In today’s briefing:
- Denso (6902) Buys Large Rohm (6963 JP) Stake – Register Gets Squeezier
- Magnificent 7: Global Fund Positioning Update
- Initiation of A Container Port Terminal Product
- Asian Equity: Changes to Model Portfolio: Korea, HK/CN Overweight. India Neutral; ASEAN Underweight
- HDFC Bank (“HDFCB”): Separating the Wheat from the Chaff
- Hyperscalers 2Q25: Revenue Growth Accelerates, Cloud Revenues Accelerate, Capex Higher
- MTK 2Q25: Inline but Positive One-Off. Weak 3Q with Revenue Decline QoQ and Margins Compression.
- Hon Hai(2317.TT): Form Strategic Alliance Via Share Swap with TECO (1504) For Global AI Data Center
- Don Quijote: Fitness, Tourists and Social Media
- Oisix Update: New Lines of Convenience Deli Selling Well
Denso (6902) Buys Large Rohm (6963 JP) Stake – Register Gets Squeezier
- Today after the close, a Nikkei article said Denso Corp (6902 JP) had recently lifted its stake in ROHM Co Ltd (6963 JP) from “about 0.3%” to “just under 5%.”
- Given the recent buy of 28mm shares of Rohm into the Nikkei 225, that means ~11.5% or perhaps more has been taken out of the public’s hands.
- Some may have come from cross-holders, but it’s not clear there are that many. This renders the stock more squeeze-able going forward. Rohm reports next week.
Magnificent 7: Global Fund Positioning Update
- Magnificent 7 positioning remains elevated across global funds, but momentum has clearly stalled, with recent activity pointing to consolidation rather than renewed conviction buying.
- Growth and GARP funds are near fully allocated, while Value and Yield managers remain structurally underweight— potentially limiting the potential for broad-based participation from here.
- Microsoft leads with cross-style appeal; Tesla lags with minimal support. Apple is the conviction underweight, while NVIDIA’s benchmark surge has left it at a record active underweight.
Initiation of A Container Port Terminal Product
- This is a short insight, informing readers that we intend to initiate a container port terminal product, following our recent initiation on Asian Terminals (ATI PM)
- This product will be followed by initiations on high-quality companies like Westports Holdings (WPRTS MK) / ICTSI (ICT PM) / Port of Tauranga (POT NZ), etc, and a monthly screen.
- In this insight, we will highlight our rationale for introducing this product and outline the screening metrics for companies.
Asian Equity: Changes to Model Portfolio: Korea, HK/CN Overweight. India Neutral; ASEAN Underweight
- Since inception on May 15, our Model Portfolio (up 6.2%) underperformed the MSCI Asia-ex-Japan index (up 7.87%) due to underperforming stock picks in India, ASEAN and China consumer proxies.
- The main themes: China’s changing consumption and investment patterns, Korea’s improving corporate governance, continuing global infrastructure investments and India’s earnings disappointment. Korea, HK/China remain overweight; India is downgraded to Neutral.
- We exclude Meituan, Titan, Infosys, Bharat Dynamics, Krafton. We include Laopu Gold, Lonking Holdings, China Hongqiao, AIA and Hyundai Engineering and Construction. We are now Neutral Industrials and Underweight Technology.
HDFC Bank (“HDFCB”): Separating the Wheat from the Chaff
- The stress periods are the times when the mettle of the best gets tested. We are in such a period and HDFCB has remained unscathed.
- Even Bajaj Finance, which is also rated gold-standard in underwriting and risk management, noted issues with asset quality in the current environment, however, HDFCB’s asset quality has remained pristine.
- HDFCB’s retail NPA ex-Agri has been steady at 0.82%. While HDFCB’s competitors have provided a cautious outlook, especially in unsecured loans, HDFCB has provided a stable outlook on asset quality.
Hyperscalers 2Q25: Revenue Growth Accelerates, Cloud Revenues Accelerate, Capex Higher
- Google: increased 2025 Capex ($75bn -> 85bn). Capex will increase in 2026. Higher capex is justified by “strong demand for Cloud products and services“.
- Meta: last quarter increased 2025 Capex ($62.5bn -> 68bn). This quarter, more modest $1bn increase to $69bn. Meta expects “another year of similarly significant capital expenditures dollar growth in 2026”.
- Microsoft: FY26 Capex growth will moderate compared to FY25 (FY25 Capex increased 58% YoY).
MTK 2Q25: Inline but Positive One-Off. Weak 3Q with Revenue Decline QoQ and Margins Compression.
- Q25: inline with a GP one-off. 3Q25: FX impact but still revenue decline QoQ. Add margins compression and 3Q guidance is a large miss: OP -20% below Consensus.
- Management continues to provide very bullish “indications” on growth from 2026-27: AI ASIC, collaboration with Nvidia, Automotive. Multiple analysts questions on risk of hyperscalers projects delayed or cancelled.
- Mediatek is entering very large markets (AI ASIC, Auto) that will provide new growth beyond the exhausted Mobile market. You want to buy into this after a ~20% correction.
Hon Hai(2317.TT): Form Strategic Alliance Via Share Swap with TECO (1504) For Global AI Data Center
- Hon Hai Precision Industry (2317 TT) and Teco Electric & Machinery (1504 TT) held a joint press conference this afternoon to announce the formation of alliance through a share swap.
- Teco (1504) TT and Hon Hai (2317 TT) stated their target markets extend beyond Taiwan and Asia, to include substantial business opportunities in the U.S. and the Middle East.
- Foxconn Chairman Mr. Young Liu also noted that as AI data centers scale up rapidly and demand surges, modular design is increasingly favored.
Don Quijote: Fitness, Tourists and Social Media
- Don Quijote announced a slew of initiatives over the past two months targeting tourists, a move to capitalise on the burgeoning fitness boom, and new social media use.
- The initiatives reflect the continued dynamism in the business both in the discount format and as city centre tourist meccas.
- While the company has closed some overseas stores, the outlook in Asia remains very strong.
Oisix Update: New Lines of Convenience Deli Selling Well
- Oisix was originally known for its food subscription boxes but then expanded into meal kits which brought in a new type of customer looking to save time.
- But with more busy and stressed customers no longer wanting to even spend 20 minutes cooking its meal kits, Oisix has launched 5-minute deli meals.
- Oisix remains the leading independent online food retailer and the most innovative. While subscriber numbers fell recently, sales per user are up.
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