Daily Brief Thematic (Sector/Industry): EP 125: What’s Going on with RISC-V? Update on Intel and more

• Global Foundries acquiring MIPS, sparking conversation about RISC V’s role in the ecosystem
• Global Foundries focusing on offering IP and services in niche markets with potential for growth
• MIPS will continue to operate independently, providing turnkey solutions for RISC V and potential customizations for customers

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• U.S. stocks rallied from session lows to close higher on Wednesday after President Trump denied plans to fire Federal Reserve Chair Jerome Powell
• US June Producer Price Index showing no monthly change and a 2.3% annual rise, below estimates, eased inflation concerns,
• IHI targets an operating profit margin of 11% by March 2030, up from 8.8% in FY25, driven by improved profitability in its defence business

• There is a pick-up in heavy machinery sales in Jun, benefiting Lonking Holdings (3339 HK), Sany Heavy Equipment (631 HK), and Zoomlion Heavy Industry H (1157 HK). 
• Indications are for strong 1H25 earnings, with Guangxi Liugong A (000528 CH) seeing 20-30% growth. 1Q25 results of the peers also pointed to solid interim profit.
• Despite an average of a 44.6% rally for the HK-listed companies in the sector, their FY25F PER of 10.4x is undemanding. The current consensus forecasts are too conservative. 

• The HFD from ASIC on insolvencies in Australia points to a weak credit metric environment for Australian banks. 
• Some banks report rising bad loans but relatively stable credit costs, which tends to not last indefinitely. 
• Far worse insolvencies in many sectors YoY to 30 June should be a window on higher impairment costs for Australian banks.

• Cautious ASML guidance sets dour tone to start but weakness for semi’s limited.
• JNJ beats handily thanks to FX and medtech which should cause pharma and likes of Terumo to squeeze off the bell.
• 7&I likely to be weak to start but unlikely there was too much residual expectation priced in after a difficult road for CT.