Category

Thematic (Sector/Industry)

Dec 01
0

Daily Brief Thematic (Sector/Industry): Risks Ahead for Japanese Trading Companies. Marubeni and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Risks Ahead for Japanese Trading Companies. Marubeni, Mitsui, Sumitomo, Mitsubishi
  • Ohayo Japan | Dow up 500 Points; EV Reliability Realities
  • Conbini Wars: Seven Vs Lawson Vs Familymart
  • Affordable Luxury: A Look Into Chinese Luxury (Part IV)
  • Restaurant & Retail Roundup – Takeaways from RFDC

Risks Ahead for Japanese Trading Companies. Marubeni, Mitsui, Sumitomo, Mitsubishi

By Rikki Malik

  • Headwinds are turning to tailwinds for the Japanese Trading companies.
  • Risks rising in the short term due to JPY strength, weakening commodity prices and the upcoming US recession.
  • Massive outperformance over the last two years, most recently due to multiple expansion

Ohayo Japan | Dow up 500 Points; EV Reliability Realities

By Mark Chadwick

  • Overseas: SPX +0.4%, Nasdaq -0.2%; Dow ends November with 9% gain; Salesforce shares up 9% on strong Q3 earnings
  • Today: NKY Futs+0.2% v cash. JPY 146.2; Japan’s ranking in digital competitiveness slumps; 7&I buys Aussie franchise for $1bn
  • JapanX: Japanese autos remain the most reliable – EVs far less reliable than conventional cars

Conbini Wars: Seven Vs Lawson Vs Familymart

By Michael Causton

  • The big 3 convenience stores in Japan control 90% of the sector and share will climb as they mop up some of the remaining chains and collaborate with the rest.
  • Seven Eleven is by far the best performer of the three but both Lawson and Familymart are innovating to create quite different retail operations.
  • All are seeing the benefits of digitisation of store and supply chain operations, which should enhance profitability, enhanced by new services and revenue streams like retail media.

Affordable Luxury: A Look Into Chinese Luxury (Part IV)

By Alexis Dwek

  • Thanks to the rapidly expanding middle class, increasing incomes, and a strong desire for luxury, Chinese consumers are often seen as the embodiment of the luxury industry’s promising future
  • However, the market has seen competition intensify: Not only are international brands competing against each other, but the rise of domestic brands has brought the competitive landscape to another level
  • Since this summer, investors have been concerned by a shifting Chinese landscape in the context of the current economic situation

Restaurant & Retail Roundup – Takeaways from RFDC

By Water Tower Research

  • Our monthly WTR restaurant and retail report focuses on stock performance, short interest, an outlook for restaurant commodity costs, our casual dining same-store sales (SSS) and traffic survey, and takeaways from the Restaurant Finance & Development Conference (RFDC) that occurred in mid-November.
  • Retailers outperform and restaurants underperform indexes on a MTD basis. For November 2023, the performance reversed, with retailers outperforming the restaurants by a wide margin.
  • On a month-to-date (MTD) basis, our equal-weighted index of restaurant stocks increased 6.2% following a decline of 4.2% in October, but below the S&P 500, which increased 8.6%. 

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Nov 30
0

Daily Brief Thematic (Sector/Industry): Ohayo Japan | GM Higher on $10bn Buyback; Honda Boosts Bet on Electric Bikes and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Ohayo Japan | GM Higher on $10bn Buyback; Honda Boosts Bet on Electric Bikes
  • [Blue Lotus Daily – TMT Update] PDD: PDD Begins Hiring Staff to Train LLM for Temu Customer Service
  • Japan’s Convenience Stores Still Growing, Still Innovating

Ohayo Japan | GM Higher on $10bn Buyback; Honda Boosts Bet on Electric Bikes

By Mark Chadwick

  • Overseas: SPX -0.1%, Nasdaq -0.1%; Mixed signals from the Fed; CrowdStrike +10%, GM +9%
  • Today: NKY Futs -0.1% v cash. JPY/$ 147.3; Toyota to sell shares in Denso; Japan announces extra budget to offset inflation
  • JapanX: Honda Charges Ahead with its investment in electric motorcycles

[Blue Lotus Daily – TMT Update] PDD: PDD Begins Hiring Staff to Train LLM for Temu Customer Service

By Ying Pan

  • On November 22nd, 2023 local Chinese media reported that Pinduoduo began hiring researchers/engineers for its large language model (LLM) on its recruitment website and other staffing channels.
  • According to reports, PDD is in the process of hiring researchers to build its new LLM tool to make AI functionality available for customer service on Temu.
  • Reminder that Temu is responsible for handling post sales services under a “fully managed” business model, which is currently out-sourced to a customer service center.

