2025-05-06 04:25Summary of Conference Call Notes Industry Overview - Industry: Technology and Communications in China - Key Focus Areas: Tariff impacts on Apple and Nvidia supply chains, China's semiconductor localization, AI development, and Xiaomi's market position Key Points and Arguments Tariff Impact - Investors discussed the impact of reciprocal tariffs announced on April 2, focusing on Apple and Nvidia supply chains [1][2] - The majority of iPhones for the US market will be shipped from India, while other iOS devices will come from Vietnam, indicating a shift in supply chain dynamics [2][3] - Nvidia's supply chain is largely compliant with USMCA, making tariff impacts manageable [2][3] - Investors believe that tariffs are primarily borne by customers rather than suppliers, with US manufacturing costs significantly higher than those in China or Southeast Asia [3][4] China’s Retaliatory Tariffs - China announced a 34% retaliatory tariff on all US imports on April 4, which was later increased to 125% on April 11 [4][5] - This move is expected to disadvantage US integrated device manufacturers (IDMs) like Intel and Texas Instruments while benefiting domestic semiconductor companies in China [5][6] - Concerns about the localization progress in automotive and industrial sectors were raised, with consumer electronics seen as easier to replace [6] AI Chain Developments - Global investors expect the H20 ban to be implemented later in Q2 2025, which poses risks to China's AI capital expenditure [7] - There is a noted decline in investor interest in the AI supply chain, particularly in optical transceivers and data centers [7] - Upstream components like PCBs are expected to have better earnings support compared to downstream infrastructure plays due to ongoing delivery delays [7] Xiaomi's Market Position - Foreign investors are less concerned about Xiaomi's recent car crash incident, viewing it as a key pick due to its lack of US tariff exposure [8][9] - Some investors added positions in Xiaomi when shares pulled back to a 20x 2025 P/E ratio, with expectations of range-bound trading around 25x [8][9] - Despite rising memory spot prices, the overall demand for global consumer electronics is not strong, mitigating short-selling risks [9] Smartphone Market Insights - There are doubts regarding the launch schedule of the foldable iPhone due to past delays, but visibility for a 2H26 launch is considered higher [10] - Concerns about muted smartphone shipments in China for 2025 were expressed, with potential handset subsidies anticipated before major product launches [10] Software Sector - European investors showed more interest in Chinese software companies compared to US investors, with Kingdee identified as having strong fundamentals and AI monetization opportunities [11] Other Important Insights - The interest in Nvidia's supply chain and optical transceivers has decreased since previous marketing trips, indicating a shift in investor focus [1][2] - The potential for another round of handset subsidies in China could stimulate demand, particularly around major shopping festivals [10] - The performance of companies like Cowell, AAC, and BYD in the Apple supply chain is highlighted, with Cowell noted for its high earnings visibility [3][10]