$24.3 to US$18 and maintain BUY.
With No Surprise, Diodes Guides Automotive/Industrial Semi Demand to Fall over 20% Q/Q
- Like other automotive/industrial semi vendors, Diodes guides 4Q23 sales of 20% q/q and 35% y/y decline (miss by 21%) and weaker gross margin/operating margin of 35%/7% (miss by 5ppts).
- The company sees 4Q23 sales decline of 20% mainly from 19% of automotive and 26% of industrial customers due to customer inventory cut coupled with year-end distributor inventory management.
- We expect this adjustment for automotive/industrial IDMs to last for at least 6 months and suggest our clients to avoid these names unless valuation becoming attractive.
Cannabis Catalysts – Five Factors That May Drive Change in 2024
- Cannabis is a state-led growth story with a series of hard-to-time political catalysts.
- Slower-than expected state rollouts and a drought of political progress have contributed to the US cannabis MSOS ETF falling more than 90% since its peak on February 10, 2021.
- Valuations are compressed and there are a series of potential new states and political catalysts ahead.
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