Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

Hua Hong Semiconductor / Equity Bottom-Up

<ul>
<li>Hong Kong's secular bull market continues this year with record buying from mainland investors through the Southbound Connect platform.</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> announced a positive profit alert of of 150% increase in profit for 2024.  The AI, phone and auto segments saw value content increases.
</li>
<li>
<a href="https://www.smartkarma.com/entities/hua-hong-semiconductor-ltd" target="_blank" data-smartkarma-citation="entities:7201:1" rel="noopener">Hua Hong Semiconductor (1347 HK)</a> is well-positioned to cater to China's increasing demand for locally designed and produced chips, especially in the EV, smart home appliances and wearables industries.
</li>
</ul>


Hong Kong's secular bull market continues this year with record buying from mainland investors through the Southbound Connect platform.

AAC Technologies Holdings (2018 HK) announced a positive profit alert of of 150% increase in profit for 2024.  The AI, phone and auto segments saw value content increases.


Hua Hong Semiconductor (1347 HK) is well-positioned to cater to China's increasing demand for locally designed and produced chips, especially in the EV, smart home appliances and wearables industries.



BUY/SELL/HOLD: Hong Kong Stock Update (February 20)

Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>The share price was up 4.4% on Friday - and up 2.3x since the end of October - raising forward valuations to the high side of their usual range.</li>
<li>Management raised FY Mar-24 operating profit guidance slightly after 3Q results that were strong YoY but flat QoQ. 4Q should be better as finished goods inventory is shipped.</li>
<li>Operating efficiency has improved and a new semiconductor up-cycle has begun, but the numbers suggest caution. Take profits and reassess.</li>
</ul>


The share price was up 4.4% on Friday - and up 2.3x since the end of October - raising forward valuations to the high side of their usual range.
Management raised FY Mar-24 operating profit guidance slightly after 3Q results that were strong YoY but flat QoQ. 4Q should be better as finished goods inventory is shipped.
Operating efficiency has improved and a new semiconductor up-cycle has begun, but the numbers suggest caution. Take profits and reassess.


Screen Holdings (7735): Share Price Straight Up, Financials Not so Simple

Japanese Equity Specialist, Ortus Advisors

Andrew Jackson

Japanese Equity Specialist

Ortus Advisors

Thematic (Sector/Industry)

<ul>
<li>Kioxia likely to see another strong day after Sandisk was +13.7% after announcing positive long-term guidance.</li>
<li>SPE may face pressure after AMAT's guidance beat failed to impress despite topping estimates.</li>
<li>Liberware and Terradrone may gain a competitive edge after new US tariffs target Chinese drone makers at up to 100%.</li>
</ul>


Kioxia likely to see another strong day after Sandisk was +13.7% after announcing positive long-term guidance.
SPE may face pressure after AMAT's guidance beat failed to impress despite topping estimates.
Liberware and Terradrone may gain a competitive edge after new US tariffs target Chinese drone makers at up to 100%.


Japan Morning Connection: Liberware and Terradrone Stand to Gain as US Targets Chinese Drone Makers

<ul>
<li>Intel's upsized $20bn share offering points to increased capex plans, a positive for Japanese SPE and its main suppliers.</li>
<li>Interesting news that SpaceX is chasing the low-band spectrum with comments to the FCC that it looks to “advance rapid, widespread deployment of flexible broadband spectrum resources”.</li>
<li>Kioxia may feel slight pressure with news its Y800bn buyback has concluded.</li>
</ul>


Intel's upsized $20bn share offering points to increased capex plans, a positive for Japanese SPE and its main suppliers.
Interesting news that SpaceX is chasing the low-band spectrum with comments to the FCC that it looks to “advance rapid, widespread deployment of flexible broadband spectrum resources”.
Kioxia may feel slight pressure with news its Y800bn buyback has concluded.


Japan Morning Connection: Intel's Upsized Share Offering May Lift Suppliers Lasertec, Screen and TOK

<ul>
<li>A huge rebound for risk-on and AI overnight which was sparked by the blow out numbers by Microsoft.</li>
<li>Tokyo Electron numbers on the close yesterday beat after it revised up its 1H guidance.</li>
<li>SPE could see support after Citadel's $10bn Situational Awareness purchase.</li>
</ul>


A huge rebound for risk-on and AI overnight which was sparked by the blow out numbers by Microsoft.
Tokyo Electron numbers on the close yesterday beat after it revised up its 1H guidance.
SPE could see support after Citadel's $10bn Situational Awareness purchase.


Japan Morning Connection: AI Set to Squeeze Hard After Strong Earnings Follow Leveraged Unwind

Japan

SCREEN Holdings Co Ltd.  manufactures and sell semiconductors, FPD devices, commercial printing and printed circuit boards(PCB). The company also provides additional services for its products.

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SCREEN Holdings (7735 JP)

BUY/SELL/HOLD: Hong Kong Stock Update (February 20)

Mainland investors are buying record amounts in HK during secular bull mkt. AAC Tech reported positive earnings surprise and Hua Hong is rapidly...

David Mudd

Japan Morning Connection: Liberware and Terradrone Stand to Gain as US Targets Chinese Drone Makers

Liberware and Terradrone may gain a competitive edge after new US tariffs target Chinese drone makers at up to 100% while SPE may face pressure...

Andrew Jackson

Japan Morning Connection: AI Set to Squeeze Hard After Strong Earnings Follow Leveraged Unwind

AI set to squeeze hard after solid earnings from Microsoft and Lam Research, with Lam Research +18% for its best day since 1999.

Andrew Jackson

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

BUY/SELL/HOLD: Hong Kong Stock Update (February 20)

Mainland investors are buying record amounts in HK during secular bull mkt. AAC Tech reported positive earnings surprise and Hua Hong is rapidly...

David Mudd

Screen Holdings (7735): Share Price Straight Up, Financials Not so Simple

Screen's share price has risen 2.3x since October, discounting plausible growth scenarios. Efficiency gains are impressive, but inventory is at a...

Scott Foster

Japan Morning Connection: Liberware and Terradrone Stand to Gain as US Targets Chinese Drone Makers

Liberware and Terradrone may gain a competitive edge after new US tariffs target Chinese drone makers at up to 100% while SPE may face pressure...

Andrew Jackson

Japan Morning Connection: Intel's Upsized Share Offering May Lift Suppliers Lasertec, Screen and TOK

Intel suppliers could see a lift after Intel's upsized share offering signals increased capex plans, while Kioxia may feel slight pressure as its...

Andrew Jackson

Japan Morning Connection: AI Set to Squeeze Hard After Strong Earnings Follow Leveraged Unwind

AI set to squeeze hard after solid earnings from Microsoft and Lam Research, with Lam Research +18% for its best day since 1999.

Andrew Jackson