3 October 2024 | 6:33PM HKT _ China Healthcare Field trip takeaways: 3Q likely stabilizing/bottoming; increasingly positive tones on policy direction We visited 13 healthcare companies within various sub-sectors in Beijing/ Shijiazhuang/ Shanghai/ Changsha on Sep 24-27, 2024, to gauge the recovery and policy roll-out for 2H24. 3Q fundamentals likely bottoming/stabilizing, with some silver linings: during our trip, many companies not yet seen major inflection in 3Q, while expecting no further deterioration, ...

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **China Communications and Networking** sector, highlighting a **25% average rally** in stocks since September 23, 2024, particularly among previously lagging and AI-related stocks [1][10]. Core Companies and Valuation Insights - **Five key stocks** are favored for their structural growth drivers into 2025E while trading at depressed valuations: - **Innolight** - **Eoptolink** - **HGTech** - **GigaDevice** - **Shennan Circuits** [1][2]. - Current **2025E P/E ratios** for these stocks are around or below their historical average minus one standard deviation, indicating potential upside in share prices [2][5]. - Valuation scenarios suggest that despite recent rallies, the share prices remain skewed to the upside, with potential price targets based on various P/E multiples [5][7]. Company-Specific Insights HGTech - HGTech is a manufacturer of optical transceivers and telecom equipment. The company is expected to deliver on its bullish guidance in the upcoming 3Q24 results, which could lead to upward revisions in EPS expectations for 2025E [14][17]. GigaDevice - GigaDevice focuses on DRAM products. The near-term ASP outlook is weak due to inventory adjustments, but management's comments on market outlook for 4Q24 and 2025E are anticipated to provide clarity on share expansion and ASP outlook [15][21]. Shennan Circuits - The company has provided soft guidance for 3Q24, indicating weaker consumer-related product demand. Low investor expectations could create potential for positive surprises in results [15][26]. Innolight and Eoptolink - Strong 3Q profits are expected for both companies, but significant share price movements are unlikely unless there are upward revisions in demand outlook or new customer acquisitions [16][20]. Investment Thesis and Risks HGTech - The investment thesis is based on expansion into high-end optical transceivers, which is expected to drive margin improvement and net profit growth from 2024E to 2026E. Current valuations are attractive, trading at the lower end of historical ranges [17][18]. Eoptolink - Eoptolink is positioned to benefit from the ramp-up of 400G/800G optical transceivers, with a strong growth outlook. The stock trades below its historical P/E average, making it attractive [19][20]. GigaDevice - GigaDevice is expected to enter a new growth cycle driven by specialty DRAM expansion. The stock is trading below historical levels, presenting an attractive valuation [21][22]. Innolight - Innolight is the largest optical transceiver supplier in China, benefiting from AI/datacenter expansion. The stock trades at historical trough valuation levels, indicating a favorable risk-reward scenario [23][24]. Shennan Circuits - Shennan is a key PCB supplier expected to benefit from domestic AI infrastructure investments. The stock is trading at a discount to historical averages, making it attractive [26]. Key Risks - Common risks across the companies include: - Slower-than-expected ramp-up in product shipments - Geopolitical tensions affecting supply chains - Competitive pressures leading to pricing erosion and margin drops [18][22][25][26]. This summary encapsulates the essential insights and projections regarding the companies and the industry as discussed in the conference call.

Morgan Stanley September 24, 2024 04:01 AM GMT September 24, 2024 | --- | --- | --- | --- | --- | |---------------------------------------------------------------|-------|-------|-------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | North America Freight Transportation \nParcel Industry Update | | | | M ...

