Thematic (Sector/Industry)

OVERSEAS. US Stocks fall as Dicks Sporting and Macy’s raises concerns over US consumer; US Tells China to be more Transparent on Economy; Traders Betting on Blow Out NVIDIA
JAPAN: NKY Futures -0.3% vs Cash; USDJPY 145.9; Japan Defense Ministry to ask for (another) Record Budget; 2 trillion yen request for GX spend in FY24.
JAPAN X: Hitachi Introduces Innovative Executive Compensation Plan Tied to Stock Performance Against Competitors. Interesting structure-lights a fire under senior management.

The Japanese Consumer: Spending Again

By Michael Causton

The following is an analysis of the latest census data to provide investors in Japanese retail and consumer stocks with background on key consumer behaviour trends.
Record levels of income, full to bursting savings accounts averaging ¥19 million, and signs of a falling propensity to save, mean people are spending again.
The only dark cloud is that rising prices remain a concern for many households, restraining spending on disposable items in many low income households.

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Aug 22

Daily Brief Thematic (Sector/Industry): Ohayo Japan|Yields Spike and Stocks UP?! Japan X: Flying Cars-Suzuki and SkyDrive’s Aerial Ambitions and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan|Yields Spike and Stocks UP?! Japan X: Flying Cars-Suzuki and SkyDrive’s Aerial Ambitions
China A-Shares: Construction Materials Slump
China TMT Update-Luckin/CATL/LI/700.HK:HoK Crisis;Coffee Price War Continue; Shenxing Battery
Cannabis – Cannabis News for the Week Ending August 18, 2023
Consumer Hardlines: Mattress Imports
Weekly Sustainable Investing Surveyor – Week Ended August 18, 2023

Ohayo Japan|Yields Spike and Stocks UP?! Japan X: Flying Cars-Suzuki and SkyDrive’s Aerial Ambitions

OVERSEAS. US Yields spike to hit 16 year high; Stocks rise SPX closed +0.7% with Tech leading; China woes continue as forecasts cut; NVDIA and TSLA rebound on street optimism
JAPAN. NKY Futures +0.7% vs Cash; USDJPY 146.2; BOJ on pace to buy record amt of bonds under new YCC regime; Foreigners unloading JGBs; Japan DX market > 2trn yen
Japan X. Flying Cars – investments pouring into the space globally. Skydrive, Japan’s Flying Car beacon bearer, partners with Suzuki to to push the boundries in the space.

China A-Shares: Construction Materials Slump

By Steven Holden

Concerns over Chinese Real Estate sector pushes ownership in Construction Materials stocks to their lowest levels on record.
Fund activity heavily skewed to the sell-side and driven by mass closures in Anhui Conch Cement, Huaxin Cement and Beijing New Building Materials.
Investor sentiment, as measured by A-Share fund activity and positioning, is as low as it gets for the Construction Materials sector.

China TMT Update-Luckin/CATL/LI/700.HK:HoK Crisis;Coffee Price War Continue; Shenxing Battery

Luckin Coffee: Price war continue and competition in low tier cities expansion intensified
CATL/ LI: CATL unveils Shenxing Battery ( + / +)
700.HK: Honor of Kings Faces Reputation Crisis Recently( – )

Cannabis – Cannabis News for the Week Ending August 18, 2023

Revenue of $129.2 million was +3.8% Q/Q, -0.3% Y/Y, and above consensus of $125.0 million.
Adjusted gross margins of 40.4% improved 2.1% Q/Q, declined 2.20% Y/Y, and exceeded estimates of 39.0%.
Expanding East Coast markets drove revenue growth and higher quarterly margins, and were partially offset by price compression in Florida, Illinois, and Massachusetts.

Consumer Hardlines: Mattress Imports

Under Statistics, we update data for June 2023 versus June 2022 (Y/Y comp) and May 2023 (M/M comp).
Each table’s lower half provides similar data for the 12 countries targeted by the new AD petition.
In June, total imported units fell ~9% Y/Y but rose ~11% M/M.

