Taiwan Tech Focused Senior Analyst

Patrick Liao

Equity Bottom-Up

Vanguard Intl Semiconductor / Equity Bottom-Up

<ul>
<li>3Q24 guidance: Shipment: up 9-11% due to higher customer demand. ASP: down 0-2% QoQ. GM: 28-30%, up 3ppts QoQ.</li>
<li>Pricing hit bottom in 2Q24. Anticipates UTR in 2025 returning to 70-80%.</li>
<li>Effective tax rate for 2H24 is expected to be 20%.</li>
</ul>


3Q24 guidance: Shipment: up 9-11% due to higher customer demand. ASP: down 0-2% QoQ. GM: 28-30%, up 3ppts QoQ.
Pricing hit bottom in 2Q24. Anticipates UTR in 2025 returning to 70-80%.
Effective tax rate for 2H24 is expected to be 20%.


Vanguard (5347.TT): Pricing Hit Bottom in 2Q24. Anticipates UTR in 2025 Returning to 70-80%.

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Hua Hong Semiconductor / Equity Bottom-Up

<ul>
<li>After hitting a low point in Q4 2023, Research on Hong Kong companies has been slow to pick up reflecting the ongoing skepticism from investors. </li>
<li>Reports on the large China tech companies dominated the top ten companies covered over the last couple of years and in the first half of 2024.</li>
<li>As China continues to dominate and make news in the global EV market, research in that sector has picked up.</li>
</ul>


After hitting a low point in Q4 2023, Research on Hong Kong companies has been slow to pick up reflecting the ongoing skepticism from investors. 
Reports on the large China tech companies dominated the top ten companies covered over the last couple of years and in the first half of 2024.
As China continues to dominate and make news in the global EV market, research in that sector has picked up.


BUY/SELL/HOLD: China/Hong Kong Stock Updates (July 8th)

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

Vanguard Intl Semiconductor / Index Rebalance

<ul>
<li>There are 12 changes for the TIP Taiwan Technology Dividend Highlight Index in June/July. The Fuh Hwa Taiwan Technology Dividend Highlight ETF (00929 TW) has an AUM of US$7.16bn.</li>
<li>One-Way turnover is estimated at 35% and that will result in a round-trip trade of TWD 134.7bn (US$4.1bn). There are 8 stocks that could have over 5x ADV to trade.</li>
<li>The ETF started rebalancing their portfolio on Friday and will continue to trade the stock over the next 7 trading days.</li>
</ul>


There are 12 changes for the TIP Taiwan Technology Dividend Highlight Index in June/July. The Fuh Hwa Taiwan Technology Dividend Highlight ETF (00929 TW) has an AUM of US$7.16bn.
One-Way turnover is estimated at 35% and that will result in a round-trip trade of TWD 134.7bn (US$4.1bn). There are 8 stocks that could have over 5x ADV to trade.
The ETF started rebalancing their portfolio on Friday and will continue to trade the stock over the next 7 trading days.


TIP Taiwan Technology Dividend Highlight Index Rebalance: 12 Changes & US$4bn Round-Trip Trade

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

Foxconn Industrial Internet / Technical Analysis

<ul>
<li>Not much has changed since our latest Int'l Compass from May 31, 2024 titled "Buy the Pullback." </li>
<li>We were buyers of the pullback in global equities (MSCI ACWI, ACWI ex-US, EAFE, EM, Europe, Japan, Taiwan, etc.) with important supports holding, combined with ongoing healthy market dynamics.</li>
<li>Supports are holding, and our bullish outlook (since early-November 2023) remains intact. Continue to buy dips.</li>
</ul>


Not much has changed since our latest Int'l Compass from May 31, 2024 titled "Buy the Pullback." 
We were buyers of the pullback in global equities (MSCI ACWI, ACWI ex-US, EAFE, EM, Europe, Japan, Taiwan, etc.) with important supports holding, combined with ongoing healthy market dynamics.
Supports are holding, and our bullish outlook (since early-November 2023) remains intact. Continue to buy dips.


