In today’s briefing:
- NVIDIA’s >5x YoY “Singapore” Revenue Growth Is A Red Flag
- Hamamatsu Photonics (6965) – Toyota Selling Yet Another Cross-Holding
- Tech Supply Chain Tracker (31-Aug-2024): Samsung’s growth depends on AI, HPC, autos.
- Potential Price Decline Amplification from NPS’s Appraisal Rights Exercise Against NCSoft
- Silergy (6415.TT): 2024 Can Be Operating Trough, and Revenue in 2025 Is Expected to Grow by 20-30%.
- Japan Business Systems (5036 JP) – 3Q Follow-Up
- Expecting Downside Ahead; Stick With Defensives; Downgrading Taiwan to Market Weight; Risk-Off Signs
NVIDIA’s >5x YoY “Singapore” Revenue Growth Is A Red Flag
- NVIDIA delivered another blockbuster quarter with record revenues of $30 billion, blowing well past the guided $28 billion, up 15% QoQ and up 122% YoY.
- $5.6 billion in revenues were attributed to Singapore, making up more than 18% of overall revenues and up >5 times YoY
- What the heck is the city state doing with all of those GPUs?
Hamamatsu Photonics (6965) – Toyota Selling Yet Another Cross-Holding
- Today after the close we got news that after a year-plus of Hamamatsu Photonics Kk (6965 JP)‘s sliding stock price, Toyota Motor (7203 JP) is selling their 5+% stake.
- The offering is standard. Probably prices 9 Sep 2024. HP’s amended buyback program and probable index upweights offset most of the offering size over the next several months.
- So investors have to decide whether they want to catch the falling knife.
Tech Supply Chain Tracker (31-Aug-2024): Samsung’s growth depends on AI, HPC, autos.
- Samsung’s foundry service growth is driven by AI, HPC, and automotive sectors, showcasing a diverse and promising market strategy.
- Meta is set to launch glasses-like MR device in 2027, aiming to revolutionize the way we interact with technology and the digital world.
- Global OSAT industry is projected to experience significant growth by 2024, fueled by increasing demand for testing and packaging services in the semiconductor market.
Potential Price Decline Amplification from NPS’s Appraisal Rights Exercise Against NCSoft
- During NCSoft’s exercise period starting August 14, the spread was tight, with NPS likely to exercise rights if it widens above 5% in the final days.
- NPS is unlikely to exercise its full 6.3% stake, but may sell 2% if the stock price drops below ₩180,000, widening the spread over 5%.
- This may increase NCSoft’s division costs and overhang risk, potentially amplifying stock price decline. Monitoring NCSoft’s stock early next week is crucial.
Silergy (6415.TT): 2024 Can Be Operating Trough, and Revenue in 2025 Is Expected to Grow by 20-30%.
- Company’s 2Q24 overall performance exceeded expectations, and 3Q and 4Q are expected to be flat and to grow by 10-20% per quarter, respectively.
- With expectations of continued improvement in ASP and cost structure, overall gross profit margin is expected to continue to grow.
- Gen4 (12″) is mainly applied in EV, AI server, and new energy sectors, as these applications have higher specification requirements.
Japan Business Systems (5036 JP) – 3Q Follow-Up
- When JBS announced recording an impairment loss associated with the acquisition of NEXTSCAPE on 2Q results, it only revised down the initial FY24/9 forecast for profit attributable to owners of parent from ¥3,450mn → ¥1,500mn, leaving the rest of the forecast unchanged.
- While the impairment loss was clearly disappointing, it is important to keep in mind this is a non-cash item, and prompt action by JBS management in writing down the entire remaining portion of unamortized GW minimized future downside risk.
- As described on the next page, 3Q cumulative (9M) consolidated net sales rose +29.0% YoY, and operating profit rose +28.5% YoY, relative to full-term initial guidance for FY24/9 consolidated net sales +12.4%, and operating profit +21.6%.
Expecting Downside Ahead; Stick With Defensives; Downgrading Taiwan to Market Weight; Risk-Off Signs
- Rallies appear to be stalling-out near logical resistances in the largest global equity markets. That includes 5670-5783 on SPX, 2690-2700 on Japan’s TOPIX, and 4884 on Europe’s EURO STOXX 50.
- We continue to believe these indexes will roll over near current or marginally higher levels, fitting with our ongoing belief that MSCI ACWI is going through a 1-to-4-month pullback/consolidation.
- Long-Term uptrend violations on global indexes and continued outperformance from defensive Sectors are our top concerns for global equities, though recession indicators and a Fed cutting cycle are also concerns.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
