The absence of Pokemon Go in China is not deterring some analysts from speculating on which local companies stand to benefit from the hit mobile game and the augmented-reality (AR) experience it has helped make popular.
The base case for Chinese investors is perhaps Hong Kong-listed Lenovo Group Ltd (聯想). On July 18, the computer maker’s shares rose the most in more than three months on what analysts said was improving sentiment from Pokemon Go. Lenovo even plans to release a similar game, China’s Jiemian news Web site reported the next day.
The game became available for download in Hong Kong yesterday and analysts have suggested a few companies they expect to be buoyed by the frenzy.
Photo: Bloomberg
Ningbo GQY Video and Telecom Joint Stock Co Ltd (寧波GQY視訊), which builds wall-sized display systems, is recommended by China International Capital Corp (CICC, 中金公司), Orient Securities Ltd (東方證券) and Zheshang Securities Co Ltd (浙商證券). GQY’s shares are up 36 percent since Pokemon Go was introduced on July 6. The stock was halted on July 15 after rising by the daily limit for four consecutive days, with trading resuming on July 21. GQY bought a stake of about 3.6 percent in Meta, an augmented-reality start-up, for US$10 million in February, which is a big investment for a company that recorded a 4.9 million yuan (US$734,005) profit last year.
Meisheng Cultural and Creative Corp Ltd (美盛文化), a maker of anime costumes, is also recommended by CICC, Orient Securities and Zheshang Securities. Meisheng’s stock is up 7.5 percent since the game was released. It paid 20 million yuan for a 35 percent stake in an augmented-reality mobile game developer in November last year. Meisheng’s profit last year was 126.4 million yuan.
Beijing Toread Outdoor Products Co Ltd (探路者集團), a maker of camping equipment, is also among stocks “closely related with AR technology,” CICC’s Wei Meng and Pei Yin said. Toread is an investor in a company that makes exercise bikes that use virtual reality technology.
Other CICC picks include Lingnan Landscape Co Ltd (嶺南園林) and Palm Eco-Town Development Co Ltd (棕櫚生態城鎮發展), an urban construction and engineering company. Huawen Media Investment Corp (華聞傳媒投資集團) and Xiamen Anne Corp Ltd (廈門安妮), an internet marketer, are also among possible beneficiaries, CICC said.
Some investors might already be trading the theme in China. Since the game’s release, 13 of the 16 stocks recommended by CICC climbed an average 9 percent through Friday last week, while the Shanghai Shenzhen CSI 300 Index rose 0.6 percent.
Those gains might not last, ICBC International Holdings Ltd (工銀國際) analyst Yu Jianpeng (于健鵬) said in a telephone interview.
“Augmented reality cannot guarantee success,” Yu said. “It could be risky if their products or services were not well received after large investment.”
Pokemon Go was released in Japan on Friday last week and Nintendo Co Ltd shares rose again. Later that day, Nintendo said the financial impact from the game would be limited. The stock yesterday fell 17 percent in Tokyo as of 12:27pm in Hong Kong.
Jensen Huang (黃仁勳), founder and CEO of US-based artificial intelligence chip designer Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) on Friday celebrated the first Nvidia Blackwell wafer produced on US soil. Huang visited TSMC’s advanced wafer fab in the US state of Arizona and joined the Taiwanese chipmaker’s executives to witness the efforts to “build the infrastructure that powers the world’s AI factories, right here in America,” Nvidia said in a statement. At the event, Huang joined Y.L. Wang (王英郎), vice president of operations at TSMC, in signing their names on the Blackwell wafer to
AI BOOST: Although Taiwan’s reliance on Chinese rare earth elements is limited, it could face indirect impacts from supply issues and price volatility, an economist said DBS Bank Ltd (星展銀行) has sharply raised its forecast for Taiwan’s economic growth this year to 5.6 percent, citing stronger-than-expected exports and investment linked to artificial intelligence (AI), as it said that the current momentum could peak soon. The acceleration of the global AI race has fueled a surge in Taiwan’s AI-related capital spending and exports of information and communications technology (ICT) products, which have been key drivers of growth this year. “We have revised our GDP forecast for Taiwan upward to 5.6 percent from 4 percent, an upgrade that mainly reflects stronger-than-expected AI-related exports and investment in the third
RARE EARTHS: The call between the US Treasury Secretary and his Chinese counterpart came as Washington sought to rally G7 partners in response to China’s export controls China and the US on Saturday agreed to conduct another round of trade negotiations in the coming week, as the world’s two biggest economies seek to avoid another damaging tit-for-tat tariff battle. Beijing last week announced sweeping controls on the critical rare earths industry, prompting US President Donald Trump to threaten 100 percent tariffs on imports from China in retaliation. Trump had also threatened to cancel his expected meeting with Chinese President Xi Jinping (習近平) in South Korea later this month on the sidelines of the APEC summit. In the latest indication of efforts to resolve their dispute, Chinese state media reported that
CHINESE EXPORT CURBS: A dispute between China and the Netherlands could halt chip supply, affecting vehicle production, US and European auto associations said Groups representing major automakers late on Thursday warned that a chip disruption stemming from a dispute between China and the Dutch government could quickly affect US auto production. Automakers and their suppliers received notice from chipmaker Nexperia (安世半導體) last week that it could no longer guarantee delivery of its chips, the European Automobile Manufacturers Association said, adding that manufacturing could be significantly disrupted. In the US, the Alliance for Automotive Innovation, which represents General Motors, Toyota, Ford, Volkswagen, Hyundai and nearly all other major automakers, urged a quick resolution. “If the shipment of automotive chips doesn’t resume — quickly — it’s going to
RSS