Japan’s Convenience Stores Still Growing, Still Innovating

By Michael Causton

  • Convenience stores remain Japan’s largest sector. 2020 was the first and, so far, only year in the format’s 50-year history when sales declined, but performance has since bounced back.
  • Still dominated by three of the largest retail chains in the country, it remains one of the most dynamic and forward thinking retailing and marketing sectors
  • The latest initiatives look set to deliver more growth in sales as well as potentially delivering a huge new revenue stream in the form of retail media.

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Nov 29
0

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Wall Street Edges Higher; Toyota to Sell Stake in Denso and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Ohayo Japan | Wall Street Edges Higher; Toyota to Sell Stake in Denso
  • The Magnificent 7 Are No Reason to Exit Stocks!
  • [Blue Lotus Daily]: TSLA/XPEV/NIO/LI/BIDU/1211.HK/600104.CH/601633.CH/ATAT/BEKE
  • EMEA Financials: Uneven Recovery

Ohayo Japan | Wall Street Edges Higher; Toyota to Sell Stake in Denso

By Mark Chadwick

  • Overseas: SPX +0.1%, Nasdaq +0.3%; Shein to list in US next year
  • Today: NKY Futs -0.3% v cash. JPY/$ 147.5; Toyota to sell Denso shares; New Asics MTP
  • JapanX: Toyota: Selling Denso Stake to Fuel Ambitious EV Expansion

The Magnificent 7 Are No Reason to Exit Stocks!

By Jeroen Blokland

  • Even though the endless outperformance of the Magnificent 7 means the Equal Weighted S&P 500 Index is underperforming massively, this is not a reason to sell stocks.
  • One to six months after the historically largest outperformances of the S&P 500 Index, more impressive returns tend to follow.
  • It’s only when the S&P 500 Index has lagged the Equal Weighted Index that shorting stocks would have been lucrative.

[Blue Lotus Daily]: TSLA/XPEV/NIO/LI/BIDU/1211.HK/600104.CH/601633.CH/ATAT/BEKE

By Eric Wen

  • TSLA/XPEV/NIO/LI/BIDU: Tesla FSD expected to launch in the Chinese market
  • 1211.HK/600104.CH/601633.CH: Japanese auto makers cut prices in Thailand to fend off Chinese EV
  • XPEV/NIO/BIDU/BYD: BYD cut vehicle prices again to boost year-end sales

EMEA Financials: Uneven Recovery

By Steven Holden

  • EMEA Financials are the largest Regional Sector underweight in global EM, with just 11.6% of managers positioned ahead of the MSCI EM index.
  • Moderate but uneven recovery underway, with buying in Greece, Saudi, Kuwait and Poland Financials.
  • Despite being the sector’s predominant country holding, South African Financials are experiencing a halt in growth; nonetheless, FirstRand and Standard Bank continue to be key holdings.

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Nov 28
0

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Muted Mood; TSMC Placing Its Chips on Japan and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Ohayo Japan | Muted Mood; TSMC Placing Its Chips on Japan
  • China to Provide Visa-Free for Six Countries – Why and The (Possible) Impact
  • Semiconductors. The Downturn Is Over. Or Is It?
  • Furniture/Furnishings Weekly – A Glance at Big-Box Retailers Shows Mixed Top Line
  • The Highlights – Cannabis News for the Week Ending November 24, 2023
  • Water Tower Hour Recap – KEY POINTS The State of the Restaurant Industry
  • Weekly Sustainable Investing Surveyor – Week Ended November 24, 2023

Ohayo Japan | Muted Mood; TSMC Placing Its Chips on Japan

By Mark Chadwick

  • Overseas: SPX -0.1%, Nasdaq -0.1%; Consumer stocks outperformed after record breaking Black Friday sales; US Home Sales impacted by 8% mortgage rates.
  • Today: NKY Futs +0.3% v cash. JPY/$ 148.6; Kagome raising food prices; Yahoo data breach; ASICS to double retail presence in India
  • JapanX: TSMC is betting big on Japan. The Taiwanese chip maker is reportedly contemplating the establishment of a third chip manufacturing plant in Japan.