Downgrading Europe to Market Weight; Europe Indexes Still Bullish (Price); Bullish Outlook Intact

<ul>
<li>Vanguard announce the establishment of a 12” Fab in Singapore with 60% stake, with Nxp Semiconductors Nv (NXPI US) will invest remaining 40%.  </li>
<li>The nodes produced will span from 40nm to 130nm, encompassing mixed-signal, PMIC, and analog ICs to support automotive, industrial, consumer, and mobile applications.  </li>
<li>Vanguard will uphold a healthy cash balance, along with large debt and a follow-up cash offering.</li>
</ul>


Vanguard announce the establishment of a 12” Fab in Singapore with 60% stake, with Nxp Semiconductors Nv (NXPI US) will invest remaining 40%.  
The nodes produced will span from 40nm to 130nm, encompassing mixed-signal, PMIC, and analog ICs to support automotive, industrial, consumer, and mobile applications.  
Vanguard will uphold a healthy cash balance, along with large debt and a follow-up cash offering.


Vanguard (5347.TT): Setup 12" Fab in Singapore With 60% Stake, with NXP Investing Remaining 40%.

Taiwan

Vanguard International Semiconductor Corporation offers integrated circuit foundry services.  The Company manufactures 0.18um logic, mixed-signal, analog, high voltage, low power, CMOS RF, flash, embedded memory, and bipolar CMOS DMOS semiconductors.

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Vanguard Intl Semiconductor (5347 TT)

Vanguard (5347.TT): Pricing Hit Bottom in 2Q24. Anticipates UTR in 2025 Returning to 70-80%.

3Q24 guidance shows increased shipments due to higher demand GM expected to rise 3ppts QoQ. Anticipates pricing to improve in 2025. Effective tax...

Patrick Liao

BUY/SELL/HOLD: China/Hong Kong Stock Updates (July 8th)

Tech NEV companies continue to dominate the research landscape for Hong Kong coverage. Bosideng, China Water Affairs, Topsports, BYD and Xiaomi...

David Mudd

TIP Taiwan Technology Dividend Highlight Index Rebalance: 12 Changes & US$4bn Round-Trip Trade

There are 12 changes for the index in June. One-way turnover is estimated at 35% resulting in a round-trip trade of TWD 134bn (US$4.1bn). There are...

Brian Freitas

Downgrading Europe to Market Weight; Europe Indexes Still Bullish (Price); Bullish Outlook Intact

Downgrading Europe to Market Weight $FEZ $STOXX; Europe Still Bullish From a Price Perspective; Bullish Outlook Intact on $ACWI $EEM; Supports...

Vermilion Research

Vanguard (5347.TT): Setup 12" Fab in Singapore With 60% Stake, with NXP Investing Remaining 40%.

Vanguard and Nxp Semiconductors to establish 12" Fab in Singapore for diverse IC production, with Vanguard maintaining majority stake.

Patrick Liao

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Vanguard (5347.TT): Pricing Hit Bottom in 2Q24. Anticipates UTR in 2025 Returning to 70-80%.

​3Q24 guidance shows increased shipments due to higher demand GM expected to rise 3ppts QoQ. Anticipates pricing to improve in 2025. Effective tax...

Patrick Liao

BUY/SELL/HOLD: China/Hong Kong Stock Updates (July 8th)

Tech NEV companies continue to dominate the research landscape for Hong Kong coverage. Bosideng, China Water Affairs, Topsports, BYD and Xiaomi...

David Mudd

TIP Taiwan Technology Dividend Highlight Index Rebalance: 12 Changes & US$4bn Round-Trip Trade

There are 12 changes for the index in June. One-way turnover is estimated at 35% resulting in a round-trip trade of TWD 134bn (US$4.1bn). There are...

Brian Freitas

Downgrading Europe to Market Weight; Europe Indexes Still Bullish (Price); Bullish Outlook Intact

Downgrading Europe to Market Weight $FEZ $STOXX; Europe Still Bullish From a Price Perspective; Bullish Outlook Intact on $ACWI $EEM; Supports...

Vermilion Research

Vanguard (5347.TT): Setup 12" Fab in Singapore With 60% Stake, with NXP Investing Remaining 40%.

​Vanguard and Nxp Semiconductors to establish 12" Fab in Singapore for diverse IC production, with Vanguard maintaining majority stake.

Patrick Liao

3Q24 guidance shows increased shipments due to higher demand GM expected to rise 3ppts QoQ. Anticipates pricing to improve in 2025. Effective tax...

Vanguard and Nxp Semiconductors to establish 12" Fab in Singapore for diverse IC production, with Vanguard maintaining majority stake.