Nokia (NOKIA FH) Finland
Technology
NOKIA is undergoing a major transformation under new CEO Justin Hotard, who brings a Silicon Valley mindset to this legacy European company. The recent Infinera acquisition signals a strategic pivot from legacy RAN to high-growth hyperscale data centre infrastructure. The RAN business appears to have bottomed after a multi-year downturn, with pricing power set to improve amid the first hardware upcycle in a decade and increasing replacement of Huawei equipment in Western markets. NOKIA also benefits from stable IP licensing cash flows, expansion into new areas (Amazon streaming) and renewed momentum in networking. Despite a strong balance sheet, ~3.5% dividend yield and a clear path to margin expansion, the shares trade at just ~12x FY26 EPS. With potential EPS power of $0.70, the stock could “easily” double with minimal downside.
Edition: 216
- 25 July, 2025
China’s recent high-profile meeting with private entrepreneurs signalled Beijing’s strategic priorities, highlighting firms advancing state goals while sidelining others. Key invitees included Alibaba, Tencent and Huawei, while Baidu, ByteDance and JD.com were absent. This distinction suggests Beijing’s support for companies driving innovation in AI, advanced manufacturing and strategic industries like EVs and semiconductors. Xi Jinping reinforced the Party’s control, urging businesses to serve national interests and promote "Common Prosperity". Firms like DeepSeek, Alibaba and BYD align with these objectives. Conversely, Baidu and other omitted firms may face tolerance but lack government backing.
Edition: 206
- 07 March, 2025
Balkanisation of the Internet has begun
Technology
Huawei’s migration of its smartphone business to its home-grown Harmony OS is the first concrete sign that Richard Windsor’s long-predicted splitting of the Internet into two pieces has begun and everyone, not just China, will be poorer because of it. Richard thinks that every technology standard created from here on will have a Chinese version and a Western one which are developed independently and are incompatible. This is why he has been forecasting that the long-term growth of the technology industry will be lower. Huawei is the first to go down this route, but he has no doubt that there will be many others over the next few years.
Edition: 200
- 29 November, 2024
Nvidia's H20 remains the top choice for Chinese CSPs
Technology
Based on Westlake’s conversations with industry experts, Chinese CSPs remain major customers for the H20 despite Chinese regulators’ guidelines. With speculation the DoC BIS will propose even stricter restrictions on advanced GPU exports to China at its annual review in Q4, Chinese CSPs and leading server ODMs / OEMs are stockpiling H20s in case of potential bans. Contacts estimate the H20 shipment units in China to be ~50k in Q2, ~350k in Q3 and ~400k in Q4, for a total ~800k units in '24. NVDA could potentially see H20 revenue reach $9bn-$9.8bn in 2H24. Chinese CSPs currently rely on NVDA’s GPUs including H20 for training, while deploying a variety of GPUs, e.g. Huawei’s 910B, for inference. Huawei’s Ascend 910B/910C shipments are estimated to grow from 100k-200k in ’23 to 350k-400k in ’24 and 650k-700k in ’25.
Edition: 196
- 04 October, 2024
A ban on TikTok will have a profound impact on Chinese Internet companies
Blue Lotus believes the optimum strategy of the Chinese government is to facilitate the shutdown of TikTok in the US, make a global mega-app only available on Huawei phones and spur a global “guerrilla war” against US ideology. This leads them to believe that: 1) Alibaba (recently upgraded to Buy) will benefit from TikTok’s US shutdown by gaining momentum in its international ecommerce business; 2) Tencent will benefit from levelling the playfield against TikTok in user and usage bases for AI / LLM applications globally; 3) PDD and Shein might benefit in the short run but less so in the long run, due to their own compliance deficiencies in tax adherence and privacy protection.
Edition: 182
- 22 March, 2024
Consumer Discretionary
Amid the world’s transition to clean energy vehicles, BYD’s middle-of-the-road positioning, strong engineering background in both ICE and battery technology, and long brand track record will allow it to assume the role of Volkswagen or Toyota in the EV era. The US-led protectionism and the rise of Huawei-affiliated EV brands will uniquely help BYD to compete at home with the best and transfer the learnings outwards as a trusted bridge to the world. Both BYD and BYD Electronic International trade near their historical lows in terms of PE band. Blue Lotus initiates coverage with a Buy rating and a TP of HK$350 (65% upside).
Edition: 177
- 12 January, 2024
Semis & Hardware: Real-Time Views
Technology
Arete’s monthly newsletter covers the latest updates in the global tech hardware and semis markets, with a particular emphasis on foundry, memory, compute, semi-cap, wireless semis, and EV/autos. Highlights from their Nov edition include: 1) Dramatic shift in memory - Q4 price surge signals shift from a buyers’ to a sellers’ market. 2) HBM market dynamics - is AMD diversifying its HBM supplier base with new SK Hynix deal? 3) Why Huawei looks set for a bumper 2024 and US sanctions backfire. 4) Why Apple’s spend at TSMC might be flat in 2024, curbing TSMC recovery. 5) Auto semis - content is king in 2024. 6) Lithium-ion battery outlook - all-time-high earnings amid all-time-low valuations. 7) To infinity and beyond - satellite semis growth in the 2020s.
Edition: 174
- 24 November, 2023
Technology
Huawei appears to have adapted its internal 5G modem to a novel 7nm process, one which eliminates the need for the industry-standard usage of FinFET transistors. KC Rajkumar finds it remarkable that SMIC may have been able to control the leakage profile of planar transistors just enough to make it possible for the Mate 60’s 5G modem to operate without obvious issues. The SMIC / Huawei 5G handset demonstrates that the expensive FinFET process may be unnecessary. A few years out, if mid-tier foundries were to duplicate the SMIC planar process, there could be risk to 7nm loading at TSMC.
Edition: 169
- 15 September, 2023