Weekly Sustainable Investing Surveyor – Week Ended August 18, 2023

The WTR Sustainable Index underperformed the broader market, falling 4.8% W/W versus the S&P 500 Index (down 2.1%), the Russell 2000 Index (down 3.4%), and the Nasdaq Index (down 2.2%).
Energy Technology (14.7% of the index) contributed to the index’s underperformance, falling 7.3%, while Industrial Climate and Ag Technology (46.6% of the index) was down 2.1%, ClimateTech Mining was down 7.8%, and Advanced Transportation Solutions was down 6.8%.
Top 10 Performers: LYTS, EOSE, PE, RIDE, PGTK, BWEN, ORGN, SOLO, TGEN, ADSE

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Aug 21

Daily Brief Thematic (Sector/Industry): Ohayo Japan| Pause at End of Brutal Week; JAPAN X: AI-Powered Efficiency: Toyota’s Design Revolution and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan| Pause at End of Brutal Week; JAPAN X: AI-Powered Efficiency: Toyota’s Design Revolution

Ohayo Japan| Pause at End of Brutal Week; JAPAN X: AI-Powered Efficiency: Toyota’s Design Revolution

OVERSEAS. SPX largely unchanged after three days of Equity derisking; Higher US Rates continue to pose a concern; China Property Turmoil Prompts Govt Intervention
JAPAN. NKY Futures +0.1% vs Cash; USDJPY 145.4; Japan’s July CPI slows to 3.1%; Govt considering tax break for Cos that lift wages; INCJ to cut Renesas stake to <10%
JAPAN X. Efficiency and Innovation in Vehicle Design: Toyota’s New Generative AI Approach. We like this development at Toyota and see multiple long-tailed benefits.

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Aug 20

Daily Brief Thematic (Sector/Industry): Semiconductor WFE. China Spending Spree Offsets Memory & Logic Declines and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Semiconductor WFE. China Spending Spree Offsets Memory & Logic Declines

Semiconductor WFE. China Spending Spree Offsets Memory & Logic Declines

By William Keating

Q2’23 revenues for the top 5 WFE players amounted to ~$22 billion down ~10% QoQ and essentially flat YoY.
While WFE spending as a whole will decline 20% YoY, ASML & AMAT are outperforming, LRCX & TEL are underperforming with KLAC somewhere in between.
Increased China WFE spending on legacy tools is helping offset ongoing declines from memory and Logic/Foundry

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Aug 19

Daily Brief Thematic (Sector/Industry): Japan Weekly | Stocks Lower and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Japan Weekly | Stocks Lower
Signs Abound that Asia Gaming Gaining Strength Despite China Macro Woes

Japan Weekly | Stocks Lower

Indiscriminate selling of Japanese stocks with only 10% of stocks up on the week – Topix -3% lower week-on-week
Lots of scary headlines with US mortgage rates hitting 20 year highs and China’s real estate sector imploding
We highlight the stocks that have been moving in the market this week

Signs Abound that Asia Gaming Gaining Strength Despite China Macro Woes

By Howard J Klein

Decline in China economy has tinted investor views into the Asian casino sector. But valuations are attractive.
GGR continues to gain but high youth unemployment blemishes estimates of the return of younger demos who comprise a key segment of Macau visitors.
Strong entry points for Wynn Macau and Sands China persist, but investors still appear to be hesitant to enter the sector until more visible signs of China recovery begin.

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Aug 18

Daily Brief Thematic (Sector/Industry): Ohayo Japan|Global Yields Hit 20Yr High and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan|Global Yields Hit 20Yr High, Tech Investors Head for Exits; NUGGET: Trapped in Russia?
China Property Developers In Distress – Weekly News & Announcements Tracker | 11-17 August 2023
Southeast Asia Is Looking Mighty Fine to China’s Data Center Firms

Ohayo Japan|Global Yields Hit 20Yr High, Tech Investors Head for Exits; NUGGET: Trapped in Russia?

OVERSEAS. Global Yields hit 20 year high; US Yield continue upward trajectory; US Mortgage Rates above 7%; Tech Investors heading to exits; China steps up battle to protect Yuan.
JAPAN. NKY Futures -0.9% vs Cash; USDJPY 145.9; Japan Authorities adopt wait and see approach on the USDJPY; Unpopular Kishida to call snap election ?
NUGGET. Russia-Ukraine conflict/proxy war vs West recently saw Russia seizing the local operations of Calsberg and Danone. Japanese companies hanging in Russia could be at risk.

