In today’s briefing:
- Taiwan Dual-Listings Monitor: TSMC Trading Range Breakdown? ChipMOS Discount Rare Long Opportunity
- Tech Supply Chain Tracker (13-Mar-2025): Semiconductor industry forecast for 2025.
- Taiwan Tech Weekly: If TSMC Joins Intel for Foundry, It Will Entrench Dominance; Structural Long
- BP’s Strategy Reset Stumbles as Dividend Cut, Oil & Gas Output Target Disappoints
- Lonking (3339 HK): Boom, Boom, Boom
- Initiation – Moresco (5018 JP)
- Brazil Banks – Buy Bradesco for Value and Improving Returns, Nubank Is Stretched on Valuations
- SAP SE (SAP GR): A Lot of Efficiency Ahead
- Intel: A Better CEO that Understand that Intel Should Fix Its Own Problems, Not Compete with TSMC
- BYD (1211 HK) 2024 Result Preview: Expanding in Domestic Market and 19% Upside Left
Taiwan Dual-Listings Monitor: TSMC Trading Range Breakdown? ChipMOS Discount Rare Long Opportunity
- TSMC: +14.1% Premium; Given Latest Market Weakness, Safest to Wait for a Slightly Lower Premium Before Going Long
- ASE: -1.8% Discount; Good Level to Go Long the Spread
- ChipMOS: -6.8% Discount: Long the Spread, Historical Extreme Discount Level
Tech Supply Chain Tracker (13-Mar-2025): Semiconductor industry forecast for 2025.
- Semiconductor industry set to see significant growth by 2025 due to technology advancements and global demand for electronic devices.
- TSMC proposes joint venture with Intel’s foundry division, showcasing industry collaboration for mutual benefit and innovation.
- Huawei takes action against recruitment fraud, penalizing 72 employees, while Altera CEO highlights FPGA advantages over ASIC in AI technology.
Taiwan Tech Weekly: If TSMC Joins Intel for Foundry, It Will Entrench Dominance; Structural Long
- TSMC Eyes Intel Foundry Joint Venture: Strategic Expansion or Risky Bet?
- TSMC Addresses U.S. Expansion Concerns: Strengthens TSMC Position & Positive for Semi Industry Capex
- MWC Barcelona Showcased The 6G Showdown: MediaTek Vs. Qualcomm in the Race for Wireless Supremacy
BP’s Strategy Reset Stumbles as Dividend Cut, Oil & Gas Output Target Disappoints
- BP will increase oil and gas spending to USD 10 billion annually through 2027, comprising 66%-70% of total capex, while slashing renewable energy investments by over USD 5 billion.
- BP reduced its quarterly buybacks to USD 0.75–1 billion from USD 1.75 billion and lowered annual capex to USD 13–15 billion through 2027.
- Elliott Investment Management is reportedly dissatisfied with BP’s strategy reset, criticizing it for lacking urgency and ambition, potentially prompting further strategic adjustments from the company.
Lonking (3339 HK): Boom, Boom, Boom
- Industry sales of wheel loaders and excavators surged 16.5% and 27.2% in 2M25. For Feb alone, the growth rates are even more impressive at 34.4% and 52.8%, respectively.
- Post-CNY, the utilisation hours and rates of construction machinery rose 70.3% YoY and 12.3pp. Market share gain in developing countries will drive exports.
- Government supportive policies announced in NPC will provide support to demand. Current consensus forecasts for profit decline in FY25 are disconnected from industry data.
Initiation – Moresco (5018 JP)
- MORESCO Corporation (hereinafter referred to as “MORESCO” or “the Company”) is a R&D-oriented company that has developed products boasting market-leading shares in Japan, such as fire-resistant hydraulic fluid for the steel and automotive industries and liquid paraffin used as ingredients in cosmetics, with the aim of achieving domestic production of special lubricants.
- In recent years, the Company has successfully brought to market water soluble die casting lubricants and environmentally friendly hot melt adhesives.
- In addition, it has also gained a leading global share in synthetic lubricants such as high temperature greases and hard disk surface lubricants.
Brazil Banks – Buy Bradesco for Value and Improving Returns, Nubank Is Stretched on Valuations
- We stay negative on Nubank, even after the recent share correction; our rationale is tough competition, especially in Mexico, and worsening credit quality to remain a key risk in Brazil
- We believe that the fundamental outlook for Bradesco should improve further, supported by its strong insurance operations; conservatively, we estimate insurance could account for two thirds of group value
- Our neutral on Banco do Brasil is due largely to heightened political risk; holding company Itausa is the best indirect vehicle through which to gain equity exposure in Banco Itaú
SAP SE (SAP GR): A Lot of Efficiency Ahead
- FY 2025 guidance exceeds previous expectations, with cloud revenues expected to grow 26-28%, and profit to rise 26-30%. Cloud revenues are expected to reach 70% by 2027.
- SAP optimises its cloud offerings and Opex, with a focus on driving long-term growth through its ‘land and expand’ strategy and AI. Recent senior appointments aim to support operational efficiency.
- SAP expands AI capabilities, with 50% of deals involving AI use cases. It is aiming to enhance AI agents while positioning itself to benefit from lower AI costs.
Intel: A Better CEO that Understand that Intel Should Fix Its Own Problems, Not Compete with TSMC
- The return of Mr. Tan as CEO suggests that spinning off or selling Intel Foundry will accelerate, Intel’s focus should improve.
- It probably also means scaling down considerably Intel manufacturing plans and outsourcing more to TSMC. If you can’t beat them, join them.
- Now is not a good time to buy Semiconductor stocks. It will take a couple of years to fix Intel’s problems. TSMC will benefit.
BYD (1211 HK) 2024 Result Preview: Expanding in Domestic Market and 19% Upside Left
- BYD will release its 2025 annual results on March 24.
- The stock price has risen by 38% since our last buy rating on January 6.
- However, we believe there is still an upside of 19% for the next twelve months.
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