Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) - ADR / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) - ADR

<ul>
<li>UMC Results This Week; Insight Into Supply/Demand Environment for More Mature Semiconductor Segments</li>
<li>Nvidia and TSMC Announce Partnership in Silicon Photonics Technology -- Will Enable More Energy-Efficient AI</li>
<li>TSMC 4Q24 Results Signal Multi-Year Market Share Gains; Margin Strength; Sustainable Industry Growth </li>
</ul>


UMC Results This Week; Insight Into Supply/Demand Environment for More Mature Semiconductor Segments
Nvidia and TSMC Announce Partnership in Silicon Photonics Technology -- Will Enable More Energy-Efficient AI
TSMC 4Q24 Results Signal Multi-Year Market Share Gains; Margin Strength; Sustainable Industry Growth 


Taiwan Tech Weekly: UMC Results Ahead; Nvidia & TSMC Partner for Silicon Photonics Technology

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Cross Asset Strategy

<ul>
<li>Asian equities are at record valuation discount to that of US. Slightly lower earnings growth and ROE forecasts for Asia don't justify the steep discounts, we believe.</li>
<li>However, EPS estimates are a concern. Asia's consensus EPS estimate for 2025 has declined 9% over past 10 months, dragged down by China and Korea. USA's has remained virtually flat.</li>
<li>Based on our themes of continued AI spending, China's consumption recovery and "unloved India", our top picks remain TSMC, Tencent, Yum China, HDFC Bank and SK Hynix.</li>
</ul>


Asian equities are at record valuation discount to that of US. Slightly lower earnings growth and ROE forecasts for Asia don't justify the steep discounts, we believe.
However, EPS estimates are a concern. Asia's consensus EPS estimate for 2025 has declined 9% over past 10 months, dragged down by China and Korea. USA's has remained virtually flat.
Based on our themes of continued AI spending, China's consumption recovery and "unloved India", our top picks remain TSMC, Tencent, Yum China, HDFC Bank and SK Hynix.


Asian Equities: US Exceptionalism Vs Asian Valuation Allure

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lg-cns-co-ltd" target="_blank" data-smartkarma-citation="entities:35945:1" rel="noopener">LG CNS (LGCNSZ KS)</a> is looking to raise up to KRW 1,199bn (US$830m), valuing the company at KRW 6 trillion (US$4.15bn) at the top end of the IPO price range.</li>
<li>As a member of the IT sector, inclusion in the <a href="https://www.smartkarma.com/entities/korea-stock-exchange-kospi-200" target="_blank" data-smartkarma-citation="entities:26021:1" rel="noopener">KOSPI200 Index</a> will only take place via Fast Entry (near impossible) or as a large-scale company.</li>
<li>Inclusion in global indices could commence in September 2025 and will be easier if the identity of the pre-IPO minority shareholders is disclosed or if the strategic investors sell.</li>
</ul>



LG CNS (LGCNSZ KS) is looking to raise up to KRW 1,199bn (US$830m), valuing the company at KRW 6 trillion (US$4.15bn) at the top end of the IPO price range.
As a member of the IT sector, inclusion in the KOSPI200 Index will only take place via Fast Entry (near impossible) or as a large-scale company.
Inclusion in global indices could commence in September 2025 and will be easier if the identity of the pre-IPO minority shareholders is disclosed or if the strategic investors sell.


LG CNS IPO: Limited Float Pushes Back Passive Buying

Taiwan Tech Focused Senior Analyst

Patrick Liao

United Microelectron Sp Adr / Equity Bottom-Up

<ul>
<li>In 1Q25, there was a further improvement to -5% QoQ for UMC, and its gross margin is at around 26-28%.</li>
<li>The extra improvement is from Novatek Microelectronics Corp (3034 TT), which has also received an additional order from Vivo.   </li>
<li>The outlook remains unclear as Samsung Electronics (005930 KS) is facing uncertainties in 2025.</li>
</ul>


In 1Q25, there was a further improvement to -5% QoQ for UMC, and its gross margin is at around 26-28%.
The extra improvement is from Novatek Microelectronics Corp (3034 TT), which has also received an additional order from Vivo.   
The outlook remains unclear as Samsung Electronics (005930 KS) is facing uncertainties in 2025.


