Research from Quam Securities, Quam Securities

Quam Securities Research

Research from Quam Securities

Quam Securities

Since its inception in 1986, Quam Securities Limited (Quam Securities) has grown to become one of the few mid-tier securities brokerages in Hong Kong with global execution capabilities for both private and institutional clients. It boasts a well-established network in Greater China including Taiwan and in major world markets through the Global Alliance Partners (GAP). Quam Securities is well-positioned not only to harness and drive business within the China Tonghai International Financial Limited but also between China and the world markets.

Thematic (Sector/Industry)

<div><div><div><div><ul><li>Despite shipment continued to fall y/y, all major markets experienced deceleration in decline.</li><li>DMs like US &amp; W Europe did better with more material deceleration, which helped Apple to solidify its market position.</li><li>EMs remained weak with APAC (ex-Jap &amp; China), CEE and MEA falling 17-20% y/y, which was a bigger headache to the Android camp, especially the Chinese players, among which, Xiaomi had relatively poorer performance.</li></ul></div></div></div></div>

Despite shipment continued to fall y/y, all major markets experienced deceleration in decline.DMs like US &amp; W Europe did better with more material deceleration, which helped Apple to solidify its market position.EMs remained weak with APAC (ex-Jap &amp; China), CEE and MEA falling 17-20% y/y, which was a bigger headache to the Android camp, especially the Chinese players, among which, Xiaomi had relatively poorer performance.

Smartphone – Global Vs China Decelerated Downtrends

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

Shenton Research

Shenton Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Index Rebalance

<ul>
<li>We review the proposed HS TECH rule changes and screen an early beneficiary list for the December 2026 rebalance.</li>
<li>Our screening returns 20 ADD candidates, 10 based on market value and 10 based on revenue growth.</li>
<li>We expect all 30 current constituents are retained. 10 MV based stocks to be mechanical and sales growth for 10 growth based stocks to be cut off at 30%.</li>
</ul>


We review the proposed HS TECH rule changes and screen an early beneficiary list for the December 2026 rebalance.
Our screening returns 20 ADD candidates, 10 based on market value and 10 based on revenue growth.
We expect all 30 current constituents are retained. 10 MV based stocks to be mechanical and sales growth for 10 growth based stocks to be cut off at 30%.


HS TECH Index Consultation: Rules and Beneficiary Analysis

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Apple reported a FY1Q (CY4Q22) with EPS of US$1.88 (-10% YoY) and revenue of US$117.2bn (-5% YoY), which are 3.1% and 3.3% below consensus, largely due to weak macro and iPhone 14 Pro/Max supply chain constraints on COVID-19 in China.</li><li>Looking into FY2Q23, mgmt. expected revenue to perform similarly to FY1Q23 (-5% YoY) with iPhone to accelerate and Mac/iPad to decline double digit YoY.</li><li>Given the challenging revenue outlook, we expect near-term profit taking on slower iPhone/Mac/iPad, but we remain positive on Apple supply chain over Android camp in 2H23E, given iPhone replacement cycle and share gain from Samsung/Android camp. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Apple reported a FY1Q (CY4Q22) with EPS of US$1.88 (-10% YoY) and revenue of US$117.2bn (-5% YoY), which are 3.1% and 3.3% below consensus, largely due to weak macro and iPhone 14 Pro/Max supply chain constraints on COVID-19 in China.Looking into FY2Q23, mgmt. expected revenue to perform similarly to FY1Q23 (-5% YoY) with iPhone to accelerate and Mac/iPad to decline double digit YoY.Given the challenging revenue outlook, we expect near-term profit taking on slower iPhone/Mac/iPad, but we remain positive on Apple supply chain over Android camp in 2H23E, given iPhone replacement cycle and share gain from Samsung/Android camp. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Technology Sector – Apple FY1Q23 Miss on Macro and Supply Chain Issues

