Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

SMIC (Semiconductor Manufacturing International Corp) / Equity Bottom-Up

SMIC (Semiconductor Manufacturing International Corp) (981 HK)

SMIC (Semiconductor Manufacturing International Corp)

<ul>
<li>The HSTECH index is trading higher on higher breadth and momentum in January, up 6% so far.  Analysts project an upside of 23% over 12 months.</li>
<li>China's semiconductor sector is advancing this year from AI enthusiasm and accelerated localization in the chip industry.  <a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-international-corp-smic" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">Semiconductor Manufacturing International Corp (SMIC) (981 HK)</a> shares have benefited from this trend.</li>
<li>
<a href="https://www.smartkarma.com/entities/sunny-optical-technology-group" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical Technology Group (2382 HK)</a> benefits from China's announcement that it will subsidize more consumer products, including smartphones and new vehicles.
</li>
</ul>


The HSTECH index is trading higher on higher breadth and momentum in January, up 6% so far.  Analysts project an upside of 23% over 12 months.
China's semiconductor sector is advancing this year from AI enthusiasm and accelerated localization in the chip industry.  Semiconductor Manufacturing International Corp (SMIC) (981 HK) shares have benefited from this trend.

Sunny Optical Technology Group (2382 HK) benefits from China's announcement that it will subsidize more consumer products, including smartphones and new vehicles.



The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (January 25)

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>FIT Hon Teng will report 4Q24/FY24E results in mid-March.</li><li>We estimate FY24E revenue/net profit of US$4,555mn/179mn (+9%/+39% YoY), and 4Q24E revenue/net profit of US$1,313mn/78.4mn (+5%/+6% YoY), largely in-line with guidance/consensus.</li><li>Looking into 2025, we are positive on FIT as the major beneficiary of GB200/300 AI server ramp-up and order wins in CPU sockets, liquid cooling components and NVLink copper backplane.</li></ul>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.

FIT Hon Teng will report 4Q24/FY24E results in mid-March.We estimate FY24E revenue/net profit of US$4,555mn/179mn (+9%/+39% YoY), and 4Q24E revenue/net profit of US$1,313mn/78.4mn (+5%/+6% YoY), largely in-line with guidance/consensus.Looking into 2025, we are positive on FIT as the major beneficiary of GB200/300 AI server ramp-up and order wins in CPU sockets, liquid cooling components and NVLink copper backplane.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.

FIT Hon Teng (6088 HK) - Robust Earnings Recovery; Expect AI Server Momentum to Drive Re-Rating

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

DZT Research

DZT 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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of January 3rd.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for SMIC, ICBC, China Mobile, Xiaomi, CNOOC, Meituan, Kuaishou Technology.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of January 3rd.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for SMIC, ICBC, China Mobile, Xiaomi, CNOOC, Meituan, Kuaishou Technology.


Hong Kong Connect Flows (Jan 3rd): SMIC, ICBC, China Mobile, Xiaomi, CNOOC, Meituan

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

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) (TSM US)

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>TSMC’s N2 Progress Sparks Buzz Amid Yield Improvement Rumors; If True Then 2nm Will Become Even More Successful Than 3nm</li>
<li>Hon Hai &amp; TASA Showcase Homegrown Space Technologies Including an Alternative to Starlink</li>
<li>Himax: Buyback Program Lifts Shares; Auto Display Controllers, AR Displays &amp; WLO for AI Progressing </li>
</ul>


TSMC’s N2 Progress Sparks Buzz Amid Yield Improvement Rumors; If True Then 2nm Will Become Even More Successful Than 3nm
Hon Hai &amp; TASA Showcase Homegrown Space Technologies Including an Alternative to Starlink
Himax: Buyback Program Lifts Shares; Auto Display Controllers, AR Displays &amp; WLO for AI Progressing 


Taiwan Tech Weekly: TSMC 2NM Yield Jump Rumors; Seeing Taiwan's Starlink Alternative Firsthand in KS

Tencent Music Entertainment / Equity Bottom-Up

<ul>
<li>Hong Kong market sectors outperforming since the stimulus in September are Consumer Discretionary and Healthcare as Utilities, Telecom and Energy lag.</li>
<li>
<a href="https://www.smartkarma.com/entities/crrc-corp-ltd-461535b2-37ac-4589-b4d9-8b71c06c43b8" target="_blank" data-smartkarma-citation="entities:124:1" rel="noopener">CRRC Corp Ltd H (1766 HK)</a> gets BUY recommendations as its results point to continued strength in the rail equipment sector with passenger volume surging.
</li>
<li>
<a href="https://www.smartkarma.com/entities/tencent-music-entertainment-group" target="_blank" data-smartkarma-citation="entities:36601:1" rel="noopener">Tencent Music Entertainment Group (1698 HK)</a> reported solid results as it shifts to a pay-to-stream subscription model. <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> had a blowout quarter with EV sales surging.
</li>
</ul>


Hong Kong market sectors outperforming since the stimulus in September are Consumer Discretionary and Healthcare as Utilities, Telecom and Energy lag.

CRRC Corp Ltd H (1766 HK) gets BUY recommendations as its results point to continued strength in the rail equipment sector with passenger volume surging.


Tencent Music Entertainment Group (1698 HK) reported solid results as it shifts to a pay-to-stream subscription model. Xiaomi Corp (1810 HK) had a blowout quarter with EV sales surging.



BUY/SELL/HOLD: Hong Kong Stock Updates (NOVEMBER 18)

Taiwan

FIT Hon Teng Limited designs, develops, produces, and sells interconnect solutions and related products, including electronic and optoelectronic connectors, antennas, acoustic components, cables, and modules. The company serves industries such as communications infrastructure, consumer electronics, mobile devices, automotive, industrial, and medical. It was established in 2013 and is headquartered in New Taipei City, Taiwan.

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FIT Hon Teng (6088 HK)

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (January 25)

HSTECH advances with good market breadth in January. SMIC is benefiting from AI advances as well as the localization trend in semi industry. ...

David Mudd