Aletheia Capital, AIA Central, Hong Kong (2026)

30/03/2025

Happy Eid Ul Fitr! May this joyous occasion bring you and your family peace, prosperity, and happiness. Wishing you gratitude, success, and abundance as Ramadan concludes.

#2025

27/03/2025

Global Strategy | Tariffs for Good or Ill - Jonathan Wilmot

Our conclusion is that the correction in the US equity market isn’t over yet and that the next four to six weeks will bring more pain than gain as we work through phase one of the tariff saga. Nor do we think it very likely that European and Chinese stock markets can prosper while the US de-rates, as they did in Q1. The end result for US equities might end up being rather analogous to the “Kennedy Slide” in 1961/62, one of the four bear markets without a recession we have experienced since World War II. Beyond that, it’s a bit too soon to tell…

Read full story here: https://buff.ly/zqutUJu

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26/03/2025

Asianomics | Disruption - Jim Walker

The Federal Open Markets Committee didn’t say it in so many words, but its decision to hold the benchmark interest rate stable last week was based on two factors: concerns about the growth outlook (deteriorating) and concerns about the inflation outlook (deteriorating). Truth be told, had Mr Trump’s fog of uncertainty not arrived on the scene, there would only have been one rate option open to policymakers—an increase. The committee admitted as much itself, consumer price inflation signals are going in the wrong direction. That is true of expectations too. Expectations of price rises aren’t quite at 2008 or Covid pandemic levels, but they are far and away the highest in the last eighteen years, and indicative of too high price pressures, not a smoothly expanding economy.

View full story here: https://buff.ly/EHXoheL

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25/03/2025

China Strategy | China Pulse: Jan-Feb Macro Data Points Part 2 - Vincent Chan

From the end of January, when DeepSeek released its groundbreaking LLM model, MSCI China’s PE multiple has risen by 23% (from 11.5x then to 14.2x now). This level of PE multiple is still in line with the long-term average of the market. Indeed, if we were to compare it to the change in the US market valuation after the release of ChatGPT in early 2023, we would find that the PE multiple of the S&P 500 had risen 49% (from 18.3x in end-2022 to 27.2x in Jan-2025). From this perspective, the re-rating of the China market till now is still reasonable.

Read full story here: https://buff.ly/f9Xi0Yl

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24/03/2025

Tech Thematic Strategy: Keith Woolcock - Time to get RAD

Elon Musk has said that everything that needs electricity will one day soon be endowed with AI. At the end of January, Jensen Huang, nVidia’s CEO said, “Everything that moves will be robotic someday, and it will be soon. And every car is going to be robotic. Humanoid robots, the technology necessary to make it possible, is just around the corner.” This week, at nVidia’s developers’ conference, he explained that just as reinforcement learning is the big breakthrough that has allowed the likes of Google, OpenAI and DeepSearch to successfully develop reasoning models, it will catalyse the development of humanoid robots capable of operating in the real world. “There’s only so much data and so much human demonstration we can perform,” Huang said on Tuesday. “This is the big breakthrough in the last couple of years: reinforcement learning.”

Read full story here: https://buff.ly/iUmnXmO

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14/03/2025

Tech Thematic Strategy: Keith Woolcock - War Games

Even though defence stocks around the world have generally performed strongly over the last year, they are likely to continue doing well because we are probably at a turning point in world affairs. The concern must be that the damage being done by Donald Trump to the US’s standing in the world will be long lasting. The world therefore is likely to continue becoming unstable. If the authors of the Foreign Affairs article I have quoted from are correct, America has become a type of authoritarian democracy, one result of which is to force other countries to become more self-reliant. The last twenty or so years are likely to represent a low point in terms of defence expenditure as a proportion of global GDP.

Read full story here: https://buff.ly/XPctznA

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12/03/2025

Technology Hardware: Skye Chen - Co-Packaged Optics: Wait for another day (or years)

The Co-Packaged Optics (CPO) technology enables the integration of both photonic IC (PIC) and electronic IC (EIC), and packages them in a modular form factor along with switches or xPU (including ASIC) via substrate or interposer. In traditional systems, electronic signals are converted to optical signals using several separate components, which can lead to signal loss on PCB and increased power consumption. CPO, on the other hand, places the optical engines closer to the switch ASIC or xPU, reducing the distance that signals need to travel, and improving the overall performance.

