Summary of the Investor Presentation on Greater China Technology Hardware Industry Overview - The presentation focuses on the Greater China Technology Hardware sector, particularly in the context of AI demand leading into 2026 [3][4]. Key Insights - **NVIDIA Supply Chain**: The outlook for downstream rack output has become more optimistic post-Computex, with expectations of approximately 34,000 rack builds for 2025 and at least 60,000 for 2026 [3]. - **Monthly Rack Output**: Major Original Design Manufacturers (ODMs), especially Hon Hai, are experiencing an increase in monthly rack output [3]. - **GB300 Delivery**: The GB300 is on track for delivery by the end of Q3 or early Q4 [3]. - **PC Market Trends**: The PC market is anticipated to see sub-seasonal demand in the second half of the year, influenced by pull-forward demand in the first half if end demand does not significantly improve [3]. - **PC OEM Expectations**: Original Equipment Manufacturers (OEMs) are currently projecting a 2-5% year-over-year growth in PC shipments for 2025 [3]. - **General Server Market**: Strong momentum in the first half of the year is expected to decelerate as the market transitions into the second half [3]. Stock Recommendations - **ODM Preferences**: The preferred order of ODMs is Hon Hai > Wiwynn > Wistron > Quanta [3]. - **AI Component Plays**: Gold Circuit is highlighted as a favorable investment in AI components [3]. - **Enterprise vs. Consumer PCs**: Preference is given to enterprise PC exposure over consumer PCs, with recommended stocks being Lenovo > Asustek > Acer [3]. - **Less Bearish Outlook**: Unimicron is noted as having a less bearish outlook compared to others [3]. Valuation Comparisons - A detailed valuation comparison of various companies within the hardware technology sector is provided, including metrics such as closing price, price target, market cap, EPS, P/E ratio, P/B ratio, and EV/EBITDA for the year 2025 and 2026 [4]. - Notable companies include: - **Compal**: Closing price of 28.10, with a market cap of 4,037 million and a P/E ratio of 12.8 for 2025 [4]. - **Acer**: Closing price of 29.95, with a market cap of 15,429 million and a P/E ratio of 15.3 for 2025 [4]. - **Lenovo**: Closing price of 11.31, with a market cap of 17,584 million and a P/E ratio of 11.1 for 2025 [4]. Additional Insights - The report emphasizes the potential conflicts of interest due to Morgan Stanley's business relationships with covered companies, advising investors to consider this when making investment decisions [1][2]. This summary encapsulates the critical points from the investor presentation, highlighting the current state and future outlook of the Greater China Technology Hardware industry, along with specific stock recommendations and valuation metrics.