To The Moon

1. Tourist arrivals in #Macau, the gambling Mecca of Asia, hit 2.2 million in June. That was 71% of pre-pandemic levels for the same month in 2019. For the first 6 months of the year, tourist arrivals reached 13 million, or about 70% of pre-pandemic levels. There’s definitely a significant level of improvement in the territory’s tourism-driven economy following several years of lockdowns, which closed off Macau to both mainland Chinese and international tourists.

#Casino operators are spending billions to reinvent themselves into more family-oriented establishments after Beijing’s crackdown on junket operators with a reputation for aiding illicit money flows out of China. S&P Global estimates Macau’s total Gross Gaming Revenues (GGR) to reach 75% to 85% of 2019 levels, which would indicate US$29 billion in GGR this year. That’s nearly double the total gaming revenue generated by the entire state of Nevada last year, and about half of gaming revenues in all of the U.S., from a city just twice the size of Manhattan. $Wynn(WYNN)$ $Las Vegas Sands(LVS)$ $MGM Resorts International(MGM)$

2. Taiwan #Semiconductor Manufacturing, the world’s largest chip manufacturer, came out with 2nd quarter results that beat expectations. Earnings fell 23% on a 10% decline in revenue, as weakness in the global smartphone industry remained a drag on business. The company lowered its full-year revenue growth guidance to a decline of 10%, worse than the single-digit decline expected during last quarter’s earnings release. #TSMC also warned of delays in starting up its Arizona foundry due to difficulties finding qualified workers and rising expenses. It could be 2025 before they are able to begin producing chips from this plant. Anything can happen between now and then but the near-term outlook for the chip industry is not looking that good considering the weak global economy and China’s declining chip imports. $Taiwan Semiconductor Manufacturing(TSM)$ $NVIDIA Corp(NVDA)$ $Micron Technology(MU)$ $Advanced Micro Devices(AMD)$ $iShares Semiconductor ETF(SOXX)$ $Lam Research(LRCX)$

3. China announced that the country built 600,000 #5G base stations in the 2nd quarter of the year, bringing the country’s total to a whopping 2.937 million base stations. By contrast, the US built a paltry 100,000 5G base stations as of 2022. This puts China on track to reach 90% 5G penetration by the end of the year. That opens up a slew of new and important applications such as smart cities, fully-autonomous vehicles, and automated supply chains that need very little human intervention. The widespread rollout of 5G networks across China also supports the growth in industries like data centers and Internet of Things (#IoT) product manufacturers, which are used in smart homes, offices, and public buildings.

4. The number of 5G subscribers in China’s #mobile phone market is picking up. China Mobile, the dominant mobile service provider in the country, added 14.85 million new 5G subscribers in June. That’s up from 8.15 million in May, and it brings China Mobile’s total 5G subscriber base to 722 million. Even smaller China Unicom is growing its 5G subscriber base with 2.82 million added in June, for a total of 232 million 5G subscribers. Chinese mobile service providers are among the biggest in the world and boast of low single-digit PE ratios with mid-to-high single-digit dividend yields and strong cash flow. They also collectively own the operator of 5G base stations in the country, China Tower, which has managed to increase dividends each year for the last 4 years. $CHINA MOBILE(00941)$ $CHINA TOWER(00788)$ $CHINA UNICOM(00762)$ $FL2 CSOP HSCEI(07288)$

5. Beijing is feeling the pressure to do more to stimulate growth in its economy after a couple of weeks of statements from high ranking officials pledging support and praise for its private enterprises, particularly the tech industry. After announcing a 31-point plan to level the playing field for private businesses and cut the red tape, the National Development and Reform Commission (#NDRC) said it would be announcing two policies soon to “promote business investment and overall development.” There’s not much detail nor exact time frame given for the release of these two policies. Anything short of a strong #stimulus package aimed at getting consumers to spend, backed with government spending and corporate assistance, will keep investors at bay. $KraneShares Bosera MSCI China A 50 Connect Index ETF(KBA)$ $iShares MSCI China ETF(MCHI)$ $Global X China Financials ETF(CHIX)$ $iShares China Large-Cap ETF(FXI)$