We believe Broadcom, nVidia, and Cisco are developing their own CPO solutions for their respective switch ASICs. In addition, nVidia, AMD, and Amazon are developing CPOs for their xPU connectivity (Optical I/O). We expect more hyperscalers, such as Google, to integrate CPO technology into their TPU ASIC in the future. However, initially, we believe nVidia and Broadcom to be the two major suppliers expected to commercialize their CPO products during 2025-2027, with nVidia likely to see the major upside in demand volume for its Quantum and Spectrum switches. Even though Broadcom had launched its first switch CPO solution in 2022, followed by a second iteration in 2023, it may trail in volume and market share as nVidia dominates the AI GPU market, and because of the slow pace of CPO adoption in data center networking.

Read full story here: https://buff.ly/NuZzIAy

For more information on our product, and other Aletheia Capital research, please contact [email protected]

10/03/2025

Tech Thematic Strategy: Keith Woolcock - The Whitehouse on Doge Position

The key to technological dominance lies not just in inventing and developing technology, but in how quickly it is adopted across the economy. I have argued in the past that when people look at Silicon Valley’s dominance of tech, they always focus on the availability of capital and engineers in the Valley. However, the third leg of the Valley’s and America’s dominance of tech is down to the fact that US companies have always been the first adopters of each new wave of technological innovation.

Chinese companies—too many of which are state-owned—have a poor record of adopting new technologies. To that end, if you look at China’s tech sector, it is dominated by consumer-facing companies such as ByteDance, Alibaba and Tencent. Large language models, such as DeepSeek’s R1 have not yet changed this. However, now that President Xi has woken up to the potential of large language models, that might change. It’s too early to know, but with America looking like it might be broken as an investment theme, I think investors will be willing to give China the benefit of the doubt.

Read full story here: https://buff.ly/mP2t9eu

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10/03/2025

Meet the best Tech Hardware research team!

If you are in San Jose for the nVidia GTC (18th-21st March), come meet Warren Lau and Skye Chen.

Please reach out to schedule a meeting.

07/03/2025

Meet the best Tech Hardware research team!

If you are in Taiwan from March 17th to 21st, come meet Skye Chen*, George Chang, Angus Lin, and Steven Liu to discuss their latest views and insights.

Please reach out to schedule a meeting.

(Skye will only be available from March 17th -19th)

07/03/2025

Dr Jim Walker, Aletheia’s Chief Economist, outlined major challenges faced by the global economy in 2025. His recent CONNECT call highlighted these critical issues:

• Donald Trump has taken the reins of office at a momentous point in US history – he will be called upon to address the runaway fiscal deficit. But is he up to the job?
• Europe’s growth problems are set to intensify with Trump tariffs and rising energy and defence costs.
• China's economic outlook is more positive, with the government actively working to stabilize the economy and address previous issues.
• The gloom descending on India is overdone

The recorded call is now available for replay.

Replay Link: https://buff.ly/wzaW0dK

26/02/2025

Tech Thematic Strategy: Keith Woolcock - The Song Remains The Same

By contrast, Unitree has, like DeepSeek, chosen to go international. The company, which was last year valued at just over $800m in a funding round, gets about 60% of its sales from overseas markets. In the US, it has turned heads by producing four-legged robots that are comparable to those from Boston Dynamics, which is viewed as a technology leader. Whereas Boston Dynamics’ entry-level four-legged robot, called Spot, is priced at $74,000, Unitree’s Go2 entry-level four-legged robot is priced at just $1,600. As China has proven with BYD’s dominance of electric vehicles, TikTok’s success in social networking, and now DeepSeek’s breakthrough with a cheap large language model, Chinese robot makers such as Unitree are likely to give western companies a run for their money.

Read full story here: https://buff.ly/3F44ItD

For more information on our product, and other Aletheia Capital research, please contact [email protected]

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