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

Himax Technologies Inc Adr / Equity Bottom-Up

<ul>
<li>Himax shares have been in downtrend recently, falling 20% since the end of June vs. Novatek up 12%. We met with the Himax for an update.</li>
<li>Himax at historically very cheap level relative to Novatek, both are exposed to similar display end-markets. Himax trades at just 1x sales on an absolute basis.</li>
<li>We have a Structural Long view for both stocks, however from an arb perspective see a Long Himax vs. Short Novatek trade opportunity given the large share price divergence.</li>
</ul>


Himax shares have been in downtrend recently, falling 20% since the end of June vs. Novatek up 12%. We met with the Himax for an update.
Himax at historically very cheap level relative to Novatek, both are exposed to similar display end-markets. Himax trades at just 1x sales on an absolute basis.
We have a Structural Long view for both stocks, however from an arb perspective see a Long Himax vs. Short Novatek trade opportunity given the large share price divergence.


Himax Vs. Novatek Long/Short: Management Meeting; Himax Historically Cheap

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

TSMC (Taiwan Semiconductor Manufacturing) - ADR

<ul>
<li>India Supply Chain Rising -- Hon Hai is helping Apple launch with India-made iPhone 15's on Day 1. These days, Apple likely wants to diversify away from China even faster.</li>
<li>ARM IPO prices at high end of range, is backed by TSMC, Apple, Nvidia, Samsung, Intel.</li>
<li>We downgrade Mediatek: After rally, beware of Huawei/SMIC chip capabilities causing market to realize Mediatek could lose market share.</li>
</ul>


India Supply Chain Rising -- Hon Hai is helping Apple launch with India-made iPhone 15's on Day 1. These days, Apple likely wants to diversify away from China even faster.
ARM IPO prices at high end of range, is backed by TSMC, Apple, Nvidia, Samsung, Intel.
We downgrade Mediatek: After rally, beware of Huawei/SMIC chip capabilities causing market to realize Mediatek could lose market share.


Taiwan Tech Weekly: Apple Accelerating to India; ARM IPO; Huawei Mediatek Market Risk; Intel AI PCs

<ul>
<li>Hon Hai beat expecations by nearly 30% but reduced 2023E sales guidance. However, the company's AI server business is expected to take market share and its EV business is developing.</li>
<li>Asustek management provided some clarity on when AI PCs might turn from dream into reality -- 3Q24E is when the company believes they will contribute significantly to sales volume.</li>
<li>Himax reported some improvement in demand from China beleaguered automotive industry and said it expects its dominant global market position for automotive display drivers to continue.</li>
</ul>


Hon Hai beat expecations by nearly 30% but reduced 2023E sales guidance. However, the company's AI server business is expected to take market share and its EV business is developing.
Asustek management provided some clarity on when AI PCs might turn from dream into reality -- 3Q24E is when the company believes they will contribute significantly to sales volume.
Himax reported some improvement in demand from China beleaguered automotive industry and said it expects its dominant global market position for automotive display drivers to continue.


Taiwan Tech Weekly: Hon Hai AI Servers Taking Share, Asus Specifies When AI PCs Will Drive Market

<ul>
<li>Himax reported 2Q23 results -- Showing a previously-guided margin drop due to the one-off impact of the exit from long-term capacity commitments.</li>
<li>Positive developments -- Inventory levels improved further, China's automotive industry demand is rebounding from lows, and the company should maintain its already-dominant market share in automotive display drivers.</li>
<li>Long Himax -- Himax continues to represent structural exposure to dramatically increasing display content in vehicles. The stock's previous all-time high is double the current level.</li>
</ul>


Himax reported 2Q23 results -- Showing a previously-guided margin drop due to the one-off impact of the exit from long-term capacity commitments.
Positive developments -- Inventory levels improved further, China's automotive industry demand is rebounding from lows, and the company should maintain its already-dominant market share in automotive display drivers.
Long Himax -- Himax continues to represent structural exposure to dramatically increasing display content in vehicles. The stock's previous all-time high is double the current level.


Himax: Sees Rebound in China Automotive Display Demand, Expects Dominant Market Share to Continue

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>U.S. has announced new bans on PE and VC investment into key Chinese tech industries.</li>
<li>Elan Microelectronics, ChipMOS reported good results, two longs to consider as we still see upside.</li>
<li>Apple earnings short-term trades update -- We're closing out both trades, one at a loss and one roughly flat.</li>
</ul>


U.S. has announced new bans on PE and VC investment into key Chinese tech industries.
Elan Microelectronics, ChipMOS reported good results, two longs to consider as we still see upside.
Apple earnings short-term trades update -- We're closing out both trades, one at a loss and one roughly flat.


Taiwan Tech Weekly: U.S. Announces New Bans on Investment into Chinese High Tech Industries

Taiwan

Himax Technologies, Inc. designs and manufactures integrated circuits.  The Company produces liquid crystal displays (LCD).

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Himax Technologies Inc Adr (HIMX US)

Himax Vs. Novatek Long/Short: Management Meeting; Himax Historically Cheap

We have a Structural Long view for both stocks, however from an arb perspective see a Long Himax vs. Short Novatek trade opportunity given the...

Vincent Fernando, CFA

Taiwan Tech Weekly: Apple Accelerating to India; ARM IPO; Huawei Mediatek Market Risk; Intel AI PCs

ARM IPO prices at high end of range, is backed by TSMC, Apple, Nvidia, Samsung, Intel. Apple is likely accelerating plans to shift its supply chain...

Vincent Fernando, CFA

Taiwan Tech Weekly: U.S. Announces New Bans on Investment into Chinese High Tech Industries

Also, Elan Microelectronics and ChipMOS reported strong results. The two companies represent two Longs to consider, we still see upside.

Vincent Fernando, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Himax Vs. Novatek Long/Short: Management Meeting; Himax Historically Cheap

We have a Structural Long view for both stocks, however from an arb perspective see a Long Himax vs. Short Novatek trade opportunity given the...

Vincent Fernando, CFA

Taiwan Tech Weekly: Apple Accelerating to India; ARM IPO; Huawei Mediatek Market Risk; Intel AI PCs

ARM IPO prices at high end of range, is backed by TSMC, Apple, Nvidia, Samsung, Intel. Apple is likely accelerating plans to shift its supply chain...

Vincent Fernando, CFA

Taiwan Tech Weekly: Hon Hai AI Servers Taking Share, Asus Specifies When AI PCs Will Drive Market

Also -- According to media reports, Apple has bought all of TSMC's leading-edge 3nm capacity and may have exclusivity for this 3nm production...

Vincent Fernando, CFA

Himax: Sees Rebound in China Automotive Display Demand, Expects Dominant Market Share to Continue

Long Himax -- Himax continues to represent structural exposure to dramatically increasing display content in vehicles. The stock's previous all...

Vincent Fernando, CFA

Taiwan Tech Weekly: U.S. Announces New Bans on Investment into Chinese High Tech Industries

Also, Elan Microelectronics and ChipMOS reported strong results. The two companies represent two Longs to consider, we still see upside.

Vincent Fernando, CFA