Technology

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Renesas has been a star performer for Sean Maher (+80% YTD) and he now adds Rohm to his basket of stocks - trades on a sub 14x PER and is targeting sales of 600bn JPY at an operating margin of 20% and an ROE of 6% by FY25. As well as being a play on power efficient materials like SiC, Rohm’s ultra-high-speed Control IC technology maximizes the performance of gallium nitride (GaN), which offers higher breakdown strength, faster switching speed, and higher thermal conductivity - power devices based on GaN significantly outperform silicon-based devices. GaN high-speed switching devices will become more important as AI capex explodes and energy / compute efficiency is a priority.

Consumer Discretionary

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Sean Maher adds Geely to his autonomous driving thematic basket which also includes Denso, Renesas and General Motors. Sean notes that Geely is planning a 2024 commercial Level 4 self-driving launch (much sooner than consensus expectations). He is seeking more China exposure this year - the country is starting to lead in automated deployment and local stocks have derated dramatically despite world class IP. On the big question re. whether Level 4+ autonomy needs Lidar - Sean would continue to bet on ‘belt and braces’ hardware redundancy winning and the Chinese crashing the cost of Lidar sensors as they scale up.