Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

<ul>
<li>HP and Dell's industry outlook after their results last week indicate a PC market stabilizing and set for growth in 2024E. Qualcomm provided AI comments at a recent conference.</li>
<li>Both HP and Dell managed to beat earnings expectations despite experiencing 20%+ YoY revenue declines. Neither stock's price has made a significant move since results.</li>
<li>AI incorporated into Windows 11 and PC's themselves could be a major reason for companies and consumers to buy new PC's. PC's are being designed to run AI capabilities locally.</li>
</ul>


HP and Dell's industry outlook after their results last week indicate a PC market stabilizing and set for growth in 2024E. Qualcomm provided AI comments at a recent conference.
Both HP and Dell managed to beat earnings expectations despite experiencing 20%+ YoY revenue declines. Neither stock's price has made a significant move since results.
AI incorporated into Windows 11 and PC's themselves could be a major reason for companies and consumers to buy new PC's. PC's are being designed to run AI capabilities locally.


Dell, HP, Qualcomm Signal AI-Driven PC Refresh Cycle, 2024E PC Growth, Accelerated Windows Upgrades

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

<ul>
<li>Q1’23 revenues of NT$ 102,376 million, down 13% QoQ and down 20% YoY</li>
<li>Forecasting PC segment +20% but Components segment -5% QoQ in Q2'23 </li>
<li>Outperforming both peers &amp; the market with &gt;50% revenues now coming from gaming...</li>
</ul>


Q1’23 revenues of NT$ 102,376 million, down 13% QoQ and down 20% YoY
Forecasting PC segment +20% but Components segment -5% QoQ in Q2'23 
Outperforming both peers &amp; the market with &gt;50% revenues now coming from gaming...


ASUS Q1'23 Revenues NT$ 102,376 Million,- 13% QoQ & -20% YoY. PC Segment to Grow ~20% in Q2'23

<ul>
<li>Q1'23 was Acer's fifth consecutive quarter of sequentially declining revenues</li>
<li>Called Q1'23 the trough but no specific guidance on the current quarter</li>
<li>Chromebook sales surged 44.4% QoQ. What was the reason for this?</li>
</ul>


Q1'23 was Acer's fifth consecutive quarter of sequentially declining revenues
Called Q1'23 the trough but no specific guidance on the current quarter
Chromebook sales surged 44.4% QoQ. What was the reason for this?


Acer Q1'23 Revenue NT$52.46 Billion, -12% QoQ, -33% YoY.

<ul>
<li>Asustek, Acer, and HP's recent quarterly results indicate decreases in inventory days, highlighting potential improvement happening at the leading edge of the PC industry chain.</li>
<li>Asustek (Asus) has substantially underperformed Acer YTD with one factor likely being Asus reporting worse margin performance. Asus is flat YTD after its post-results drop vs. +15% YTD for Acer.</li>
<li>Long/Short: One can explore Long Asustek vs. Short Acer based on expectations of normalization of relative operational performance.</li>
</ul>


Asustek, Acer, and HP's recent quarterly results indicate decreases in inventory days, highlighting potential improvement happening at the leading edge of the PC industry chain.
Asustek (Asus) has substantially underperformed Acer YTD with one factor likely being Asus reporting worse margin performance. Asus is flat YTD after its post-results drop vs. +15% YTD for Acer.
Long/Short: One can explore Long Asustek vs. Short Acer based on expectations of normalization of relative operational performance.


PC Industry Monitor: Signs of Inventory Improvement at PC Industry's Leading Edge; Shares Diverged

Novatek Microelectronics Corp / Equity Bottom-Up

<ul>
<li>Hon Hai reports YoY increase in January + February sales, maintains outlook.</li>
<li>Hewlett Packard results: CEO says does not expect significant PC recovery in FY2023E. Fitipower results show display ICs potentially bottoming earlier than most segments.</li>
<li>Memory Monitor: Two latest signals indicate lower margins and extended high inventories; biased Long Micron vs. Short Nanya Tech.</li>
</ul>


Hon Hai reports YoY increase in January + February sales, maintains outlook.
Hewlett Packard results: CEO says does not expect significant PC recovery in FY2023E. Fitipower results show display ICs potentially bottoming earlier than most segments.
Memory Monitor: Two latest signals indicate lower margins and extended high inventories; biased Long Micron vs. Short Nanya Tech.


Taiwan Tech Weekly: HP Says No Major PC Recovery in 2023E; Signs of Display ICs Early Turn-Around?

United States

HP Inc. provides imaging and printing systems, computing systems, mobile devices, solutions, and services for business and home. The Company offers products which includes laser and inkjet printers, scanners, copiers and faxes, personal computers, workstations, storage solutions, and other computing and printing systems. HP sells its products worldwide.

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Hewlett Packard Co (HPQ US)

Dell, HP, Qualcomm Signal AI-Driven PC Refresh Cycle, 2024E PC Growth, Accelerated Windows Upgrades

AI incorporated into Windows 11 and PC's themselves could be a major reason for companies and consumers to buy new PC's. PC's are being designed to...

Vincent Fernando, CFA

ASUS Q1'23 Revenues NT$ 102,376 Million,- 13% QoQ & -20% YoY. PC Segment to Grow ~20% in Q2'23

Q1’23 revenues of NT$ 102,376 million, down 13% QoQ and down 20% YoY. PC segment +20% but Components segment -5% QoQ in Q2'23. Outperforming peers...

William Keating

Acer Q1'23 Revenue NT$52.46 Billion, -12% QoQ, -33% YoY.

Q1'23 was Acer's fifth consecutive quarter of sequentially declining revenues. Called Q1'23 the trough but no specific guidance on the current...

William Keating

PC Industry Monitor: Signs of Inventory Improvement at PC Industry's Leading Edge; Shares Diverged

Asus has substantially underperformed Acer YTD with one likely factor being Asus reporting worse margin performance. Asus is flat YTD vs. +15% YTD...

Vincent Fernando, CFA

Taiwan Tech Weekly: HP Says No Major PC Recovery in 2023E; Signs of Display ICs Early Turn-Around?

Hewlett Packard results: CEO says does not expect significant PC recovery in FY2023E. Fitipower results show display ICs potentially bottoming...

Vincent Fernando, CFA

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