autonomous vehicles - poems vehicles ... rio tinto’s “ mine of the future”, ... • driverless...
TRANSCRIPT
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Topics
Autonomous Vehicles
CSI 300 Index
21 march 16, 8.15am/11.15am Morning Call/Webinar
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2016. All Rights Reserved. For internal circulation only.
Disclaimer
The information contained in this presentation has been obtained from public sources which Phillip Securities Pte Ltd (“PSPL”) has no reason to
believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in this
presentation are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or
warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any
such information or Research contained in this presentation is subject to change, and PSPL shall not have any responsibility to maintain the
information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be
liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made
available, even if it has been advised of the possibility of such damages.
This presentation is intended for general circulation only and does not take into account the specific investment objectives, financial situation or
particular needs of any particular person.
You should seek advice from a financial adviser regarding the suitability of the investment product, taking into account your specific investment
objectives, financial situation or particular needs, before making a commitment to invest in such products.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2016. All Rights Reserved. For internal circulation only.
Autonomous Vehicles
Ho Kang Wei
Phillip Securities Research Pte Ltd
21st March 2016
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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4
Autonomous Driving
Aka Driverless Cars
Vehicles with the ability to pilot themselves
As of 2013, 4 US states have passed laws permitting autonomous cars
Likely to be the next disruptive technology
Many companies are projecting to push out their first driverless car for purchase in 2020
Mercedes’ F015 Luxury in Motion
Source: Mercesdes-benz
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5
How it works?
Hardware Components
• Sensors
• Radars, cameras, lidars, GPS
• Processors
• On-board processors needed
to handle constant stream of
info without lag
• Internet Connectivity
• Wireless routers, V2X
communicators
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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6
How it works?
Software Components
• Operating System
• Driving is extremely complex, OS must be able to adapt to change in a blink
of an eye
• Companies are still striving to perfect their OSes
• Other Software
• High Definition embedded maps
• User Interfaces (Cars as the ultimate mobile device)
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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7
Features already available
• Parking assistance – using cameras and sensors to drive the vehicle into the
parking space has been available since 2006 outside Japan, which had the
technology in a primitive form since 1999.
• Adaptive cruise control – using radar or lidar to allow the vehicle to adjust its
speed with respect to traffic has been available in Japan since 1997
• Automatic Emergency Brake – Mercedes-Benz first premiered the technology
to the world in 1996.
Other Sectors with autonomous vehicles
• Trucking – Daimler and Volvo have started testing autonomous trucks on
roads in USA
• Mining – Rio Tinto’s “ Mine of the Future”, with a fleet of 69 autonomous trucks
hauling iron ore in Pilbara
Implementations
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8
Timeline
When Autonomous vehicles arrive
• Likely first available at premium price
• High cost of high grade components (lidar, GPS) would make mass
production cost prohibitive
Wide spread Autonomous adoption
• Likely in 10-15 years, assuming no major incident
• Consequences?
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9
Hardware:
Cisco Systems Inc (NASDAQ:CSCO)
• World leader in networking equipment
• Increase demand for wireless networking equipment
• Invested in Cohda Wireless, Australian company developing V2X
comm technology
• Slightly undervalued at 13.3 PER with 3.88% dividend yield
.
Delphi Automotive (NYSE:DLPH)
One of car industry’s largest suppliers
Pioneered many cutting edge technologies for automobiles
Recently showed off concept autonomous car during CES
Likely to benefit from supplying car companies with components
Slightly undervalued at 16.64 PER and 1.68% yield
Potential Companies (Publically Listed)
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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10
Hardware:
Mobileye (NYSE:MBLY)
• Develops camera- based advanced driver assistance systems
(ADAS)
• Pure play for investors seeking ADAS exposure
• Significant risk of other companies developing their own products
• Tesla announced that Mobileye would be powering the autopilot
feature of their Model S cars
• Overvalued at 151.78 PER, MBLY does not pay a dividend.
Potential Companies (Publically Listed)
Tesla’s Model S
Sources: Tesla
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11
Hardware:
Nvidia (NASDAQ:NVDA)
• Designs graphics processing unit (GPUs) for gaming market and
Systems on Chip (SOC) for mobile computing
• 2014, transitioned into the Auto industry
• Earlier this year, unveiled first in vehicle AI supercomputer, Drive
PX2
• Powered by NVDA GPUs, has 360 situation awareness around
the car
• Capable of processing data from 12 cameras, lidar, radar and
ultra sonic sensors
• Fairly Valued at 30.3 PER, and a 1.42% Dividend Yield, 5 yr averge
PER 20.8x
Potential Companies (Publically Listed)
Drive PX2
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12
Software:
Nokia (NYSE:NOK)
• Nokia HERE is the market leader for automotive embedded maps
• Driverless cars would require extensive up-to-date maps for their on-
board computers
• Potential partner or acquisition target
• Fair valued at 18.7 PER with 2.54% dividend yield
.
