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

Hon Hai Precision Industry / Equity Bottom-Up

<ul>
<li>Hon Hai shares have hit a new all-time high and have just risen past our target price of NT$155, surging after investors flocked to Hon Hai on AI news.</li>
<li>Hon Hai showcased two key technologies at Nvidia's GTC conference last week: Nvidia-based AI servers with liquid cooling systems and an AI autonomous driving controller using Nvidia's Orin X processor.</li>
<li>Hon Hai's sharp rally appears to have partly been caused by a short squeeze; While we like the long-term fundamentals and increased TP to NT$170, Hon Hai appears near-term overbought.</li>
</ul>


Hon Hai shares have hit a new all-time high and have just risen past our target price of NT$155, surging after investors flocked to Hon Hai on AI news.
Hon Hai showcased two key technologies at Nvidia's GTC conference last week: Nvidia-based AI servers with liquid cooling systems and an AI autonomous driving controller using Nvidia's Orin X processor.
Hon Hai's sharp rally appears to have partly been caused by a short squeeze; While we like the long-term fundamentals and increased TP to NT$170, Hon Hai appears near-term overbought.


Hon Hai (Foxconn): After the 50% Surge, Where Can It Go From Here?

<ul>
<li>Hon Hai's 4Q23 profit beat consensus and management has become more bullish on 2024E revenue thanks to demand for AI servers.</li>
<li>Guided 40% YoY growth expected for AI servers; Separately, Hon Hai reportedly could have won a major AI server order from HP Enterprise according to Digitimes.</li>
<li>Hon Hai shares are finally moving; We see room for continued upside based on re-rating of the company's valuation. Positive news flow potential through Nvidia's GTC conference next week.</li>
</ul>


Hon Hai's 4Q23 profit beat consensus and management has become more bullish on 2024E revenue thanks to demand for AI servers.
Guided 40% YoY growth expected for AI servers; Separately, Hon Hai reportedly could have won a major AI server order from HP Enterprise according to Digitimes.
Hon Hai shares are finally moving; We see room for continued upside based on re-rating of the company's valuation. Positive news flow potential through Nvidia's GTC conference next week.


Hon Hai: Beat & Raise; Further Valuation Upside; AI Server Product Announcements Next Week

<ul>
<li>Hon Hai beat expectations yesterday when it reported thanks to higher than expected margins. Gross margin rose to its highest level since 2018, hitting 6.7%.</li>
<li>The company has maintained its 2025E 10% gross margin target and implied that 2024 will see significant margin improvement as new higher margin businesses ramp up revenue contribution.</li>
<li>Two key market concerns: News of Chinese government investigation and political risk given Mr. Gou running for president. Company said operations continue as normal. Hon Hai remains a Structural Long.</li>
</ul>


Hon Hai beat expectations yesterday when it reported thanks to higher than expected margins. Gross margin rose to its highest level since 2018, hitting 6.7%.
The company has maintained its 2025E 10% gross margin target and implied that 2024 will see significant margin improvement as new higher margin businesses ramp up revenue contribution.
Two key market concerns: News of Chinese government investigation and political risk given Mr. Gou running for president. Company said operations continue as normal. Hon Hai remains a Structural Long.


Hon Hai's Margin Expansion Story Finally Starting to Be Realized? Results Imply Yes

Tracking developments across tech supply chains, Tech Supply Chain Tracker

Tech Supply Chain Tracker

Tracking developments across tech supply chains

<ul><li>Samsung SDI exhibits confidence in future growth and innovation by increasing investments despite weak 1Q24 results.</li><li>UnaBiz boosts Sigfox 0G Technology by reducing device energy usage by up to 18 times, enhancing efficiency.</li><li>Sharp considers establishing a display plant in India, potentially boosting the country's electronics manufacturing sector.</li></ul>

Samsung SDI exhibits confidence in future growth and innovation by increasing investments despite weak 1Q24 results.UnaBiz boosts Sigfox 0G Technology by reducing device energy usage by up to 18 times, enhancing efficiency.Sharp considers establishing a display plant in India, potentially boosting the country's electronics manufacturing sector.

Tech Supply Chain Tracker (06-May-2024): Samsung SDI boosts investment despite weak 1Q24.

