Thematic Reading - April 26, 2022
The latest thematic tailwinds and headwinds in the news
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Thanks for being a subscriber to Thematic Signals+. Here are some of the things we’ve been reading lately pertaining to our investment themes as well as related indices and models. Enjoy!
-Team Tematica
Digital Infrastructure & Connectivity
The buildout and upgrading of our Networks, Data Storage Facilities, and Equipment:
“Worldwide end-user spending on public cloud services will grow 20.4% to $494.7 billion, up from $410.9 billion in 2021, according to the latest numbers from Gartner research. Gartner expects end-user spending to approach $600 billion in 2023.”
Public cloud spending to hit almost $500B this year
“The arrival of 5G gives our customers some of the fastest mobile data speeds in the UK, and a mobile network they can rely on. It will open up all sorts of possibilities for our consumer customers, as well as local businesses and their employees, supporting the local economy and helping to deliver a greener, more prosperous, and digitally connected region.”
Vodafone boosts 5G infrastructure in the UK
“Broadcom has further solidified its early-mover status with its announcement of the sample availability of a complete end-to-end chipset offering for the Wi-Fi 7 ecosystem. Spanning routers, residential gateways, enterprise access points, and client devices, the new Wi-Fi 7 chips more than double the speed of Wi-Fi 6 and 6E solutions on the market today, the company said.”
According to Broadcom, you can’t put the Wi-Fi cart before the Wi-Fi horse
“Self-driving start-up Pony.ai announced Sunday it received a taxi license, the first of its kind in China. The license allows Pony.ai to operate 100 self-driving cars as traditional taxis in the Nansha district of the southern city of Guangzhou, the company said. The Chinese start-up, which is backed by Toyota, received approval from Beijing city late last year to charge fees to operate a commercial robotaxi business in a suburban district of the city.”
Start-up Pony.ai says it’s the first self-driving company to get a taxi license in China
Audiences’ share of time streaming hits new high in March
Luxury Buying Boom
Tapping into aspirational buying and affluent buyers amid rising global wealth:
“…demand for luxury goods in the U.S.—another crucial market for LVMH, accounting for about 25% of annual sales—appears to be defying inflation. That strong demand comes even as the U.S. consumer price index rose in March at the fastest annual pace since the start of the 1980s. In 2022’s first quarter, LVMH’s U.S. sales increased 26% from the same period the year before. Chiara Battistini, an analyst at J.P. Morgan, has rated the stock Overweight, with a price target of €780 by December 2023. “LVMH has proved consistently over the years to be an outperformer in bad and in good times,” she wrote in an April note.”Inflation Isn’t Stopping U.S. Consumers From Buying Luxury Goods. LVMH Stock Could Rise Again.
“Globally, online channels ballooned to an estimated €62 billion in market value in 2021, up 27 percent from the year prior. In China, digital sales of personal luxury goods outpaced physical sales across all categories, increasing almost 56 percent, according to Bain & Co. Although pandemic-induced store closures in the world’s second-largest economy are only temporary, they nevertheless point to the advantages of e-commerce in times of uncertainty.”
Will Farfetch Take the Lead in Online Luxury E-commerce?
“FARFETCH Limited, the leading global platform for the luxury fashion industry, today announced the launch of Beauty across FARFETCH companies, Browns, Farfetch.com, and Off-White™. This follows the acquisition of luxury beauty retailer, Violet Grey earlier this year which brings industry expertise as well as a curated selection to be offered on Farfetch.com, and expands the beauty curator’s reach to extend to FARFETCH’s global customer base.”
FARFETCH Unveils Beauty Portfolio
“LVMH Moët Hennessy Louis Vuitton, the world’s leading high-quality products group, recorded revenue of 18 billion euros in the first quarter of 2022, up 29% compared to the same period in 2021. Organic revenue growth was 23%. LVMH had a good start to the year against a backdrop of continued disruption from the health crisis and the dramatic events in Ukraine. All business groups achieved double-digit revenue growth, except for Wines & Spirits, which continued to see supply constraints. The United States and Europe also achieved double-digit revenue growth; Asia continued to grow over the quarter despite the impact of a tightening of health restrictions in China in March.”
Good start to the year for LVMH
“With prices starting around $275,000, the coupe and convertible are the latest in the brand's line of V8-powered mid-engine cars that stretches back to Magnum P.I.'s 308. Coming off a record year with over 11,000 cars delivered in 2021, reservations for Ferrari's entire lineup are filled through 2023.”
Ferrari's 'last' V8 supercar is apparently sold out
“Sales at Birkin bag maker Hermes (HRMS.PA) beat estimates in the first quarter, lifted by strong appetite for its luxury accessories, particularly in the United States and Europe, as the sector powers through turbulence from the war in Ukraine and COVID lockdowns in China… All divisions clocked double-digit growth, including the leather goods and saddlery activity known for its Birkin and Kelly handbags, which account for nearly half of annual sales and reported 15.8% sales growth. Other divisions grew even more, with the ready-to-wear and accessories division up 44% and sales of watches up 62%.
Hermes upbeat on China as strong U.S., European demand buoys sales