[Chinese Version] Southern East England Regional Market Report - 15Jul24

[Asia Pacific]

According to a statement from the Korea Customs Service, South Korea's exports increased by 33.8% in the first 10 days of July, while imports increased by 26.7%, leading to a trade deficit of 2 billion US dollars. Among them, chip exports surged 85.7%, and automobile exports increased 9.8%.

[Japan]

The Japanese stock market retreated for the first time in 4 days under a double blow

On July 12, the Nikkei Average of the Tokyo stock market fell for the first time in 4 trading days, falling 1,033 points (2% decrease) from the previous day to close at 41,190 points. The US Consumer Price Index (CPI) released on the evening of the 11th Japan time fell short of market expectations, causing the yen exchange rate to skyrocket. At the same time, the decline in US technology stocks also had an impact. As of the previous day, the Nikkei Average, which had reached an all-time high for 3 consecutive days, stopped rising continuously. The appreciation of the yen and the fall in the US stock market had a double impact on the Japanese stock market.

[China]

China's GDP grew 4.7% year on year in the second quarter, falling short of expectations; GDP grew 5.0% year on year in the first half of the year.

The Bureau of Statistics said that short-term fluctuations will not change the long-term positive trend. The contribution rate of total capital formation to economic growth increased in the second quarter, and the contribution rate of final consumption expenditure declined. The “Report on the Work of the Government” sets China's economic growth target of around 5% this year.

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

· In the first half of the year, the value added of large-scale industries increased by 6% year-on-year, in line with market expectations. The year-on-year increase in June was 5.3%, higher than market expectations of a 5% increase.

· Total retail sales of consumer goods in the first half of the year were 23.6 trillion yuan, up 3.7% year-on-year, and 4% higher than expected. The year-on-year increase in June was 2%, falling short of market expectations of 3.4%.

· In the first half of the year, the average unemployment rate in the national urban survey was 5.1%, down 0.1 percentage points from quarter to quarter and 0.2 percentage points from year to year.

[Pan-Southeast Asia]

IMF: By increasing factory employment, India can increase economic growth by 0.5 percentage points

· According to International Monetary Fund research, India's economic growth rate could increase by as much as 0.5 percentage points if more agricultural workers were transferred to manufacturing.

· Researchers said in an IMF work report this week that the estimate is based on the assumption that 5% of agricultural workers can be absorbed into the manufacturing industry. To achieve this goal, the Indian government needs to carry out a number of economic reforms to increase employment opportunities in the manufacturing industry.

[Asia Pacific]

TSMC's (2330.TT) sales growth exceeded expectations thanks to AI infrastructure requirements

· As the exclusive supplier of the most advanced chips from Huida and Apple, TSMC's revenue in June was NT$207.9 billion. This meant that second-quarter revenue grew 40% to NT$673.5 billion, higher than the average forecast increase of 35.5%.

· The market value of the world's largest chip generator recently reached 1 trillion US dollars, thanks to a wave of investment in AI-related data centers and equipment. Companies around the world are competing to buy hardware such as Huida chips to build infrastructure that supports AI. Wall Street brokerage raised TSMC's target price as a result, saying that the chipmaker may charge customers higher fees in 2025 to further boost profits.

South Korea's Samsung Electronics (005930.KP) won an order from Japan's Preferred Networks to manufacture artificial intelligence chips using a 2 nm process and advanced chip packaging. Furthermore, the Samsung union said it is planning an indefinite strike.

South Korea's Samsung Electronics (005930.KP) launched the folding screen phones Galaxy Z Fold 6 and Galaxy Z Flip 6 at the global new product launch. The Fold 6 starts at $1,899, and the Flip 6 starts at $1,099. In addition, Samsung has launched a project to reduce the cost of Micro LED TVs, with the goal of reducing production costs to 1/10 of the current level within the next 2-3 years.

According to the news, TSMC (2330.TT) will begin trial production of 2nm chips next week, which is expected to be the first to be used in the Apple iPhone 17 series.

[Japan]

Major Japanese semiconductor manufacturers, including Sony Group (6758 JT) and Mitsubishi Electric (6503 JT), plan to make capital investments of approximately 5 trillion yen (31 billion US dollars) by 2029 to increase the production of power modules and photosensitive components.

Japan's Resonac Holdings (4004 JT) announced the establishment of a corporate alliance composed of 10 Japanese and US companies to work together on post-process development and evaluation of semiconductors assembled into final products. Semiconductor material manufacturers and others will gather together with the goal of developing post-process technology and cooperating with US tech giants. The alliance aims to gather information and accelerate development by setting up a development and evaluation base in Silicon Valley.

The Japanese electronic component manufacturer plans to increase capital expenditure by 5.4% this fiscal year. According to the investment plans of 32 companies, including Murata (6981 JT), TDK (6762 JT), and Kyocera (6971 JT), compiled by “Nikkei Shimbun,” the total capital expenditure for the 2024 fiscal year is expected to reach 1.4 trillion yen (8.7 billion US dollars), an increase of 46% over four years ago.

Honda Motor (7267 JT) plans to merge its two Thai car plants by 2025, and annual automobile production capacity in Thailand will be reduced by more than half from 0.27 million vehicles.

Toyota (7203 JT), along with seven other automakers, is investing in the electric vehicle charging network IONNA to support the construction of a high-power electric vehicle charging network in North America.

Express Sales Company (9983.JT) raised forecast and plans to increase dividends

In the past nine months, Express Sales Group's total revenue was 2.3665 trillion yen, up 10.4%, operating profit increased 21.5% to 401.8 billion yen, and profit attributable to owners of the parent company increased by 31.2% to 312.8 billion yen. The company said that the strong performance of Uniqlo's North America, Europe, Southeast Asia region and Uniqlo's Japan business in the third quarter helped drive record comprehensive results. The company expects record results for FY24 and plans to increase its annual dividend by 110 yen.

[China]

The next-generation Xiaomi (1810.HK) smart phone factory in Changping, Beijing, with an investment of 2.4 billion yuan, was officially opened. It has a construction area of 8,100 square meters and is expected to produce 10 million smartphones per year. The Xiaomi MIX Fold 4/Filp folding screen phone, which will be released this month, will be manufactured at this factory.

Kuaishou (1024.HK) announced a HK$6 billion automatic repurchase plan. The plan will take effect on August 8 this year and be completed until May 30 next year.

People familiar with the matter revealed that the Shenji NX9031 smart driving chip developed by NIO Auto (9866.HK) has been released and is currently being tested. It will be first installed on NIO's flagship sedan ET9 in the first quarter of 2025.

He Xiaopeng, chairman of Xiaopeng Motors (9868.HK), responded to the new model: the product is named P7+ and is over 5 meters in size.

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