China Property Developers In Distress – Weekly News & Announcements Tracker | 11-17 August 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

Southeast Asia Is Looking Mighty Fine to China’s Data Center Firms

By Caixin Global

Chinese data center firms are ramping up their overseas expansion to ride the artificial intelligence (AI) wave, especially in Southeast Asia, said a senior executive at GDS Holdings Ltd., one of the country’s largest data center operators.
While traditional computing requires proximity to the end-use market, AI computing power is more oriented towards natural resources, and Southeast Asia has both resources and cost advantages, said Jimmy Yu, senior vice president of international business at GDS in an interview with Caixin on July 27.
“Developing AI computing power requires a resource-rich region to carry out training and inference in large models. Southeast Asia has rich land and power resources, and the costs are much lower than in the Middle East, Americas, or Europe,” Yu said.

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Aug 17

Daily Brief Thematic (Sector/Industry): Ohayo Japan|Fed Minutes Rekindle Fears of More Hikes; NUGGET: Toyota & FCVs – A Side Bet to Keep ? and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan|Fed Minutes Rekindle Fears of More Hikes; NUGGET: Toyota & FCVs – A Side Bet to Keep ?

Ohayo Japan|Fed Minutes Rekindle Fears of More Hikes; NUGGET: Toyota & FCVs – A Side Bet to Keep ?

OVERSEAS. Fed Minutes Rekindle Propsects for Futher Rate Hikes; Equities continue fall as UST Yield continue to rise; Investors Flee China; EU: Holland in recession; TESLA cuts px in China
JAPAN. NKY Futures -0.4% vs Cash; USDJPY 146.4; USDJPY hits 9 month low – MoF intervention watch on; Japan Inbound recovers to ~80% vs Pre-COVID; Japan Corp Profits Rise Again
NUGGET. Toyota has kept its hydrogen fuel-cell vechicle push alive, despite the fact the world has moved en-mass to battery electric vehicles. We think this side bet is worth keeping.

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Aug 16

Daily Brief Thematic (Sector/Industry): Ohayo Japan|China Worries Sinks Equities; NUGGET: Japan Post Holdings – More Behind and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan|China Worries Sinks Equities; NUGGET: Japan Post Holdings – More Behind
China TMT Update-BABA/VIPS/JD/PDD/3690.HK/1810.HK/2454.TT/BEKE-Catering Was the Top Growing Category
China’s Extremely Rare Policy to Attract Foreign Investment and the Signals Behind
Weekly Sustainable Investing Surveyor – Week Ended August 11, 2023

Ohayo Japan|China Worries Sinks Equities; NUGGET: Japan Post Holdings – More Behind

OVERSEAS. Equities sink on China Worries; China enacts emergency rate cuts; Stops publishing youth employment data; Strong US Retail sales pushes Yields; New US Bank regulation to hit profits
JAPAN. NKY Futures -1% discount vs Cash; USDJPY 145.6; Japan watching Yen – to take appropriate action says Fin Minister; JP GDP beats expectations; Typhoon Lan rips Western Japan
NUGGET. Japan Post Holdings -300 billion yen share buyback; With a pile of cash from Japan Post Bank Sale (1.2 trillion to be exact), we think this just the start

China TMT Update-BABA/VIPS/JD/PDD/3690.HK/1810.HK/2454.TT/BEKE-Catering Was the Top Growing Category

BABA/VIPS/JD/PDD/3690.HK: Catering was the top growing consumption category in July (-/-/-/+)
1810.HK/2454.TT: Xiaomi launches new products at annual Lei Jun conference (+)
Property sector update: New home sales in July remain weak, and expect the landing of supportive policies（/）

China’s Extremely Rare Policy to Attract Foreign Investment and the Signals Behind

By Xinyao (Criss) Wang

It’s the first time in nearly thirty years for the State Council to directly issue The Guidelines giving specific instructions on attracting foreign investment. Therefore, it’s necessary to interpret the signals behind.
The core requirement is for foreign companies to bring their production capacity/core technology to China (e.g. Tesla, Moderna). The ultimate goal is to help China’s industry upgrade, achieve technological breakthroughs.
However, the investment logic of “import substitution” naturally conflicts with attracting foreign investment and guarantee the “national treatment” of foreign-invested enterprises. So, investors may need to change thinking mode/strategies.

