Thematic Investing in Tech and Media, CM Research

Cyrus Mewawalla

Thematic Investing in Tech and Media

Thematic TMT investing

CM Research

CM Research is an independent research house based in London, England. We provide global thematic research in the Technology, Media and Telecoms (TMT) sectors. 

Our focus is on disruptive technologies: how will they unfold; which industries will be impacted; and who will be the ultimate winners and losers. 

Our aim is to help investors predict share prices and corporate executives stay one step ahead of the technology trends that are shaping their industry. 

We research technology investment themes in detail and then feed the results into a scorecard system to quantify the impact of several conflicting themes on individual stocks. 

Recent themes covered include internet TV, the Internet of Things, Big Data, Mobile payments, crowdfunding, artificial intelligence, the cloud, software defined networking and Generation Hashtag.

We cover the top 500 global TMT stocks by market capitalisation and several technology start-ups and pre-IPO companies too. 

In 2015, CM Research analysts outperformed the Bloomberg Benchmark Analyst Index - which measures how good analysts are at predicting stock prices - by 7.1%.

Thematic (Sector/Industry)

As the dust settles after the US presidential election, we look at the medium-term investment implications of a Trump presidency for technology stocks.The biggest benefit to the US tech sector will come from lower tax rates. The biggest risk is trade wars that result in higher tariffs and retaliation against US tech companies. The wildcard is regulation: net neutrality rules – if relaxed – could shift the balance of power from internet companies to telcos.Below we look at five themes emanating from Mr Trump's policies that have a direct impact on the global tech sector: taxation, trade, regulation, cybersecurity and social media.

As the dust settles after the US presidential election, we look at the medium-term investment implications of a Trump presidency for technology stocks.The biggest benefit to the US tech sector will come from lower tax rates. The biggest risk is trade wars that result in higher tariffs and retaliation against US tech companies. The wildcard is regulation: net neutrality rules – if relaxed – could shift the balance of power from internet companies to telcos.Below we look at five themes emanating from Mr Trump's policies that have a direct impact on the global tech sector: taxation, trade, regulation, cybersecurity and social media.

Asia and Global Semiconductor and Tech Research

Andrew Lu

Equity Bottom-Up

<h2>Amazing beats for both 3Q16 results and 4Q16 guidance</h2><ul><li>
Amazing results beat: <a href="https://www.smartkarma.com/entities/5891" target="_blank" data-smartkarma-citation="entities:5891:1">Nvidia Corp (NVDA US) </a>reports 3Q16 EPS of US$0.83, which was US$27 cents better than Bloomberg consensus' mainly due to 19% beat on sales to US$2bn (40% q/q, 54% y/y), 2ppts better on operating margin to 32%, and 6ppts higher on net margin to 27%. Nvidia said a breakout quarter driven by new Pascal GPUs are fully ramped and enjoying great success in gaming, VR, self-driving cars (please see our earlier report "<a href="https://www.smartkarma.com/insights/andrew-on-tech-automotive-semis-the-next-wave" target="_blank" data-smartkarma-citation="insights:5122">Andrew on</a>…</li></ul>

Amazing beats for both 3Q16 results and 4Q16 guidance
Amazing results beat: Nvidia Corp (NVDA US) reports 3Q16 EPS of US$0.83, which was US$27 cents better than Bloomberg consensus' mainly due to 19% beat on sales to US$2bn (40% q/q, 54% y/y), 2ppts better on operating margin to 32%, and 6ppts higher on net margin to 27%. Nvidia said a breakout quarter driven by new Pascal GPUs are fully ramped and enjoying great success in gaming, VR, self-driving cars (please see our earlier report "Andrew on…

Nvidia Is Firing All Cylinders on Gaming, Self-Driving Cars, and Datacenter AI

<h2>Summary</h2><ul>
<li>
Raising the import tariffs on technology products: The new Trump government might raise the import tariffs on technology products to stop China dump their products. This should lead the part of the Apple assembly business back to the US. US solar and electric/self-driving automotive industry will be protected.  Consumers will see the cost increase of buying imported technology products, but the action might also drive China's counter-tariff trade war against the US in future. 
</li>
<li>
Cut taxes to…</li>
</ul>

Summary

Raising the import tariffs on technology products: The new Trump government might raise the import tariffs on technology products to stop China dump their products. This should lead the part of the Apple assembly business back to the US. US solar and electric/self-driving automotive industry will be protected.  Consumers will see the cost increase of buying imported technology products, but the action might also drive China's counter-tariff trade war against the US in future. 


