Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>Hong Kong continued a correction in its Bull market which has lifted the HSCEI to be the best performing Asian index this year.  Southboune buying is strong.</li>
<li>
<a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies Holdings (2018 HK)</a> share price had a breakout relative to the MSCI AC Asia Index.  The company reported solid results benifitting from the smartphone and auto sectors.
</li>
<li>
<a href="https://www.smartkarma.com/entities/cgn-power-co-ltd-h" target="_blank" data-smartkarma-citation="entities:58:1" rel="noopener">CGN Power (1816 HK)</a> share price relative to MSCI China broke down.  The company reported a disappointing 3Q24 results even as power generation increased by 15% YoY for the period.
</li>
</ul>


Hong Kong continued a correction in its Bull market which has lifted the HSCEI to be the best performing Asian index this year.  Southboune buying is strong.

AAC Technologies Holdings (2018 HK) share price had a breakout relative to the MSCI AC Asia Index.  The company reported solid results benifitting from the smartphone and auto sectors.


CGN Power (1816 HK) share price relative to MSCI China broke down.  The company reported a disappointing 3Q24 results even as power generation increased by 15% YoY for the period.



Technically Speaking, Breakouts and Breakdowns: HONG KONG (NOVEMBER 25)

Technology / Semiconductor / Internet Research

Nicolas Baratte

<ul>
<li>IDC reported 3Q24 PC shipments declining -2% YoY, Canalys an increase of +1%. Let’s call this flat. If 4Q24 is “average seasonal”, 2024 will reach ~265m, or the pre-Covid range. </li>
<li>No AI fever, no accelerated replacement cycle, for now. If it happens, it will take time, ie compelling AI apps that only run locally and need a new PC.</li>
<li>In Asia, PC vendors: Lenovo, Acer, Asus. Taiwan ODM: Compal, Quanta, Wistron. Semi with high exposure: Novatek, Realtek. </li>
</ul>


IDC reported 3Q24 PC shipments declining -2% YoY, Canalys an increase of +1%. Let’s call this flat. If 4Q24 is “average seasonal”, 2024 will reach ~265m, or the pre-Covid range. 
No AI fever, no accelerated replacement cycle, for now. If it happens, it will take time, ie compelling AI apps that only run locally and need a new PC.
In Asia, PC vendors: Lenovo, Acer, Asus. Taiwan ODM: Compal, Quanta, Wistron. Semi with high exposure: Novatek, Realtek. 


3Q24 PC Shipments Are Flat YoY. Lenovo, Acer, Asus. Compal, Quanta, Wistron.

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

<ul>
<li>PC &amp; Server solutions names have fallen moderately from highs in June, however enterprise server company HPE soared 20% on AI strength.</li>
<li>Despite the market pullback from highs, we note that 2025E forward growth expectations have generally increased for the universe over the last month.</li>
<li>Latest Taiwan PC company revenues indicate healthy growth and HPE's management guided for Enterprise AI orders to accelerate.</li>
</ul>


PC &amp; Server solutions names have fallen moderately from highs in June, however enterprise server company HPE soared 20% on AI strength.
Despite the market pullback from highs, we note that 2025E forward growth expectations have generally increased for the universe over the last month.
Latest Taiwan PC company revenues indicate healthy growth and HPE's management guided for Enterprise AI orders to accelerate.


PC Monitor: Growth Expectations Have Increased Recently; HPE Signals Enterprise AI Acceleration

<ul>
<li>Asus's 1Q24 earnings beat consensus by 46% thanks to major increase in operating margin driven by costs optimization. Adjusted Asus brand Op profit rose 227% YoY and 98% QoQ.</li>
<li>Asus will host a major AI PC launch event May 21st, with additional AI PCs launched at Computex in Taiwan June 4th. Will feature <a href="https://www.smartkarma.com/entities/qualcomm-inc" target="_blank" data-smartkarma-citation="entities:969:1" rel="noopener">Qualcomm Inc (QCOM US)</a> Snapdragon processors.</li>
<li>Asus confident in an PC upgrade cycle and has guided for sales to rise and margins to expand in the coming quarters. We maintain our Structural Long rating for Asus.</li>
</ul>


Asus's 1Q24 earnings beat consensus by 46% thanks to major increase in operating margin driven by costs optimization. Adjusted Asus brand Op profit rose 227% YoY and 98% QoQ.
Asus will host a major AI PC launch event May 21st, with additional AI PCs launched at Computex in Taiwan June 4th. Will feature Qualcomm Inc (QCOM US) Snapdragon processors.
Asus confident in an PC upgrade cycle and has guided for sales to rise and margins to expand in the coming quarters. We maintain our Structural Long rating for Asus.