UMC (2303.TT; UMC.US): A Slightly Further Improvement 1Q25 Outlook

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>Revenue reached USD$26.88 billion (compared to guidance of 26.1-26.9 billion USD) / NTD$868.46 billion  (+14.3% QoQ, +38.8% YoY); Gross margin at 59%,within the guided range of 57-59%.</li>
<li>Revenue expected to be in the range of USD$25-25.8 billion (-5.5% QoQ) impacted by seasonal factors, offset by AI demand. Gross margin: 57-59%.   </li>
<li>AI revenue is expected to double in 2025. With the advancement of AI technologies, the company anticipates mid-40s CAGR for AI accelerators within a five-year period (2024-2029),</li>
</ul>


Revenue reached USD$26.88 billion (compared to guidance of 26.1-26.9 billion USD) / NTD$868.46 billion  (+14.3% QoQ, +38.8% YoY); Gross margin at 59%,within the guided range of 57-59%.
Revenue expected to be in the range of USD$25-25.8 billion (-5.5% QoQ) impacted by seasonal factors, offset by AI demand. Gross margin: 57-59%.   
AI revenue is expected to double in 2025. With the advancement of AI technologies, the company anticipates mid-40s CAGR for AI accelerators within a five-year period (2024-2029),


TSMC (2330.TT; TSM.US): 4Q24 Results and 1Q25 Guidance; CoWoS Grows 45% CAGR; Setup of 10 Fabs WW.

South Korea

SK Hynix Inc. provides products and services for the electronic components industry. The Company manufactures semiconductors, such as dynamic random access memory (DRAM), NAND flash memory, and static random access memory (SRAM) chips.

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SK Hynix (000660 KS)

Taiwan Tech Weekly: UMC Results Ahead; Nvidia & TSMC Partner for Silicon Photonics Technology

UMC will report results this week. Nvidia and TSMC partnership in silicon photonics to tackle AI's high energy problem.

Vincent Fernando, CFA

Asian Equities: US Exceptionalism Vs Asian Valuation Allure

Asia's slightly lower EPS growth & ROE than US's don't justify the huge discount the former trades at. EPS est decline is a worry though. Our top...

Manishi Raychaudhuri

LG CNS IPO: Limited Float Pushes Back Passive Buying

The subscription period runs from 21-22 January. Shares will reportedly be offered at KRW 61900, the top end of the IPO range. Demand was said to...

Brian Freitas

UMC (2303.TT; UMC.US): A Slightly Further Improvement 1Q25 Outlook

UMC sees further improvement in 1Q25 with -5% QoQ, boosted by Novatek Microelectronics Corp and Vivo order, while Samsung Electronics faces...

Patrick Liao

TSMC (2330.TT; TSM.US): 4Q24 Results and 1Q25 Guidance; CoWoS Grows 45% CAGR; Setup of 10 Fabs WW.

Company's revenue exceeded guidance at USD$26.88 billion, with AI revenue expected to double by 2025 and mid-40s CAGR for AI accelerators in the...

Patrick Liao

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Taiwan Tech Weekly: UMC Results Ahead; Nvidia & TSMC Partner for Silicon Photonics Technology

​UMC will report results this week. Nvidia and TSMC partnership in silicon photonics to tackle AI's high energy problem.

Vincent Fernando, CFA

Asian Equities: US Exceptionalism Vs Asian Valuation Allure

​Asia's slightly lower EPS growth & ROE than US's don't justify the huge discount the former trades at. EPS est decline is a worry though. Our top...

Manishi Raychaudhuri

LG CNS IPO: Limited Float Pushes Back Passive Buying

The subscription period runs from 21-22 January. Shares will reportedly be offered at KRW 61900, the top end of the IPO range. Demand was said to...

Brian Freitas

UMC (2303.TT; UMC.US): A Slightly Further Improvement 1Q25 Outlook

​UMC sees further improvement in 1Q25 with -5% QoQ, boosted by Novatek Microelectronics Corp and Vivo order, while Samsung Electronics faces...

Patrick Liao

TSMC (2330.TT; TSM.US): 4Q24 Results and 1Q25 Guidance; CoWoS Grows 45% CAGR; Setup of 10 Fabs WW.

​Company's revenue exceeded guidance at USD$26.88 billion, with AI revenue expected to double by 2025 and mid-40s CAGR for AI accelerators in the...

Patrick Liao

UMC will report results this week. Nvidia and TSMC partnership in silicon photonics to tackle AI's high energy problem.

Asia's slightly lower EPS growth & ROE than US's don't justify the huge discount the former trades at. EPS est decline is a worry though. Our top...

UMC sees further improvement in 1Q25 with -5% QoQ, boosted by Novatek Microelectronics Corp and Vivo order, while Samsung Electronics faces...

Company's revenue exceeded guidance at USD$26.88 billion, with AI revenue expected to double by 2025 and mid-40s CAGR for AI accelerators in the...