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>2023 gameplan remains unchanged; we see limited upside from here for ACWI-US, and we expect a rangebound year of trading on ACWI-US with $93 capping upside and $75-77 capping downside</li>
<li>We also remain overweight Europe/UK, we want to add exposure on pullbacks to China/Hong Kong/EM, and overweight non-U.S. equities (MSCI ACWI ex-US) relative to MSCI ACWI</li>
<li>We highlight buy ideas within Technology, Communications, and Consumer Discretionary. The UK/Europe and Hong Kong/China continue to make up the majority of our buy recommendations</li>
</ul>


2023 gameplan remains unchanged; we see limited upside from here for ACWI-US, and we expect a rangebound year of trading on ACWI-US with $93 capping upside and $75-77 capping downside
We also remain overweight Europe/UK, we want to add exposure on pullbacks to China/Hong Kong/EM, and overweight non-U.S. equities (MSCI ACWI ex-US) relative to MSCI ACWI
We highlight buy ideas within Technology, Communications, and Consumer Discretionary. The UK/Europe and Hong Kong/China continue to make up the majority of our buy recommendations


Major Top on U.S. Dollar; Overweight Non-U.S. And Europe/UK; Buys in Tech, Comm., Discretionary

<ul><li>IDC released 4Q22 global smartphone shipment with 18% YoY decline (vs -9.3% in 3Q22), mainly due to weak consumer demand, rising inflation and China COVID-19 impact.</li><li>For 2022, global smartphone shipment fell 11% YoY to 1.21bn unit, marking the lowest annual shipment since 2013.</li><li>By brand, Apple/ Samsung/Xiaomi/Oppo/Vivo declined 15%/16%/26%/16%/19% YoY in 4Q22.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

IDC released 4Q22 global smartphone shipment with 18% YoY decline (vs -9.3% in 3Q22), mainly due to weak consumer demand, rising inflation and China COVID-19 impact.For 2022, global smartphone shipment fell 11% YoY to 1.21bn unit, marking the lowest annual shipment since 2013.By brand, Apple/ Samsung/Xiaomi/Oppo/Vivo declined 15%/16%/26%/16%/19% YoY in 4Q22.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

China Technology - 4Q22 Global Smartphone Shipment Down 18% YoY

China

AAC Technologies is a leading provider of sensory experience solutions for smart devices. The company designs, develops, manufactures, and distributes miniaturized components, including acoustics products, haptic devices, optical lenses, camera modules, and micro electro-mechanical systems (MEMS). It primarily serves the consumer electronics market, with an expanding presence in intelligent vehicles, AR/VR, robotics, and IoT sectors. AAC Technologies was founded in 1993 and is headquartered in Shenzhen, People's Republic of China.

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AAC Technologies (2018 HK)

Smartphone – Global Vs China Decelerated Downtrends

Despite shipment continued to fall y/y, all major markets experienced deceleration in decline. DMs like US & W Europe did better with more material...

Quam Securities

HS TECH Index Consultation: Rules and Beneficiary Analysis

HSIL announced HS TECH consultation on proposed rule changes. In this note, we analysis the proposed new rules changes and preview the potential...

Ke Yan, CFA, FRM

China Technology Sector – Apple FY1Q23 Miss on Macro and Supply Chain Issues

Apple reported a FY1Q (CY4Q22) with EPS of US$1.88 (-10% YoY) and revenue of US$117.2bn (-5% YoY), which are 3.1% and 3.3% below consensus

CMB International

Major Top on U.S. Dollar; Overweight Non-U.S. And Europe/UK; Buys in Tech, Comm., Discretionary

The $DXY broke below 5-year support at $103, signaling a major top in place. This is bullish for risk assets, and is another sign suggesting the...

Vermilion Research

China Technology - 4Q22 Global Smartphone Shipment Down 18% YoY

IDC released 4Q22 global smartphone shipment with 18% YoY decline (vs -9.3% in 3Q22), mainly due to weak consumer demand, rising inflation and...

CMB International

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