Google (NASDAQ:GOOGL)
• First company to venture into the space, significant head start on
development
• Over 1 million miles of self driving on test vehicles
• If GOOGL is the first to develop the OS, likely to reap large benefits
by licensing the OS to other car developers
• Fair valued at 31.34 PER, GOOGL does not pay out a dividend.
Potential Companies (Publically Listed)
Google's in-house driverless car design
Sources: Google
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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13
Others:
Tesla (NASDAQ:TSLA)
• Electric car manufacturer
• Recently updated their Model S with the Summon function
• Allowing the car to park itself and return to the owner at a push
of a button
• Recently beaten down amongst tempered expectations
• Should the company be able to produce a commercially viable
autonomous car, the company could regain favour in the market
• TSLA is currently loss making and we feel it is overvalued given the
risk
Potential Companies (Publically Listed)
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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14
Apple
• Market rumours that Apple is also developing a self-driving car
• Apple has hired several auto engineers from Tesla, Volkswagen etc
• Apple has yet to confirm or deny such rumours
Baidu
Partnered with BMW to produce a self-driving car for the Chinese market
Baidu claims to have completed successful test on the streets of Beijing
Ford
Announced it is tripling its fleet of autonomous test vehicles this year
Announced intentions to test their autonomous cars on the streets of California
Honda
Received approval to test its autonomous cars in California
Special Mentions
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CSI 300 Index
Dark Clouds still looming
Jeremy Ng
Phillip Securities Research Pte Ltd
21st March 2016
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16
Investment Thesis
Boom Bust market structure from 2006 – 2008 (CSI 300 Weekly chart)
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17
Investment Thesis
Bearish rejection off 38.2% Fibonacci Retracement level
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18
Investment Thesis
Characteristics of the boom bust cycle from 2006 - 2008
Follows a series of higher high. Higher low, higher high for the boom
cycle
Follows a series of lower low, lower high, lower low for the bust
cycle
The second leg of the crash finalizes after price broke and close
below the 3122 lower low point
38.2% Fibonacci retracement level halted the pullback and formed
the lower high point
Price fell 47% from the 5891 all time high for the 1st wave down
Price fell 60% for the 2nd wave down
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19
Investment Thesis
Current Market structure (CSI 300 Weekly Chart)
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20
Investment Thesis
Bearish rejection off the 38.2% Fibonacci Retracement level
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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21
Investment Thesis
Similar patterns playing out now
Price followed an identical rally for the boom cycle with a series of
higher high, higher low, higher high pattern
We are in the midst of forming the lower low, low high, lower low
pattern to finalise the bust cycle
Price fell 45% from the 5380 high for the first leg down
38.2% Fibonacci Retracement level capped the pullback from the
lower low point to create the lower high point
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22
Investment Thesis
Similar patterns playing out now
There was a marginal close below the 2952 lower low point on the
week ending 24/01/16 validating the second leg of the bust cycle
The second leg down could take price down to the 1610 previous
low
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23
Investment Thesis
Potential bottoming area
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Further downside next
We could see the 2102 – 1606 support tested for the next leg down
Tradable instrument :
Direxion Daily CSI 300 China A Share Bear 1X shares - (AMEX:CHAD)
24
Conclusion
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2016. All Rights Reserved. For internal circulation only.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
Phillip Securities Pte Ltd (A member of PhillipCapital) Co. Reg. No. 197501035Z © PhillipCapital 2016. All Rights Reserved. For internal circulation only.
Disclaimer
The information contained in this presentation has been obtained from public sources which Phillip Securities Pte Ltd (“PSPL”) has no reason to
believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in this
presentation are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or
warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any
such information or Research contained in this presentation is subject to change, and PSPL shall not have any responsibility to maintain the
information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be
liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made
available, even if it has been advised of the possibility of such damages.
This presentation is intended for general circulation only and does not take into account the specific investment objectives, financial situation or
particular needs of any particular person.
You should seek advice from a financial adviser regarding the suitability of the investment product, taking into account your specific investment
objectives, financial situation or particular needs, before making a commitment to invest in such products.
Disclaimer: The information contained in this document is intended only for use during the presentation and should not be disseminated or distributed to parties outside the presentation. Phillip Securities accepts no liability whatsoever with respect to the use of this document or its contents.
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27
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Pei Sai Teng, Macro
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Jeremy Teong, Banking & Finance
Soh Lin Sin, Consumer | Healthcare
Richard Leow, Transport | REITs (Industrial)
Dehong Tan, REITs
Peter Ng, Infrastructure | Hospitality
Ho Kang Wei, US
Chen Guangzhi, Oil and Gas | Energy
By Phillip Securities Research Mohamed Ghazali, Operations Exec
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