In today’s briefing:
- Is Huawei New AI Chip Is Bad for Nvidia? New US Export Licensing Is the Real Issue (Part 2)
- Asian Equities: Overvalued, Over-Leveraged, Low Growth – a Different Look
- Huawei New AI Processor Ascend 910C and the Long History Behind It (Part 1)
- Samsung Electronics: Global Funds Hit Rock Bottom
- United Microelectronics: Heavy Exodus
- Cisarua Mountain Dairy (CMRY IJ) – Assuringly Diverse Protein Provider
- ICBC: Signs of a Turnaround in Fund Positioning
- Strong Volumes Offset by Declining Margins and Capital Efficiency at UltraTech
- Asia Real Estate Tracker (29-Apr-2025): Link Points Tokyo expansion with Nuveen executive hire
- [Earnings Preview] BP’s Outlook Dims with Lower Hydrocarbon Output and Softer Trading Results
Is Huawei New AI Chip Is Bad for Nvidia? New US Export Licensing Is the Real Issue (Part 2)
- Apparently, on news of this new Huawei chip in WSJ, Nvidia’s stock decline -2% yesterday. That’s strange – not new news, the real issue is new US export license requirements.
- Nvidia’s problem is not Huawei, but US restrictions on selling GPU to China. Nvidia announced writing off US$5.5bn on 9 April 2025 (for H20). AMD estimates US$800m (for MI308).
- Assume that Nvidia and AMD will not sell any AI chips to China. Same for HBM memory.
Asian Equities: Overvalued, Over-Leveraged, Low Growth – a Different Look
- We identified overvalued, over-leveraged, low growth stocks on EPS growth, high PEG, low ROE, high P/BV, high leverage. Clients opined that EBITDA is more stable earnings parameter for such stocks.
- Based on clients’ feedback we now screen the stocks using EBITDA growth as the earnings growth parameter and EV as the corresponding valuation parameter.
- Our screen yields 30 stocks – 20 from Japan (largely property/REIT) and 10 from HK/China. 7 stocks are common to the EPS-PE and EBITDA-EV lists – mostly from Japanese property.
Huawei New AI Processor Ascend 910C and the Long History Behind It (Part 1)
- China was ahead of the US in AI semiconductor and applications in 2015-20. Huawei had a complete AI processor and software platform. Losing access to TSMC froze Huawei’s progress.
- Most likely, Huawei new AI processor Ascend 910C is made by SMIC on 6nm. Power Efficiency of Ascend 910C is poor versus the latest Nvidia GPU, but similar to N-2.
- Semiconductor Manufacturing International Corp (SMIC) (981 HK) 7-6nm and access to HBM memory are major limiting factor to the chip volumes and performance.
Samsung Electronics: Global Funds Hit Rock Bottom
- Global equity fund ownership in Samsung Electronics has dropped to the bottom of its 10-year range.
- The percentage of global funds invested has fallen from 32.6% to 23.5% over the past 12-months.
- Key Growth investors from Schroders to Templeton exit the stock, leaving an investor base largely comprised of Value oriented funds.
United Microelectronics: Heavy Exodus
- Collapse in EM fund positioning as ownership levels approach record lows.
- Over the past six months, there has been a heavy sell-side bias, with Fisher, BNP, and Quilter among those exiting the stock.
- UMC falls to the 13th most widely owned company in the Semiconductor sector.
Cisarua Mountain Dairy (CMRY IJ) – Assuringly Diverse Protein Provider
- Cisarua Mountain Dairy (CMRY IJ) booked a strong start to the year, with sales growing +12% YoY, but dairy was down while premium foods drove higher revenues.
- The company continues to drive growth through general trade and Miss Cimory, with plans to continue increasing its reach through more affordable products in both dairy and premium consumer foods.
- Cisarua Mountain Dairy‘s strategy to shift the emphasis toward home consumption for consumer foods and an increasing emphasis on affordable products will help to underpin long-term sustainable growth. Valuations attractive.
ICBC: Signs of a Turnaround in Fund Positioning
- Consistent declines in fund ownership in ICBC finally hit a floor.
- Over the past six-months, 8 new positions — led by Goldman Sachs and Heptagon — have outpaced 3 closures, with 29 buyers versus 18 sellers.
- ICBC is the 6th most widely owned stock in the China & HK Financials sector, ahead of Bank Of China Ltd but behind China Merchants and China Construction Bank.
Strong Volumes Offset by Declining Margins and Capital Efficiency at UltraTech
- FY25 EBITDA growth was primarily volume-driven, with EBITDA/ton declining to Rs988 due to flat realizations and initial dilution from acquisitions.
- UltraTech is investing Rs1,800 crore to enter the cables and wires segment, targeting December 2026 commissioning and leveraging its existing retail and B2B networks.
- At Rs12,000 per share, the stock trades at 51–53x FY26E EPS, supported by expectations of sustained volume growth and operational efficiency gains.
Asia Real Estate Tracker (29-Apr-2025): Link Points Tokyo expansion with Nuveen executive hire
- Link has appointed a former Nuveen executive to lead its expansion into Japan, signaling the company’s commitment to growing its presence in the region.
- Amara Chairman is spearheading a $392 million bid to privatize a Singapore hotel group, demonstrating a growing trend of investments in the hospitality industry.
- ANREV reports a significant decline of over 50% in global real estate capital raising from its peak in 2022, highlighting challenges in the current market environment.
[Earnings Preview] BP’s Outlook Dims with Lower Hydrocarbon Output and Softer Trading Results
- BP’s Q4 revenue and EPS are projected to decline by 7.4% YoY and 43.3%, respectively, due to lower hydrocarbon output, weaker gas marketing, and subdued trading results.
- BP expects oil production earnings to remain flat sequentially, with refining margins adding USD 100-300 million to Q1 earnings, while oil trading performance is anticipated to remain unchanged.
- The company expects net debt to increase by USD 4 billion from the previous quarter’s USD 23 billion, citing seasonal inventory builds and timing of payments.
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