China to Provide Visa-Free for Six Countries – Why and The (Possible) Impact

By Mohshin Aziz

  • China is expanding its list of countries allowed to enter visa-free. A good gesture to make China more friendly to foreigners and one step closer to global best practices 
  • Chinese major airlines and airports can become more desirable global aviation hubs, assuming they play their cards right 
  • Doubt much can change in a year, but the seeds are sown for stiffer competition for airlines with a hub-and-spoke strategy in North Asia

Semiconductors. The Downturn Is Over. Or Is It?

By William Keating

  • Global semiconductor sales have increased MoM  for seven months in a row. PC & Smartphone unit shipments have bottomed and are on the rise. Memory has bottomed.
  • Silicon wafer inventories are piled high, ASML, TEL facing down zero growth in 2024, foundry utilisations are (mostly) in the doldrums with further ASP cuts looming on the horizon. 
  • Multiple data points suggest we’ll still be talking about this downturn well into 2024

Furniture/Furnishings Weekly – A Glance at Big-Box Retailers Shows Mixed Top Line

By Water Tower Research

  • During the past two weeks, key big-box retailers reported the quarter ended in October, providing near real-time views into the state of the consumer and retailing.
  • Top-line results were mixed.
  • Our Read: Consumer spending continues to retreat from the pandemic bubble, with consumers moving down market to low-price and bargain retailers.

The Highlights – Cannabis News for the Week Ending November 24, 2023

By Water Tower Research

  • It was a holiday-shortened week for US stocks, and this will be a briefer edition of The Highlights.
  • The US cannabis MSOS ended the week -2.32%, while the global YOLO ETF was +2.43%.
  • Volumes were light, especially on Friday, when Ascend’s (CSE: AAWH, OTCQX: AAWH) US listing traded just $11,553 in volume.

Water Tower Hour Recap – KEY POINTS The State of the Restaurant Industry

By Water Tower Research

  • On the latest edition of The Water Tower Hour, WTR’s Head of Business Development Tim Regan interviewed WTR’s Head of Consumer Discretionary Lynne Collier to discuss the state of the restaurant industry, her outlook for 2024, and key takeaways from the Restaurant Finance and Development Conference (RFDC) in Las Vegas on November 13-15.
  • Key takeaways from RFDC. The tone of the conference was more upbeat than last year given the expectation of better cash flows in 2024.
  • Thus far in 4Q, restaurants are seeing better same-store sales (SSS) and traffic after the lull in September, creating more optimism for operators.

Weekly Sustainable Investing Surveyor – Week Ended November 24, 2023

By Water Tower Research

  • The WTR Sustainable Index was up by 0.5% W/W versus the S&P 500 Index (up 1.0%), the Russell 2000 Index (up 0.5%), and the Nasdaq Index (up 0.9%).
  • Energy Technology (12.4% of the index) was down by 1.8%, while Industrial Climate and Ag Technology (49.4% of the index) was up 0.5%, ClimateTech Mining was down 1.9%, andAdvanced Transportation Solutions was up 1.3%.
  • Top 10 Performers: CLIR, NVLH, NXH, EFOI, IRBT, TMC, GCEI, PEV, PNPN, FTCI

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Nov 27
0

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Tech Earnings; Nissan’s Big UK Bet and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Ohayo Japan | Tech Earnings; Nissan’s Big UK Bet
  • Engine Supply Chain Experiences Shifting Pain Points

Ohayo Japan | Tech Earnings; Nissan’s Big UK Bet

By Mark Chadwick

  • Overseas: SPX +0.1%, Nasdaq -0.1%; Expect a heavy weak of tech sector earnings: CRM, SNOW, CRWD. OPEC meeting next week a focus
  • Today: NKY Futs +0.3% v cash. JPY 149.4; Duty free shopping surges, good for dept stores, but changes to rules coming
  • JapanX: Nissan Sparks Electric Revolution with £2 Billion Investment in UK Manufacturing

