GOAL Outlook for 2021: Rotation inoculation — remain pro-risk

We are pro-risk for 2021 and expect the pro-cyclical rotation across and within assets to continue, supported by a strong economic recovery from the COVID-19 shock. With a favourable growth/inflation mix and still elevated equity risk premia we are OW equities and UW bonds. 

20 Nov 2020 | 5:46pm GMT | Research | Portfolio Strategy - Christian Mueller-Glissmann and others

Also read: US Weekly Kickstart: Investor response to our 2021 US Equity Outlook (20 Nov 2020)


 Research Unplugged: GOAL Outlook 2021 - Rotation Inoculation

with Christian Mueller-Glissman, Peter Oppenheimer, Kamakshya Trivedi, Praveen Korapaty, Damien Courvalin, Amanda Lynam and Chris Hussey.

0:00 / 58:12
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 Research Unplugged: GS Commodity Outlook 2021

with Jeff Currie, Damien Courvalin, Samantha Dart, Nicholas Snowdon, Mikhail Sprogis & Chris Hussey.

0:00 / 58:44
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 Research Unplugged: 2021 Global Credit Strategy Outlook

with Lotfi Karoui, Amanda Lynam, Frank Jarman and Chris Hussey.

0:00 / 45:51
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Kinsus (3189.TW): A beneficiary of both ABF and BT substrate growth; Initiate at Buy

We expect the global ABF substrate market to deliver solid growth in coming years (17% 2020-24E CAGR vs -7% for 2012-17) supported by rising consumption with increasing requirement for stronger computing/communication power in the transition to 5G and IoT. Kinsus stands out with its aggressive ABF capacity expansion, which should lead to revenue market share increase given the ongoing industry supply tightness. Initiate at Buy with a 12-month TP of NT$135, offering c.80% upside.

GCE (2368.TW): Solid cloud skill set the key differentiator; initiate at Buy with TP of NT$65

We are upbeat on the growth outlook for the global cloud (server + switch) PCB market (13.5% 2020-25E revenue CAGR vs. 5-6% in 2015-2019), supported by structural trends in AI/HPC/Big Data development and higher design complexity with rising PCB layer counts. In view of its solid industry position, GCE appears well-positioned to benefit from the positive industry growth outlook. Initiate at Buy with our 12-month target price of NT$65 offering 36% upside.

Lotes (3533.TW): Accelerating CPU socket upgrades to drive earnings; Initiate at Buy

We expect the CPU upgrade trend to accelerate global CPU socket market growth over the coming years (20.5% CAGR in 2020-23E to US$900mn vs. -1.3% CAGR in 2012-19), with Taiwan-based Lotes a key beneficiary as the second-largest socket manufacturer globally (33% share in 2020E). We initiate coverage with a Buy rating and 12m target price of NT$600 based on 15.4x 2021E PE (11.7x 2022E PE), implying 40% upside.

23 Nov 2020 | Research | Equity - James Wang and others