Daily BriefsTMT/Internet

Daily Brief TMT/Internet: Cambricon Technologies Corp, Taiwan Semiconductor (TSMC) – ADR, Meituan, Empyrean Technology, Changjiu Digital Technology, Interactive Strength Inc, Amazon.com Inc and more

In today’s briefing:

  • CNI Semiconductor Chips Index Rebalance: Multiple Inflows for the Inclusions
  • Taiwan Tech Weekly: Nvidia in Taiwan – Everyone Will Need ‘AI Factories’; Identifying Short Squeezes
  • Meituan (3690 HK) –        Break Below 122.55 May Set Up a Most Bearish Month End Close
  • ChiNext/​​ChiNext 50 Index Rebalance: On Expected Lines as Adds Outperform Deletes
  • Taiwan Shorts Monitor: Top Shorted Names Have Been Squeezed; U.S. Semis Outperforming Taiwan
  • Changjiu Digital Technology Pre-IPO Tearsheet
  • Interactive Strength Inc. – Investment Thesis
  • Amazon.com Inc.: International Expansion & Innovation As A Key Growth Driver – Financial Forecasts

CNI Semiconductor Chips Index Rebalance: Multiple Inflows for the Inclusions

By Brian Freitas

  • There are 3 changes for the CNI Semiconductor Chips Index that will be implemented at the close on 9 June.
  • The inclusions will also be added to other indices over the next couple of weeks and there will be inflows from multiple index trackers.
  • The adds have outperformed and with 9 trading days to implementation of the changes and the inclusions also being added to other indices, there could be further outperformance near-term.

Taiwan Tech Weekly: Nvidia in Taiwan – Everyone Will Need ‘AI Factories’; Identifying Short Squeezes

By Vincent Fernando, CFA

  • Nvidia’s CEO is in Taiwan this week for Computex and the company continues to dominate the headlines announcing Mediatek, Softbank, and WPP key partnerships.
  • Semiconductor shorts have been squeezed after the global rally sparked by Nvidia’s monster results; We released our latest Taiwan Shorts Monitor to identify short squeezes.
  • Earnings: Light this week for Taiwan, however PC industry leaders Hewlett Packard Co (HPQ US) and Dell Technologies Inc (DELL US) will report.

Meituan (3690 HK) –        Break Below 122.55 May Set Up a Most Bearish Month End Close

By David Coloretti, CMT

  • At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
  • Meituan (3690 HK) has been trapped in a symmetrical triangle since bottoming in March 2022. Today the base of the triangle was impulsively broken at 122.55.
  • The base of the triangle also forms part of a much larger LT uptrend that began in 2019. A month end close below 122.55 will target material multi-month downside.

ChiNext/​​ChiNext 50 Index Rebalance: On Expected Lines as Adds Outperform Deletes

By Brian Freitas

  • There will be 10 changes for the Chinext Price Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index. Implementation is at the close on 9 June.
  • One-Way turnover for the Chinext Price Index is estimated at 3.17% while the one-way turnover for the ChiNext50 Index is 6.61%. The one-way trade across both indices is CNY 2.72bn.
  • The adds have outperformed the deletes by a huge margin over the last 3 months and there could be profit taking into implementation.

Taiwan Shorts Monitor: Top Shorted Names Have Been Squeezed; U.S. Semis Outperforming Taiwan

By Vincent Fernando, CFA

  • Investors in the U.S. market seem to be having a more bullish outlook towards U.S.-listed semiconductor names than investors are having for Taiwan’s semi names so far.
  • Stocks with highest short interest as % of float — Some of the top names squeezed… Is HTC next? Also can consider Long Wiwynn vs. Short Wistron.
  • Highest short ratios — Asus, UMC, Transcend shorts squeezed… Could WPG be next? Also can consider continuing Long Asus vs. Short Acer.

Changjiu Digital Technology Pre-IPO Tearsheet

By Ethan Aw

  • Changjiu Digital Technology (CDT CH) is looking to raise about US$150m in its upcoming HK IPO. The deal will be run by Citic Securities and ICBC.
  • Changjiu Digital Technology (CDT) provides comprehensive automobile digital risk management services and automobile dealership operation management services in China. 
  • According to CIC, it was the largest digital risk management service provider in China’s automobile sales and distribution industry in terms of revenue as of FY21 (31st Dec 2021).

Interactive Strength Inc. – Investment Thesis

By Baptista Research

  • This is our first report on Forme and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years.
  • Its top-line revenue has increased from a low starting point, while operating losses, operating cash flows, and EBITDA loss have all decreased.
  • This is unlike many large incumbents like Peloton who have struggled with a high cash burn for many years.

Amazon.com Inc.: International Expansion & Innovation As A Key Growth Driver – Financial Forecasts

By Baptista Research

  • Amazon.com delivered strong results in the first quarter, with global net sales of $127.4 billion, an increase of 11% when adjusted for the approximately 210 basis points unfavorable impact of changes in foreign exchange rates.
  • Moderate discretionary expenditure was observed in the quarter, with a shift towards more affordable goods and strong demand for daily necessities like consumables and cosmetics.
  • The company’s revenue from stores and unit sales increased year over year in Q1 at a faster rate than its fulfillment costs and outbound shipping costs.

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