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the changes in foreign holdings of TWSE Stocks as of May 3rd which has an aggregated holding worth USD3,897.7bn.</li>
<li>We estimate that foreign flows to be inflows of USD3,975mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.</li>
<li>We highlight foreign changes in TSMC, Hon Hai, Delta Elec, Yageo, Quanta Computer, Alchip Tech, King Yuan Elec, Wt, Accton Tech, Powertech.</li>
</ul>


We analyzed the changes in foreign holdings of TWSE Stocks as of May 3rd which has an aggregated holding worth USD3,897.7bn.
We estimate that foreign flows to be inflows of USD3,975mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
We highlight foreign changes in TSMC, Hon Hai, Delta Elec, Yageo, Quanta Computer, Alchip Tech, King Yuan Elec, Wt, Accton Tech, Powertech.


TWSE Foreign Holding Weekly (May 3rd): TSMC, Hon Hai, Delta Elec, Yageo, Quanta Computer, Alchip

Taiwan

Hon Hai Precision Industry Co., Ltd. provides electronic manufacturing services for computers, communications, and consumer electronic products.  The Company's business operations include desktop and notebook PC assembly, connector production, cable assembly, PCB assembly, handset manufacturing, networking equipment, and other consumer electronic devices manufacturing.

Hon Hai Precision Industry (2317 TT)

Hon Hai (Foxconn): After the 50% Surge, Where Can It Go From Here?

Hon Hai shares surged to new all-time high after showcasing AI technologies at Nvidia's GTC conference. We believe a short squeeze may have been...

Vincent Fernando, CFA

Hon Hai: Beat & Raise; Further Valuation Upside; AI Server Product Announcements Next Week

Hon Hai's delivers strong 4Q23 profit and bullish outlook on 2024 revenue driven by demand for AI servers. Potential major order from HP...

Vincent Fernando, CFA

Hon Hai's Margin Expansion Story Finally Starting to Be Realized? Results Imply Yes

Two key market concerns: News of Chinese government investigation and political risk given Mr. Gou running for president. Key Event: Foxtron EV JV...

Vincent Fernando, CFA

Tech Supply Chain Tracker (06-May-2024): Samsung SDI boosts investment despite weak 1Q24.

Samsung SDI remains confident in future growth, UnaBiz makes big strides in energy efficiency for devices, and questions arise over China's...

Tech Supply Chain Tracker

TWSE Foreign Holding Weekly (May 3rd): TSMC, Hon Hai, Delta Elec, Yageo, Quanta Computer, Alchip

We analyzed TWSE foreign holding data for the past week and highlighted foreign holding changes in TSMC, Hon Hai, Delta Elec, Yageo, Quanta...

Ke Yan, CFA, FRM

Hon Hai (Foxconn): After the 50% Surge, Where Can It Go From Here?

​Hon Hai shares surged to new all-time high after showcasing AI technologies at Nvidia's GTC conference. We believe a short squeeze may have been...

Vincent Fernando, CFA

Hon Hai: Beat & Raise; Further Valuation Upside; AI Server Product Announcements Next Week

​Hon Hai's delivers strong 4Q23 profit and bullish outlook on 2024 revenue driven by demand for AI servers. Potential major order from HP...

Vincent Fernando, CFA

Hon Hai's Margin Expansion Story Finally Starting to Be Realized? Results Imply Yes

Two key market concerns: News of Chinese government investigation and political risk given Mr. Gou running for president. Key Event: Foxtron EV JV...

Vincent Fernando, CFA

Tech Supply Chain Tracker (06-May-2024): Samsung SDI boosts investment despite weak 1Q24.

Samsung SDI remains confident in future growth, UnaBiz makes big strides in energy efficiency for devices, and questions arise over China's...

Tech Supply Chain Tracker

TWSE Foreign Holding Weekly (May 3rd): TSMC, Hon Hai, Delta Elec, Yageo, Quanta Computer, Alchip

We analyzed TWSE foreign holding data for the past week and highlighted foreign holding changes in TSMC, Hon Hai, Delta Elec, Yageo, Quanta...

Ke Yan, CFA, FRM

Hon Hai shares surged to new all-time high after showcasing AI technologies at Nvidia's GTC conference. We believe a short squeeze may have been...

Hon Hai's delivers strong 4Q23 profit and bullish outlook on 2024 revenue driven by demand for AI servers. Potential major order from HP...