Cut taxes to…


How Will Trump Shape up the Global Technology Industry in Next Four Years?

Semiconductor Manufacturing International Corp (SMIC) / Equity Bottom-Up

Semiconductor Manufacturing International Corp (SMIC)

<h2>Summary</h2><ul>
<li>3Q16 beats but a softer 4Q16 bottom line: SMIC reports stronger 3Q16 EPS of US$0.22 cents on 2% better sales, 2ppts better op margin, and 5ppts better on net margin. SMIC guides softer 4Q bottom line on higher op expenses and minority interests.</li>
<li>
Inevitable dilution or debt raising to fuel capex: We expect SMIC to continuously dilute the shareholders (up 8.5% q/q in 3Q16) or to increase net debt to equity ratio (to 24% in 3Q16 from 19% in 2Q) to narrow the gap of 53% of sales as a free cash…</li>
</ul>

Summary
3Q16 beats but a softer 4Q16 bottom line: SMIC reports stronger 3Q16 EPS of US$0.22 cents on 2% better sales, 2ppts better op margin, and 5ppts better on net margin. SMIC guides softer 4Q bottom line on higher op expenses and minority interests.

Inevitable dilution or debt raising to fuel capex: We expect SMIC to continuously dilute the shareholders (up 8.5% q/q in 3Q16) or to increase net debt to equity ratio (to 24% in 3Q16 from 19% in 2Q) to narrow the gap of 53% of sales as a free cash…


SMIC Delivers Another Strong Quarter but Guides a Softer 4Q16 Bottom Line

<h2>Summary</h2><ul>
<li>What's new? Strategy Analytics reported China smartphone shipments grew 15% y/y and 11% q/q to 121mn units in 3Q16 and Huawei maintained the #1 with 15% share, but Oppo and Vivo are closing the gap.</li>
<li>
Huawei might be the next one see y/y decline and step down from the #1: As China is migrating to open market from operator market, Huawei might be the next one seeing y/y shipment decline and stepping down from its # 1 position in China after Apple and Xiaomi. We expect Oppo and Vivo to match…</li>
</ul>

Summary
What's new? Strategy Analytics reported China smartphone shipments grew 15% y/y and 11% q/q to 121mn units in 3Q16 and Huawei maintained the #1 with 15% share, but Oppo and Vivo are closing the gap.

Huawei might be the next one see y/y decline and step down from the #1: As China is migrating to open market from operator market, Huawei might be the next one seeing y/y shipment decline and stepping down from its # 1 position in China after Apple and Xiaomi. We expect Oppo and Vivo to match…


Huawei Might Be the Next One See Y/Y Decline After Apple and Xiaomi in China

Taiwan

Taiwan Semiconductor Manufacturing Company Ltd. manufactures integrated circuits based on its proprietary designs.  The Company offers a comprehensive set of integrated circuit fabrication processes to manufacture CMOS logic, mixed-mode, volatile and non-volatile memory and BiCMOS chips.  Taiwan Semiconductor is an affiliate of Philips Electronics N.V.

TSMC (Taiwan Semiconductor Manufacturing) - ADR (TSM US)

TSMC (Taiwan Semiconductor Manufacturing) - ADR

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TSMC (Taiwan Semiconductor Manufacturing) - ADR (TSM US)

What Trump Means for Tech

As the dust settles after the US presidential election, we look at the medium-term investment implications of a Trump presidency for technology...

CM Research

Nvidia Is Firing All Cylinders on Gaming, Self-Driving Cars, and Datacenter AI

Amazing beats for both 3Q16 results and 4Q16 guidance Amazing results beat: Nvidia Corp (NVDA US) reports 3Q16 EPS of US$0.83, which was US$27...

Andrew Lu

How Will Trump Shape up the Global Technology Industry in Next Four Years?

Summary Raising the import tariffs on technology products: The new Trump government might raise the import tariffs on technology products to stop...

Andrew Lu

SMIC Delivers Another Strong Quarter but Guides a Softer 4Q16 Bottom Line

Summary 3Q16 beats but a softer 4Q16 bottom line: SMIC reports stronger 3Q16 EPS of US$0.22 cents on 2% better sales, 2ppts better op margin, and...

Andrew Lu

Huawei Might Be the Next One See Y/Y Decline After Apple and Xiaomi in China

Summary What's new? Strategy Analytics reported China smartphone shipments grew 15% y/y and 11% q/q to 121mn units in 3Q16 and Huawei maintained...

Andrew Lu

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