Summary of Conference Call Notes Company and Industry Overview - **Company**: Shinko Electric Industries Co., Ltd. (a subsidiary of Fujitsu Limited) - **Industry**: Semiconductor manufacturing and related products - **Context**: Discussion on the proposed acquisition of Shinko Electric by JICC-04, Ltd. through a tender offer as announced on December 12, 2023 [2][3] Key Points and Arguments Industry Trends - **Small-Cap Perspective**: Focus on tech-related subindustries, particularly semiconductor materials and equipment [4] - **Capex Risks**: Decline in capital expenditures for front-end processing semiconductor materials due to weaker demand in China and decreasing memory prices [5][5] - **Demand Dynamics**: Strong demand for middle/back-end processing semiconductor materials, particularly for cutting-edge packages and high-bandwidth memory (HBM) [5][5] - **Inventory Corrections**: Inventory corrections for semiconductor materials are largely completed, with increasing demand for materials aligned with semiconductor production volume [5][5] Sales and Orders - **Sales Trends**: Sales by region indicate a focus on China, with an estimated average weighting of 20% ± 5% depending on product type [5][5] - **DRAM Demand**: Significant growth in demand for materials related to DRAM as production increases, driven by growth in smartphones, servers, and PCs [5][5] - **NAND Technology**: Monitoring timelines for customer innovations in NAND technology, including ultra-low temperature etching and hybrid bonding [5][5] Financial Performance - **Shinko Electric Sales**: Plastic packaging sales for Shinko Electric showed fluctuations, with a notable decline of 34% in one quarter, followed by a recovery of 19% and 3% in subsequent quarters [14][15] - **Comparative Sales Data**: Various companies in the semiconductor sector showed diverse sales performance, with some experiencing significant growth while others faced declines [13][15] Market Challenges - **Regulatory Environment**: Need to monitor trends in anti-China regulations that could impact demand for consumer electronics [5][5] - **Automotive Demand**: Mixed signals in automotive demand by region and customer, indicating a complex market landscape [5][5] Additional Important Insights - **Stock Price Trends**: The report includes stock price trends for semiconductor equipment-related companies, indicating volatility and market reactions to industry changes [7][8][11] - **Future Outlook**: The overall sentiment in the semiconductor industry remains cautious, with a focus on adapting to changing market conditions and regulatory environments [5][5] This summary encapsulates the critical insights from the conference call, highlighting the current state and future outlook of Shinko Electric and the semiconductor industry.

Summary of J.P. Morgan's European Quantitative Strategy Conference Call Company and Industry - **Company**: J.P. Morgan - **Industry**: European Equity Markets and Quantitative Investment Strategies Key Points and Arguments 1. Current Market Sentiment and Economic Indicators - Global equity indices are near all-time highs, with bullish investor sentiment, although it is slightly declining from recent peaks [11][12] - Central banks are easing policies, and the US dollar is weakening, contributing to a favorable environment for small caps and value stocks [11][12] - Economic growth expectations are fragile, leading to consensus profit downgrades, suggesting a defensive sector stance may be necessary [11][12] 2. European Quant Macro Index (QMI) Insights - The European QMI indicates a 'Recovery' phase, with the index rising from a recent trough, although it remains in the bottom third of its historical range [11][12][28] - Three inputs are rising (changes in European bond yields, ECB money supply growth, SEK/USD exchange rate) while three are falling (German manufacturing confidence, OECD economic lead indicator, consensus global EPS revisions) [2][28] - The QMI's upward trend is expected to be sustainable over a 12-month view, but short-term downside risks are present [11][12][28] 3. Sector Performance Dynamics - Defensive sectors are outperforming cyclical sectors, which is atypical during a recovery phase [17][18] - Traditional defensive sectors such as Communication Services, Real Estate, Financials (Insurance), and Utilities are preferred, while cyclical sectors like Technology, Industrials, and Discretionary rank poorly [17][18] - The relationship between cyclical and defensive sectors is evolving, with defensive sectors potentially outperforming even as cyclical styles gain traction [17][18] 4. Investment Style Recommendations - J.P. Morgan recommends overweighting Value and Low Size (Small Caps) while underweighting Momentum, Quality, and Low Volatility [8][9] - The correlation between Value and Momentum is expected to turn negative, indicating a shift in investment strategy [40] - The analysis suggests that as the yield curve flattens, Value and high-risk stocks may benefit, while Growth stocks could underperform [21][24] 5. Risks and Considerations - There is a growing risk that high-quality stocks may become more volatile, particularly if the QMI continues to rise [30] - The potential for a reversal in long/short momentum strategies poses a risk to investors' portfolios [12][17] - The divergence between the QMI and equity versus bond returns has narrowed, raising concerns about the sustainability of equity performance relative to bonds [31] 6. Conclusion - The current market environment presents a complex landscape where traditional sector relationships are shifting, and defensive strategies may be warranted despite a nominal recovery phase [11][12][17] - Investors are advised to navigate carefully, focusing on sector and style selection as the macroeconomic backdrop evolves [44] This summary encapsulates the critical insights and recommendations from J.P. Morgan's conference call regarding the European equity market and quantitative strategies, highlighting the nuanced dynamics at play in the current investment landscape.

