In today’s briefing:
- Ohayo Japan | DeepSeek Sinks AI Market
- Updated Thoughts on Some of My Biggest Positions In The Cheap Japanese Basket and Some New Positions
- [Blue Lotus China New Consumer Weekly, 4/52] Luckin Coffee’s Overseas Expansion Is Worth Waiting For
- Japan Morning Connection: US Tech Meltdown Set to Hit Japan AI/Tech Names Again
- HSTECH Index. Identifying Individual Names with Greater Potential Upside
- Big Tech’s Deteriorating Earnings Quality
- Singapore Market Roundup (27-Jan-2025): MPACT’s overseas assets weak in 3QFY2025.
- Thematic Report : Betting on Indian’s Traffic Control Systems
- China Housing: Primary Vs Secondary Markets (2019-2024) – An Increasingly Important Distinction
- Biopharma Week in Review – January 27, 2025
Ohayo Japan | DeepSeek Sinks AI Market
- The Nasdaq tumbled over 3% on Monday, driven by a selloff in AI-related stocks after China’s DeepSeek claimed its AI assistant rivals leading models at lower costs
- Nvidia (-17%) led the decline, shedding $589 billion in market value, while chipmakers like ARM (-10%) and Broadcom (-17%) also fell
- FANUC raised its full-year ordinary profit forecast to ¥190 billion from ¥185 billion, marking its third consecutive upward revision this fiscal year.
Updated Thoughts on Some of My Biggest Positions In The Cheap Japanese Basket and Some New Positions
- Dynam Japan is the largest operator of Pachinko halls in Japan.
- The company has been profitable for the past15 years, though profits have been in decline.
- Their halls are mostly located in suburban areas with less competition, but they do have some in big cities.
[Blue Lotus China New Consumer Weekly, 4/52] Luckin Coffee’s Overseas Expansion Is Worth Waiting For
- Employment picture worsened in December. We believe Chinese government will erect hiring-related corporate subsidy in 2025;
- Early attempts at street drink overseas have failed. But new attempts from Luckin might well work, over time;
- Tesla’s new Model Y received a raving reception from Chinese consumers. But we doubt it can last.
Japan Morning Connection: US Tech Meltdown Set to Hit Japan AI/Tech Names Again
- Will we see more of the same ineffectual export curbs or a lightening of export restrictions?
- Expect a continued rotation into all things non-tech in JP including Home Builders who jumped overnight as yields sank.
- Plenty of shorts with ample downside including Hitachi, Fuji Elec, Hokkaido Elec outside of the mainstay AI plays.
HSTECH Index. Identifying Individual Names with Greater Potential Upside
- Following on from our last HK piece, we take a closer look at the tech sector
- While the overall HSTECH index provides a good risk-reward, some
- Individual E-commerce & software names offer much more upside than downside
Big Tech’s Deteriorating Earnings Quality
- Almost one and half years ago, I wrote about “The Curious Case of Big Tech”, in which I highlighted that much of the big tech was actually “deep value” investments back in 2013.
- In fact, I also mentioned “Meta, and Amazon are currently trading at lower OCF multiple than they were trading back in 2013”.
- Both Meta and Amazon have comfortably outperformed both S&P 500 and Nasdaq 100 since then (not claiming any causal relationship, of course).
Singapore Market Roundup (27-Jan-2025): MPACT’s overseas assets weak in 3QFY2025.
- MPACT’s overseas assets underperformed in 3QFY2025 according to analysts, highlighting a weakness in that area of the business.
- DBS has launched ETFs in US equities, AI, small caps, and gold, expecting them to perform well under Trump 2.0 presidency.
- Both RHB and DBS remain optimistic about ESR REIT despite a decrease in DPU, indicating a bullish outlook on the real estate investment trust.
Thematic Report : Betting on Indian’s Traffic Control Systems
- The Indian train control system industry is on the cusp of remarkable growth, driven by a forecasted CAGR of 12.7% through CY30
- His surge is propelled by the increasing adoption of advanced safety technologies like Kavach, coupled with the government’s strategic focus on modernizing railway infrastructure.
- High capital investments, technical barriers and infrastructure limitations are of the challengers sector is facing
China Housing: Primary Vs Secondary Markets (2019-2024) – An Increasingly Important Distinction
- Historically, the “housing market” in China largely meant the market for the development of new homes, with the secondary market playing a much smaller role
- But this has changed in the past 2 years, with a greater shift of demand to secondary, given the risks of developers not delivering, and the lower prices in secondary
- Based on the data for both segments, for 10 major cities, we illuminate in this note the ‘primary vs secondary’ dynamics and its implications
Biopharma Week in Review – January 27, 2025
- Academia was troubled last week by Trump’s broad pause on external communications from federal health agencies, disrupting study sections (NIH), public health publications (CDC), and treatment guidelines (FDA).
- The pause remains in effect until February 1, which happens to be after RFK Jr.’s confirmation hearings for HHS secretary on January 29 and 30.
- In industry news, NVO saw some redemption with positive amycretin obesity data, with a positive read-through for ZLDPF
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