Engine Supply Chain Experiences Shifting Pain Points

By Mohshin Aziz

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Nov 26
0

Daily Brief Thematic (Sector/Industry): Education Sector YTD: Volatility in Public Equities and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Education Sector YTD: Volatility in Public Equities, PE Stalking with Take Private Offers
  • Chinese Carmakers Ship More Workers Abroad for Expansion, White Paper Says
  • GEMWeekly (24 Nov 2023): Thailand, China, Indonesia Macro; TSMC, Baidu, Alibaba

Education Sector YTD: Volatility in Public Equities, PE Stalking with Take Private Offers

By Anik Siwach

  • EdTech Market Volatility: Docebo and Tribal Group report significant YTD gains of +27% and +32%, while Janison and LTG Group face steep declines of -59% and -45%.
  • AI Disruption and Adaptation: Chegg introduces a GPT-style assistant in response to AI challenges, while Duolingo excels with 83.1M monthly users, expanding beyond language tuition.
  • Shifts in Private Funding: Private EdTech funding declines in 2023, with strategic investors and family offices driving deals, amidst a broader reduction in venture capital investments.

Chinese Carmakers Ship More Workers Abroad for Expansion, White Paper Says

By Caixin Global

  • About 70% of more than 20 Chinese carmakers with a presence outside of China are expected to see an uptick in the number of employees sent to work overseas in 2023, reflecting their increased bet on international expansion as they face intensifying competition at home.
  • That’s an estimate from a white paper jointly published Monday by three subsidiaries of New York-based risk adviser Marsh McLennan.
  • It came against the backdrop of China having overtaken Japan as the world’s largest car exporter by volume earlier this year.

GEMWeekly (24 Nov 2023): Thailand, China, Indonesia Macro; TSMC, Baidu, Alibaba

By Wium Malan, CFA

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Nov 25
0

Daily Brief Thematic (Sector/Industry): Singles’ Day: Chinese Consumers Are Trading Down Instead of Buying Up and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Singles’ Day: Chinese Consumers Are Trading Down Instead of Buying Up
  • Japan Weekly | All About Yen; Panasonic, Cyberagent
  • [Blue Lotus Daily]: LKNCY/Cotti Coffe/XPEV/BIDU/NIO/LI/JKS/DIDI/300274 CH/300750 CH/601012 CH
  • China Drafts List of Developers Eligible for Funding, Asks Banks to Boost Real Estate Lending

Singles’ Day: Chinese Consumers Are Trading Down Instead of Buying Up

By Amrutha Raj

  • Singles’ Day sales are more than four times the USD 35.3 billion that U.S. shoppers clocked during Cyber Week (from Black Friday to Cyber Monday).
  • Global consumer names such as Apple, Nike, Lululemon, L’Oreal, and P&G have a large presence on Chinese e-commerce platforms.
  • JD.com reported last year that Apple sold more than RMB 1 billion worth of products in the first minute of the event’s final sales period.

Japan Weekly | All About Yen; Panasonic, Cyberagent

By Mark Chadwick

  • Market Watch: Topix ended the week unchanged. The yen was the bigger story after strengthening to Y147/$. Forex likely to dominate next week
  • Major Movers: CyberAgent was boosted by the release of a new #1 smartphone game; Panasonic gains after announcing potential restructuring of group assets
  • Activist Watch: Dalton’s Nippon Active Value fund has found a deep value, small-cap pharma company. Rheos Capital takes a significant stake in a fast-growing M&A advisor

[Blue Lotus Daily]: LKNCY/Cotti Coffe/XPEV/BIDU/NIO/LI/JKS/DIDI/300274 CH/300750 CH/601012 CH

By Eric Wen

  • LKNCY: Cotti Coffee pans to expand into tea drinks business(+)
  • BIDU/DIDI/XPEV: MIIT and 4 other departments to carry out intelligent car access network(+)
  • LI/NIO/XPEV/300274 CH/300750 CH/601012 CH/JKS: China Export Data in October shows PV and wind power decline accelerating(+/+/+/-/-/-/-)