Asustek: Margin Beat, Guides More Upside; Qualcomm for AI PCs; Why Asus Confident in AI PC Up-Cycle

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>Nvidia GTC Conference This Week Likely to Create Newsflow for Many Tech Names</li>
<li>Samsung Could Hike NAND Flash Prices by 20%; Silicon Motion for Exposure</li>
<li>TSMC Reportedly Placing Orders for Additional Advanced Packaging Capacity, Likely In Response to Demand Strength</li>
</ul>


Nvidia GTC Conference This Week Likely to Create Newsflow for Many Tech Names
Samsung Could Hike NAND Flash Prices by 20%; Silicon Motion for Exposure
TSMC Reportedly Placing Orders for Additional Advanced Packaging Capacity, Likely In Response to Demand Strength


Taiwan Tech Weekly: Nvidia Conference; Samsung to Hike NAND Prices; TSMC Adding Capex Due to Demand

China

Lenovo Group Limited, through its subsidiaries, sells, and manufactures personal computers and handheld devices. The Company also provides Internet services and IT services, and contracting manufacturing business.

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Lenovo Group Ltd Adr (LNVGY US)

Technically Speaking, Breakouts and Breakdowns: HONG KONG (NOVEMBER 25)

Southbound buying in HK continued strong with Value Factor providing the best returns.AAC Tech share price had a break out as it provided strong...

David Mudd

3Q24 PC Shipments Are Flat YoY. Lenovo, Acer, Asus. Compal, Quanta, Wistron.

3Q24 PC shipments are flat YoY. The great recovery or AI replacement cycle aren’t happening (for now). IDC reported 3Q24 PC shipments declining -2%...

Nicolas Baratte

PC Monitor: Growth Expectations Have Increased Recently; HPE Signals Enterprise AI Acceleration

PC & Server Solution share prices have dipped from recent highs, however forward growth expectations have increased over the last month and...

Vincent Fernando, CFA

Asustek: Margin Beat, Guides More Upside; Qualcomm for AI PCs; Why Asus Confident in AI PC Up-Cycle

Asus beats earnings expectations by 46% in 1Q24, plans major AI PC launch event with Qualcomm processors, confident in PC upgrade cycle and future...

Vincent Fernando, CFA

Taiwan Tech Weekly: Nvidia Conference; Samsung to Hike NAND Prices; TSMC Adding Capex Due to Demand

Many Taiwanese companies participating at Nvidia's GTC conference this week. Local reports say Samsung to hike NAND flash prices by 20%. Also,...

Vincent Fernando, CFA

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Technically Speaking, Breakouts and Breakdowns: HONG KONG (NOVEMBER 25)

Southbound buying in HK continued strong with Value Factor providing the best returns.AAC Tech share price had a break out as it provided strong...

David Mudd

3Q24 PC Shipments Are Flat YoY. Lenovo, Acer, Asus. Compal, Quanta, Wistron.

3Q24 PC shipments are flat YoY. The great recovery or AI replacement cycle aren’t happening (for now). IDC reported 3Q24 PC shipments declining -2%...

Nicolas Baratte

PC Monitor: Growth Expectations Have Increased Recently; HPE Signals Enterprise AI Acceleration

​PC & Server Solution share prices have dipped from recent highs, however forward growth expectations have increased over the last month and...

Vincent Fernando, CFA

Asustek: Margin Beat, Guides More Upside; Qualcomm for AI PCs; Why Asus Confident in AI PC Up-Cycle

​Asus beats earnings expectations by 46% in 1Q24, plans major AI PC launch event with Qualcomm processors, confident in PC upgrade cycle and future...

Vincent Fernando, CFA

Taiwan Tech Weekly: Nvidia Conference; Samsung to Hike NAND Prices; TSMC Adding Capex Due to Demand

​Many Taiwanese companies participating at Nvidia's GTC conference this week. Local reports say Samsung to hike NAND flash prices by 20%. Also,...

Vincent Fernando, CFA

PC & Server Solution share prices have dipped from recent highs, however forward growth expectations have increased over the last month and...

Asus beats earnings expectations by 46% in 1Q24, plans major AI PC launch event with Qualcomm processors, confident in PC upgrade cycle and future...

Many Taiwanese companies participating at Nvidia's GTC conference this week. Local reports say Samsung to hike NAND flash prices by 20%. Also,...