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June 13, 2024 | News
Investing Expeditions | Technology Innovation Around the World

General William Blair News

 

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Research trips are an integral component of our active, fundamental investment process. Our investment teams meet with different companies, attend conferences, and travel to new markets around the world, gaining insights for our clients and a deeper understanding of potential investments.

Below, we highlight some of the research trips our global equity and emerging markets debt teams have taken. For more insights, visit our interactive research map.

Behind Taiwan’s Technology Demand Drivers

Global Research Analysts Greg Scolaro, CFA, Drew Buckley, CFA, partner, and Jayesh Kannan, CFA, traveled to Hsinchu, Taiwan, meeting with different companies to learn more about key technology demand drivers.

“It’s a new year, and we’ve been trying to understand through our meetings the demand drivers for the various end-markets in the technology sector. This includes servers. This includes the PC and laptop demand recovery, as well as the handphone and smartphone cycle,” says Kannan.

But “the key theme is artificial intelligence (AI),” says Scolaro. “It’s easily come up in every single one of our company meetings so far, and it’s interesting to hear the divergence in views as far as the impact that AI will have on all of these companies.”

On the Ground in Zambia

Dan Wood, a portfolio manager on our emerging markets debt team, traveled to Zambia, where restructuring, mining, and currency appreciation are top of mind for emerging markets debt investors.

Restructuring, he says, is “a very long and drawn-out process, and compromises are needed on all sides. It feels like we’re getting closer, but it remains to [be seen] just how close we are and what the terms of that final agreement might be.”

There’s also excitement around the mining industry. “At the moment, production is very low, but new regulations suggest that production is going to pick up dramatically over the next few years, which is likely to support the Zambian economy,” says Wood.

Lessons From Consumers

Dasha Fomina, a research analyst on our global equity team, attended the Consumer Analyst Group of New York (CAGNY) conference, where she heard from CEOs of global consumer companies across the staples, spirits, and beauty sectors.

She learned that management teams are focusing on growth over margins, as well as the elasticity of demand, while current consumer growth expectations highlight an expanding international opportunity, particularly in India. And like in other sectors, AI has the potential to create tailwinds, such as ad budget efficiency and procurement optimization.

A Macro Lens on Japan

Pictured: A copy of The Japan Times from March 5, 2024.

Various members of our global equity team have traveled to Japan five times since the fall of 2022. On the most recent research trip, team members met with 125 companies across different sectors, gathering macro insights and learning about several reforms that could act as structural tailwinds.

They found that deflation has ended in Japan due to a tightening labor market and a shift in consumer psychology that is more accepting of price increases. In addition, the normalization of monetary policy is expected, but will be slow, while investment into Japan via tax incentives is a key focus. Corporate mindsets are changing as well, shifting from narrow cost cutting to focusing on return on invested capital (ROIC).

“What we are seeing is bottom-up confirmation of a compelling top-down story,” says Portfolio Specialist Kyle Concannon, CFA, CAIA. “We believe Japan presents compelling investment opportunities.”

Key Takeaways

  • AI continues to be a key theme in Taiwan’s technology sector.
  • Production pickup in the mining industry could help support Zambia’s economy.
  • Consumer companies are embracing AI to help with efficiency and optimization.
  • Corporate mindsets in Japan are shifting as the deflationary period ends.

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General William Blair News

 

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