[Eng] CSOP Regional Market Report-15Jul24

【APAC】

South Korea exports jumped 33.8% in the first 10 days of July, while imports rose 26.7% resulting in a trade deficit of $2b, according to a statement from Korea Customs Service. Chip Exports Jump 85.7% and car exports rise 9.8%

【Japan】

On July 12, the Nikkei 225 in the Tokyo stock market fell for the first time in four trading days, falling 1,033 points (a drop of 2%) from the previous day, closing at 41,190 points. The U.S. Consumer Price Index (CPI) released was lower than market expectations, causing the yen exchange rate to surge. At the same time, the decline in U.S. technology stocks also had an impact. As of the previous day, the Nikkei 225, which had hit a record high for three consecutive days, stopped rising continuously. The appreciation of the yen and the fall of the U.S. stock market have a double impact on the Japanese stock market

【China】

The Bureau of Statistics said that short-term fluctuations will not change the long-term positive trend. In the second quarter, the contribution of gross capital formation to economic growth increased, while the contribution of final consumption expenditure decreased. The Government Work Report sets China's economic growth target for this year at around 5 percent.

·         Exports (in US dollars) in the second quarter were 5.9% higher than the same period last year. The trade surplus of exports minus imports increased by 16% year-on-year.

·         In the first half of the year, the added value of industrial enterprises above designated size increased by 6% year-on-year, in line with market expectations. June's year-on-year growth rate was 5.3%, higher than the market expectation of a 5% increase.

·         In the first half of the year, the total retail sales of consumer goods reached 23.6 trillion yuan, an increase of 3.7% year-on-year, lower than the expected increase of 4%. The year-on-year growth rate in June was 2%, which was worse than the market expectation of 3.4%.

·         In the first half of the year, the urban surveyed unemployment rate averaged 5.1 percent, down 0.1 percentage points quarter-on-quarter and 0.2 percentage points year-on-year.

【India】

·         India can boost its economic growth rate by as much as 0.5 percentage points by driving more workers from agriculture to manufacturing, according to researchers from the International Monetary Fund.

·         The estimates are based on the assumption that 5% of agricultural workers can be absorbed in manufacturing, the researchers said in an IMF working paper this week. To do that, the government will need to undertake a number of economic reforms to increase the supply of jobs in manufacturing, they said.

【APAC】

·         As the exclusive supplier of Nvidia and Apple's most advanced chips, TSMC reported June revenues of NT 207.9 billion. This indicate as a 673.5 billion, surpassing the average forecasted increase of 35.5%.

·         The Wednesday sales figure comes days after the world’s largest contract chipmaker briefly reached a $1 trillion market capitalization on a tide of investment into artificial intelligence-related data centers and devices. Businesses around the world are racing to buy up hardware such as Nvidia chips to build up AI-supporting infrastructure. That’s prompted Wall Street brokerages to lift their price targets for TSMC, citing the chipmaker’s potential move to charge customers more in 2025 to elevate earnings further.

South Korea's Samsung Electronics (005930.KP) has won an order from Japan's Preferred Networks to produce artificial intelligence chips using a 2nm process and advanced chip packaging. Additionally, Samsung's labor union has announced plans for an indefinite strike.

At its global product launch event, South Korea's Samsung Electronics (005930.KP) unveiled the foldable screen phones Galaxy Z Fold 6 and Galaxy Z Flip 6. The starting price for the Fold 6 is 1,899, while the Flip 6 starts at 1,099. Additionally, Samsung has initiated a cost-reduction project for Micro LED TVs, aiming to reduce production costs to one-tenth of the current level within the next 2-3 years.

According to reports, TSMC (2330.TT) will begin trial production of 2nm chips next week. These chips are expected to be first used in Apple's iPhone 17 series.

【Japan】

Major Japanese semiconductor makers including Sony Group (6758 JT) and Mitsubishi Electric (6503 JT) are planning around 5 trillion yen ($31 billion) in capital investments through 2029, as they move to boost production of power devices and image sensors.

Japanese company Resonac Holdings (4004 JT) announced the formation of a corporate alliance consisting of 10 companies from Japan and the United States. This alliance will collaboratively focus on the development and evaluation of the back-end process of assembling semiconductors into final products. Semiconductor material manufacturers and other related companies will come together to develop back-end process technologies and smoothly collaborate with major U.S. tech giants. The goal is to establish a development and evaluation base in Silicon Valley to gather information and accelerate the development process.

Japanese electronic component manufacturers plan to increase capital spending by 5.4% this fiscal year. According to investment plans compiled by Nikkei from 32 companies, including Murata Manufacturing (6981 JT), TDK (6762 JT), and Kyocera (6971 JT), total capital spending for the fiscal year 2024 is expected to reach ¥1.4 trillion ($8.7 billion), a 46% increase from four years ago.

Honda Motor (7267 JT) plans to merge its two car factories in Thailand by 2025. As a result, the company's annual car production capacity in Thailand will drop by more than half, from 270,000 units.

Toyota (7203 JT) joins seven other automakers as an investor in EV charging network IONNA to support the buildout of its high-powered charging network for battery electric vehicles across North America.

In the nine months period, Fast Retailing’s revenue totaled 2.3665 trillion yen, up 10.4 percent, while operating profit rose to 401.8 billion yen, up 21.5 percent and profit attributable to owners of the parent increased to 312.8 billion yen, an increase of 31.2 percent. In the third quarter, the company said, strong performances from Uniqlo operations in the North America, Europe, and Southeast Asia regions, as well as Uniqlo Japan, helped fuel the record consolidated results. For FY24, the company forecasts a record performance and plans to increase the annual dividend by 110 yen.

【China】

The new generation Xiaomi(1810.HK) smartphone smart factory in Beijing's Changping district, with an investment of 2.4 billion RMB, has officially been put into operation. The factory has a building area of 8,100 square meters and an expected annual production capacity of 10 million smartphones. The Xiaomi MIX Fold 4/Flip folding screen smartphones, which are set to be released this month, will be produced at this factory.

The new generation Xiaomi(1810.HK) smartphone smart factory in Beijing's Changping district, with an investment of 2.4 billion RMB, has officially been put into operation. The factory has a building area of 8,100 square meters and an expected annual production capacity of 10 million smartphones. The Xiaomi MIX Fold 4/Flip folding screen smartphones, which are set to be released this month, will be produced at this factory.

Kuaishou (1024.HK) announced a HKD 6 billion automatic share buyback plan. The plan will take effect on August 8 of this year and will be completed by May 30 of next year.

According to informed sources, NIO's (9866.HK) self-developed intelligent driving chip, the "Shenji NX9031," has already been taped out and is currently undergoing testing. It is expected to debut in the first quarter of 2025, installed in NIO's flagship sedan, the ET9.

XPeng Motors (9868.HK) Chairman He Xiaopeng has announced that their new model will be named the P7+, with a length exceeding 5 meters.