China Drafts List of Developers Eligible for Funding, Asks Banks to Boost Real Estate Lending

By Caixin Global

  • Chinese regulators are pressing banks to step up lending and ease financing for developers as part of efforts to boost the ailing property sector.
  • At a meeting with China’s most important financial institutions last Friday, regulators brought up three new requirements for banks’ real estate loans to developers and homebuyers, people from several state-owned large banks attending the meeting told Caixin.
  • The banks were told to keep their real estate loan growth at a level no lower than the banking sector’s average real estate loan growth, loan growth to non-state-owned developers no lower than each bank’s real estate loan growth, and mortgage growth to individuals buying housing from non-state-owned developers no lower than each bank’s mortgage growth, the people said.

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Nov 24
0

Daily Brief Thematic (Sector/Industry): China Property Developers In Distress – Weekly News & Announcements Tracker | Nov 17-23 and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • China Property Developers In Distress – Weekly News & Announcements Tracker | Nov 17-23, 2023

China Property Developers In Distress – Weekly News & Announcements Tracker | Nov 17-23, 2023

By Robert Ciemniak

  • A weekly curated selection of Chinese news articles and company announcements focused on developers in distress
  • We look for their deals, updates, specific project progress news (‘local signals’), as well as relevant local research commentaries about the market
  • We do not verify the underlying data or provide any opinion, we only select and summarize the information; See direct links to sources

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Nov 23
0

Daily Brief Thematic (Sector/Industry): Aircraft Leasing 101 – Heralding the Golden Era and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Aircraft Leasing 101 – Heralding the Golden Era
  • What Oct US SEMI Equipment and Sep SIA/WSTS Global Sales Tell Us?
  • HBM’s Impact on DRAM Revenues

Aircraft Leasing 101 – Heralding the Golden Era

By Mohshin Aziz

  • This report explains the nuts and bolts of the aircraft leasing industry in a simple manner, along with its opportunities, risks, and business outlook.  
  • We are in a golden era, underpinned by strong global traffic recovery, and supply shortage due to technical and manufacturer snafus. Airlines are also increasingly struggling to access credit. 
  • AerCap Holdings NV (AER US) is our top pick on its superior business profile and attractive valuation, the second choice is BOC Aviation (2588 HK). 

What Oct US SEMI Equipment and Sep SIA/WSTS Global Sales Tell Us?

By Andrew Lu

  • SEMI reports Oct front/back end equipment billings decline of 14% and 18% y/y, respectively, which was improved from 18% and 24% y/y decline in September, implying early signs of recovery.
  • WSTS/SIA earlier reported September sales of US$44.89bn, up 1.9% m/m and down only 4% y/y (vs. 16% decline in June), suggesting semi sales y/y improvement and pass the cycle trough.
  • We are positive on SOX INDEX likely to break new high of over 4,000 in six months and expect PC/smartphone/training AI semi and DRAM semi/equipment vendors to outperform in short.

HBM’s Impact on DRAM Revenues

By Jim Handy

  • HBM DRAM, used for GPUs in AI, has enjoyed stable pricing while other DRAM prices have collapsed
  • This has attracted the attention of all DRAM makers, but SK hynix has a first-mover advantage
  • Although increased competition will reduce HBM prices, it will have little impact on GPU maker margins

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Nov 22
0

Daily Brief Thematic (Sector/Industry): Ohayo Japan | All Eyes on Nvidia; Xiaomi’s EV Entry Disrupts Auto Makers and more

By | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

  • Ohayo Japan | All Eyes on Nvidia; Xiaomi’s EV Entry Disrupts Auto Makers

Ohayo Japan | All Eyes on Nvidia; Xiaomi’s EV Entry Disrupts Auto Makers

By Mark Chadwick

  • Overseas: SPX , Nasdaq; Nvidia beats estimates, sees Q4 revenue hitting $20B, but China sales to decline significantly. Stock -1% in extended hours
  • Today: NKY Futs -0.5% v cash. JPY 148.4; TSMC thinking about building a third semicon plant in Japan
  • JapanX: Xiaomi disrupts auto industry, debuting SU7 EV to challenge Tesla, signaling a formidable entry into electric vehicle competition.

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