Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

Notable themes:<ul><li>
Sector leadership is concentrated. The MSCI EM Index’s YTD advance, which is pushing through to all-time highs, is driven primary by tech. This sector accounts for a 26% weighting in the Index, and it is the only sector trading at 12-month relative strength highs. That’s the rear-view mirror take. What’s the technical outlook for tech? We remain overweight, keeping in mind the sector is ripe for a pause/correction (based on how far it is trading above its 200-day MA). Long-term…</li></ul>

Notable themes:
Sector leadership is concentrated. The MSCI EM Index’s YTD advance, which is pushing through to all-time highs, is driven primary by tech. This sector accounts for a 26% weighting in the Index, and it is the only sector trading at 12-month relative strength highs. That’s the rear-view mirror take. What’s the technical outlook for tech? We remain overweight, keeping in mind the sector is ripe for a pause/correction (based on how far it is trading above its 200-day MA). Long-term…

Asia and Global Semiconductor and Tech Research

Andrew Lu

Equity Bottom-Up

<h2>MediaTek is changing its focuses after the new Co-CEO Rick Tsai on board</h2><ul><li>
Refocuses on margin: Apart from the gross margin improvement in 3Q17 to 35.5% from 1H17's 34-35%, MediaTek expects gross margin recovery to high 30% (37-39%) in 2H18, beating Bloomberg consensus' 35% in 2H18. The company attributes the margin improvement to a better cost reduction on new smartphone baseband design, allocating more resources to higher margin fast growing non-smartphone products like NB-IOT MT2625 SoC for…</li></ul>

MediaTek is changing its focuses after the new Co-CEO Rick Tsai on board
Refocuses on margin: Apart from the gross margin improvement in 3Q17 to 35.5% from 1H17's 34-35%, MediaTek expects gross margin recovery to high 30% (37-39%) in 2H18, beating Bloomberg consensus' 35% in 2H18. The company attributes the margin improvement to a better cost reduction on new smartphone baseband design, allocating more resources to higher margin fast growing non-smartphone products like NB-IOT MT2625 SoC for…

MediaTek Refocuses on Margin, Defocuses on the High-End Smartphone After the Management Changed

Advanced Semiconductor Engr / Equity Bottom-Up

<h2>Summary</h2><ul>
<li>Need another property disposal gain to window dressing 3Q17: By removing 2Q's property disposal gain, ASE could only deliver NT$0.44 EPS for 2Q17, falling short of Bloomberg's NT$0.57. ASE is guiding below seasonal 3Q sales growth of 12% q/q at a GM of 18%, which is 2% below Bloomberg consensus' sales estimates and 1-2ppts miss on margin. We thus expect analysts to cut their 3Q17 EPS estimates to NT$0.6 level from NT$0.85 now.</li>
<li>
ASE in fan out? The current fan-out capacity is about 15,000…</li>
</ul>

Summary
Need another property disposal gain to window dressing 3Q17: By removing 2Q's property disposal gain, ASE could only deliver NT$0.44 EPS for 2Q17, falling short of Bloomberg's NT$0.57. ASE is guiding below seasonal 3Q sales growth of 12% q/q at a GM of 18%, which is 2% below Bloomberg consensus' sales estimates and 1-2ppts miss on margin. We thus expect analysts to cut their 3Q17 EPS estimates to NT$0.6 level from NT$0.85 now.

ASE in fan out? The current fan-out capacity is about 15,000…


ASE Might Need Another Disposal Gain to Window Dressing 3Q17; SPIL Consolidation Is Still Unknown

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing)

<h2>Summary</h2><ul>
<li>
8% to 25% shares in five years? Samsung plans to triple its foundry shares to 25% from an estimated 8% in 2016 within the next five years by aggressively adding big-names and smaller clients.</li>
<li>
Spun off is the key to gain shares: Intel and Samsung will have the stronger position to cut conflict of interest with foundry customers if Intel and Samsung are spinning off its logic semi manufacturing to become pure foundry vendors.</li>
<li>
10% shares gain inevitable: We earlier estimated Samsung Foundry to…</li>
</ul>

Summary

8% to 25% shares in five years? Samsung plans to triple its foundry shares to 25% from an estimated 8% in 2016 within the next five years by aggressively adding big-names and smaller clients.

Spun off is the key to gain shares: Intel and Samsung will have the stronger position to cut conflict of interest with foundry customers if Intel and Samsung are spinning off its logic semi manufacturing to become pure foundry vendors.

10% shares gain inevitable: We earlier estimated Samsung Foundry to…


Samsung Foundry Is Aiming 25% of Shares in Five Years; We See 17% Gain Too Aggressive

<h2>Summary</h2><ul>
<li>
The pending legal issues remain to be an overhang for <a href="https://www.smartkarma.com/entities/969" target="_blank" data-smartkarma-citation="entities:969:1">Qualcomm.</a> However, the rate cut on royalty is well expected by analysts and investors but upside surprise on MSM shipment, ASP, and MSM EBIT margin not well expected. Also, Qualcomm and <a href="https://www.smartkarma.com/entities/9801" target="_blank" data-smartkarma-citation="entities:9801:1">NXP</a> merger should give another boost to 2018 sales and non-GAAP EPS.
</li>
<li>
No more device sales and shipment data: Since pending legal issues on royalty expanded, Qualcomm no longer provides estimated global device sales and shipment data. We used these to…</li>
</ul>

Summary

The pending legal issues remain to be an overhang for Qualcomm. However, the rate cut on royalty is well expected by analysts and investors but upside surprise on MSM shipment, ASP, and MSM EBIT margin not well expected. Also, Qualcomm and NXP merger should give another boost to 2018 sales and non-GAAP EPS.


No more device sales and shipment data: Since pending legal issues on royalty expanded, Qualcomm no longer provides estimated global device sales and shipment data. We used these to…


Qualcomm Is Regaining Its Momentum on MSM Chipset Sales Despite Licensee Disputes

Taiwan

MediaTek Inc. is a fabless semiconductor company for wireless communications and digital multimedia solutions. The company provides SOC system solutions for wireless communications, high-definition TV, optical storage, DVD and Blu-ray products.

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Mediatek Inc (2454 TT)

EM Leadership Screen & Chart Book

Notable themes: Sector leadership is concentrated. The MSCI EM Index’s YTD advance, which is pushing through to all-time highs, is driven primary...

Vermilion Research

MediaTek Refocuses on Margin, Defocuses on the High-End Smartphone After the Management Changed

MediaTek is changing its focuses after the new Co-CEO Rick Tsai on board Refocuses on margin: Apart from the gross margin improvement in 3Q17 to...

Andrew Lu

ASE Might Need Another Disposal Gain to Window Dressing 3Q17; SPIL Consolidation Is Still Unknown

Summary Need another property disposal gain to window dressing 3Q17: By removing 2Q's property disposal gain, ASE could only deliver NT$0.44 EPS...

Andrew Lu

Samsung Foundry Is Aiming 25% of Shares in Five Years; We See 17% Gain Too Aggressive

Summary 8% to 25% shares in five years? Samsung plans to triple its foundry shares to 25% from an estimated 8% in 2016 within the next five years...

Andrew Lu

Qualcomm Is Regaining Its Momentum on MSM Chipset Sales Despite Licensee Disputes

Summary The pending legal issues remain to be an overhang for Qualcomm. However, the rate cut on royalty is well expected by analysts and...

Andrew Lu

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