Leroy Groffier
@LeroyGroffier
the action is the juice
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MLCCs won't repeat 2017-18 cyclical correction: MS key insight is that incremental demand is coming from the high end of the market, where 2-3 players dominate and new players cannot easily enter due to demanding specs. Hence the "early cycle" take.
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MLCCs 6981 6976 009150: MS going hard on the specks of clay this week. 40 pg report, upgrading Taiyo Yuden 6976 to hold, top picks Murata 6981 and SEMCO 009150. Key theme: MLCCs are still "early cycle" in late 2026.
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DEMPA 6779: seeing some flow & analyst love on solid Q2 earnings and last week's Nomura initiation rpt. Yes, it was a late stage hype name in May/June, but the upside from optical transceivers is real and multiple is not demanding.
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MLCCs: MS raising 2026-28 industry revenue estimates by high single digits. Acceleration continues, according to METI and MoF stats released this week. Shipment value now +26%/20%/16% for 2026/27/28. Big numbers for an industry that contracted post-Covid.
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MLCCs: one thing that *everyone* seems to agree on--the AI bottleneck trade is stale and played out. Nonetheless, lots of supportive color and analysis emerging from passives space over the last week and related stocks finding support in weak overall tape. Watch these divergences
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META: not my favorite name, but getting a lot of airtime this week. GS piece over weekend discusses distribution aspect and details of containerized user agents, security, etc. META is not an expensive name, one can see some angles here.
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Rookie numbers...gotta get those numbers up, CXMT. or not
KEPCO 9503: analyst previously negative on this name, upgraded on rate hikes 19 Aug, but stock only started moving on 31 Aug following Mizuho's weekend upgrade. Growing conviction that this time, price hikes won't be offset by mkt share loss.
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JAPAN ELECTRICITY RATES: interesting slow burn here suggests more upside for Kyudenko 9508 and KEPCO 9503 in particular. Wheeling rate hikes approved 24 Aug; analysts started revising assumptions upward (Daiwa) late last wk; this week we are seeing upgrades in this sleepy sector
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SEMCO 009150 bullish update from UBS conference. Raising OP ests 15-20% as MLCC guided up and ABF substrate margins expanding in out years. Supply:demand remains tight & more price hikes coming up.
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MURATA 6981 SEMCO 009150: Passives o/p regionally. Sea change today...perhaps the "news" that SA was to blame for July volatility cleansed our collective psychology. At any rate, positive fundamentals persist, e.g., MS with SEMCO "top pick" note last week.
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TAIYO YUDEN 6976: like a letter from a dead relative, the May-June runup (and subsequent collapse) is now explained. Good to know that SA was consistently poor in both trade execution and regulatory compliance.
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NITTO BOSEKI 3110: post Q1 followup w/ mgmt seems to reassure investors.
MS Nowak: SPCX insider selling was <1/3 of the amount expected by traders post lockup expiry. Potential buyers had held off pulling trigger prior to seeing lockup expiry dynamics due to career risk, now this is no longer an issue.
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DAIFUKU 6383: flat reaction probably a buying oppty. Cleanroom orders revised up, logistics and autos slightly weaker but likely temporary.
HK Props, one goddamned thing after another: Chinese tax net readacross to property names. 16, 12, 683, 14
AMEC 688012: we survived earnings, always dicey w/ A -Share names. 38% top line gr (vs. LRCX 30%-->50% in Sep q) stable 40% mgns (vs LRCX 52%). News that Sammy & Hynix (China) were testing AMEC machines conveniently dropped on earnings day. Looks good thematically.
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AI Capex revisions: making the rounds today...MAG7 capex estimate at YE 2025 and revisions post Q1 and Q2
LRCX: Is the pain too raw, can we give it another chance so soon? Lam guided 3Q well above the Street on revenue and margins. Revenue was guided to $8.10 bn at the midpoint, which is well above GS at $7.32 bn and the Street at $7.13 bn. Operating margin was guided to 39.5%, well above GS at 37.0% and the Street at 37.1%. Non-GAAP EPS guidance of $2.00-$2.20 (midpoint of $2.15) was well above GS at $1.85 and the Street at $1.83.
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SAMMY 005930: "clean beat", technology leadership is back, nobody talking about labor disputes anymore. Bouncing off the 200 (for now). Nobody lives forever.