TSMC Conference Call Summary Company Overview - **Company**: TSMC (Taiwan Semiconductor Manufacturing Company) - **Ticker**: 2330.TW - **Industry**: Technology Semiconductors Key Points Capacity Expansion and Capital Expenditure - TSMC is increasing its capital expenditure (capex) estimate for 2025 from **US$35 billion to US$38 billion** due to strong demand in AI semiconductors and advanced packaging technologies [2][3][38] - The company plans to expand its CoWoS (Chip on Wafer on Substrate) capacity to **80k** by the end of 2025, pulling the expansion forward from 2026 [2][8] - TSMC's 3nm capacity is expected to grow from **90k** this year to **120k** next year, while 2nm capacity is projected to increase from **10k** to **50k** [3][20] Revenue Growth Projections - TSMC anticipates a **15-20% revenue CAGR** from 2024 to 2028, supported by strong AI semiconductor demand [2][4][7] - The company expects AI semiconductor revenue to contribute **20%** of its total revenue by 2027 [33] Market Demand and Customer Insights - TSMC is seeing robust demand for AI compute, particularly from Nvidia, which is driving the need for increased CoWoS capacity [2][6][8] - Intel is expected to contribute **US$8 billion** to TSMC in 2025, doubling its contribution from 2024 [7] Pricing Strategy and Gross Margin - TSMC has confirmed price hikes for AI semiconductors and CoWoS by **10%**, HPC by **6%**, and consumer products by **3%** [27] - The company aims to achieve a gross margin of over **55%** in 2025, with a gradual increase towards **60%** by 2028-2030 [27][38] Financial Metrics and Valuation - TSMC's price target has been raised from **NT$1,220** to **NT$1,280**, reflecting updated earnings estimates for 2025 and 2026 [2][38] - The company’s earnings per share (EPS) estimates for 2025 have been increased to **NT$54.79**, with a projected EPS of **NT$70.64** for 2026 [5][38] Competitive Positioning - TSMC is positioned as a long-term winner in the AI semiconductor space, with expectations that most AI chips will be manufactured using its leading-edge foundry services [33] - The company is focusing on maintaining its competitive edge through technology leadership and cost efficiency [20][27] Risks and Considerations - Potential risks include competition from other foundries and the impact of global semiconductor demand fluctuations [49] - TSMC's ability to manage costs and maintain margins amid rising capex and pricing pressures will be critical for sustaining growth [27][33] Additional Insights - TSMC's management has indicated that the company is in a fast growth stage, with strong capacity expansion and a focus on AI and HPC customers [4][6] - The semiconductor industry is currently experiencing a downcycle, but TSMC's defensive nature and quality are expected to provide resilience [6][48] This summary encapsulates the key insights from TSMC's recent conference call, highlighting the company's strategic initiatives, financial outlook, and market positioning within the semiconductor industry.

China Utilities | China September 24, 2024 12:18 AM GMT M Update Goldwind | Asia Pacific Announces new employee restricted A-share incentive plan Goldwind has announced a new restricted stock incentive plan, to grant no more than 42.25mn shares (1% of total shares outstanding) at a price of Rmb4.09/share in two batches (40.15mn/2.1mn shares in the first/reserved batch). The source is A- shares repurchased from the secondary market. • The first batch will be granted to 480 employees (incl. senior/middle mana ...

September 24, 2024 12:54 PM GMT M Asia Pacific Insight Podcast Asia Property Picks – Episode 20: Implications of Lower Rates for Asian Property In this 11-minute podcast, Praveen Choudhary discusses implications of falling interest rates for property markets and stocks with regional property analysts. Key Takeaways Why is nominal rate increase not an issue for Japan? Which Australian stocks will benefit most from having the highest debt, cheapest valuation, and/or improving fundamentals? Why will lower mort ...

September 24, 2024 07:30 AM GMT M Update Mid Small Cap/Non-Manufacturer | Japan | --- | --- | --- | |--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ...

North America Credit Research 24 September 2024 J P M O R G A N REIT Public Bond Covenants 2Q24 Master Cheat Sheet Our covenant database includes ~$253.5bn in $USD REIT public debt (see subtotals by sector below). Note that, through tenders, the amount outstanding is now ~$3.5bn less than the original face amount issued. Accounting for foreign-denominated debt (converted to $USD), we capture ~$286.1bn of bonds, including nearly $52.0bn maturing over the next two and a half years. In an attempt to simplify t ...