(Bloomberg) — SK Hynix Inc. will face high expectations when it reports this week after strong earnings from companies like Micron Technology Inc. cemented optimism about demand for artificial intelligence chips.
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Micron’s surprisingly strong sales forecast last month sparked optimism about SK Hynix’s earnings prospects, Bloomberg Intelligence said. However, there are signs that some of the fanfare surrounding AI stocks may be fading after Taiwan Semiconductor Manufacturing Co. downgraded its outlook for chip market expansion.
Luxshare Precision Industry Co., which gets about three-quarters of its revenue from Apple Inc., will be closely watched after iPhone sales fell 9.6% in the first quarter. While full-year revenue growth is expected to have slowed to 10%, from 39% the year before, BI said market share gains for iPhone-related orders could bring a positive surprise.
Japan’s largest investment bank, Nomura Holdings Inc., likely returned to profit growth in the year through March after three years of falling profits, supported by a stock market rally in Japan. The Indian company HDFC Bank Ltd. missed its fourth-quarter profit estimates due to a provision aimed at building a countercyclical cushion and improving its balance sheet. Nevertheless, sequential margin expansion and improvement in other profitability indicators were seen as positive for the sector.
Highlights to watch out for:
Monday: Reliance Industries (RELIANCE IN) is expected to post quarterly profit growth of 2.2%, as weakness in its oil-to-chemicals business partly offsets better performance in its telecom and retail businesses. The conglomerate is in talks with Tesla Inc. about building a manufacturing plant in India, according to a Hindu BusinessLine report.
Tuesday: Nidec (6594 JP) could meet its full-year sales and operating profit forecasts, helped by sales of industrial machines and robots. The Japanese auto components maker’s share price should be supported by a more stable earnings outlook, Jefferies analysts said. Demand for electronic auto parts in Japan may remain sluggish following Daihatsu emissions certification scandals.
Wednesday: Luxshare Precision’s (002475 CH) adjusted annual profit is estimated to rise 21%, boosted by order gains in the iPhone supply chain. The company’s deal to take control of an iPhone assembly site run by rival Pegatron, announced in December, will help it speed up assembly of the iPhone Pro and Pro Max models, Morningstar said in a note last month.
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Prada (1913 HK) first-quarter revenue is expected to increase 9.7%, driven by the Japan and Asia-Pacific regions. The weak yen likely boosted local demand and tourism spending in Japan, BI said. The Miu Miu brand is expected to continue to do well thanks to its popularity among young Chinese consumers, Jefferies added.
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Hindustan Unilever’s (HUVR IN) fourth-quarter revenue is expected to grow around 2.9%, according to consensus, although rural demand has been uneven and urban consumers are becoming pickier with the arrival new players on the market. India’s forecast of an above-normal monsoon should bode well for demand this financial year. The company is also considering spinning off its ice cream business, according to the Economic Times.
Thursday: SK Hynix’s (000660 KS) operating profit will likely beat consensus thanks to its dominant market share in high-bandwidth memory chips, BI said. The company stands to benefit as enterprise customers increasingly move data storage from hard drives to solid-state drives for AI training purposes, Citi said.
Friday: Nomura Holdings (8604 JP) full-year net profit expected to jump 80%, consensus estimates show, buoyed by optimism over Japanese stocks after Bank of Japan cuts rate of negative interest. Japanese financial institutions are expected to perform strongly in the domestic retail and wholesale sectors amid favorable sentiment, Citi analysts said. Nomura is expected to be the next Japanese lender to issue additional dollar-denominated Tier 1 bonds to diversify sources of capital, BI said.
(Updates throughout)
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