Weekly Sustainable Investing Surveyor – Week Ended August 11, 2023

Electrovaya is a leading manufacturer of safe and long-lasting LIBs with differentiated performance and safety attributes, according to the company.
Electrovaya has two primary battery platforms: Infinity and SSB. The Infinity battery platform targets commercial vehicles, including lithium-ion e-forklifts, e-buses, and e-trucks.
This product has been launched commercially through global partners, including Toyota, Raymond, and Walmart.

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Aug 15

Daily Brief Thematic (Sector/Industry): Chinese EV’s and the Lagging Edge Price War and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Chinese EV’s and the Lagging Edge Price War
Ohayo Japan| Tech Lead in Equity Rebound Amid Concerns; NUGGET: Activism-Japanese Firms Expect It !
Q2’23 Foundry Flounders As Inventory Stubbornly Lingers
[Blue Lotus Macro]: Underestimating the Pain but Unable to Turn Back
China TMT Update-ACMR/981.HK/1347.HK/NIO/1211.HK/XPEV/BYD-Tesla Cuts Model Y Prices/Geely Cuts Price
The Highlights – Cannabis News for the Week Ending August 11, 2023

Chinese EV’s and the Lagging Edge Price War

By Douglas O’Laughlin

This earnings season has highlighted the robust performance of older-generation (“trailing edge”) companies.
Their inventories have also been rising. At the same time, there’s a noticeable demand slump in China.
Surprisingly, Chinese semiconductor firms are increasing their investments in older technology, known as the “lagging edge” capacity. Put the pieces together, and there’s a big story here.

Ohayo Japan| Tech Lead in Equity Rebound Amid Concerns; NUGGET: Activism-Japanese Firms Expect It !

OVERSEAS. US Equities rebound led by Tech as NVIDIA +7% gets boost from MS report; China troubles persist: Country Garden suspends bond trading; Foreign Investors losing interest in China
JAPAN. NKY Futures +0.7% vs Cash; USDJPY 145.5; Yen Weakens be beyond 145 to USD, heads to 146 on widening spreads; JP M&A Boom as Cos seek improvements; Dentsu Miss
NUGGET. Activism-Japanese Firms Expect It ! June’s Reuters survey of companies in Japan revealed this fact. At the very minimum, an implicit acknowledgement that there is room for improvement

Q2’23 Foundry Flounders As Inventory Stubbornly Lingers

By William Keating

Foundry segment is on track to decline 15% YoY with no prospects of a meaningful H2 recovery
Inventory levels across smartphone, PC and consumer electronic supply chains remain elevated, plagued by lack-lustre end user demand.
At least some of the key players appear to be lowering prices but this is highly unlikely to stimulate end user demand and may actually make things worse

[Blue Lotus Macro]: Underestimating the Pain but Unable to Turn Back

The slew of negative economic data for July traces its root to the inadequacy of industries Chinese government wants to promote towards generating employment, income and investments;
With overwhelming advantage in financing, US’s reshoring initiative is bound to succeed in its first iteration.
For China, boosting demand is no longer an option. Exporting deflation might be the only answer.

China TMT Update-ACMR/981.HK/1347.HK/NIO/1211.HK/XPEV/BYD-Tesla Cuts Model Y Prices/Geely Cuts Price

ACMR/981.HK/1347.HK: US outbound investment restrictions likely to exempt publicly traded securities (+/+/+)
NIO/1211 HK: Geely’s sub-brand Zeekr cut price of its 001 model (-/-)
XPEV/NIO/BYD: Tesla China cuts Model Y prices and offers insurance subsidy for Model 3 (-/-/-)

The Highlights – Cannabis News for the Week Ending August 11, 2023

Global equities slipped this week, with the MSCI World Index down 0.28% and the S&P 500 down 0.26%.
The MSCI World and S&P 500 are down 2.85% and 2.65% in August, respectively.
After a strong rally from March through July, markets are taking a breather.

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Aug 14

Daily Brief Thematic (Sector/Industry): Ohayo Japan| Uncertainty Reigns in Equity World; NUGGET: Honda – A Bike Company that Makes Cars and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan| Uncertainty Reigns in Equity World; NUGGET: Honda – A Bike Company that Makes Cars
China Tourism Sector: Anticipating More Upward Strengths
Weekly Stock Bullfinder – Week of 8/14
The Future Directions of A-Share After the Tumble and the Opportunities Behind

Ohayo Japan| Uncertainty Reigns in Equity World; NUGGET: Honda – A Bike Company that Makes Cars