1. #retail Retail automation is getting bigger (Morning Brew)

Berkshire Grey, a robotics and AI startup specialized in retail fulfillment automation has completed its series B funding, led by SoftBank, BG said that its robots help curbing 70-80% labor cost and increasing throughput by 25-35%. This event marks the rising trend of robotics in retail fulfillment, after many investments of Amazon, Walmart,… They are actively seeking automation in their fulfillment centers as robots don’t need break and they are injury-proof, compared to humans.

2. #companyanalysis Panasonics is going to automotive industry to strengthen its well-diversified business (SeekingAlpha)

Panasonics’ portfolio includes appliances, life solutions, automotive, connective solutions and industrial solutions.  The company has set up a joint-venture with Toyota to produce prismatic batteries for Toyota’s hybrid cars and EVs. The battery business is expected to be the growth driver of the company in the next 5 years. Meanwhile, other revenue segments are performing well. Panasonic plans to set up a new factory in China, focus on home appliances and life solutions (the two biggest revenue stream), to take advantage of the upsurge population of the local country.

3. #payment Deeper insights on Visa-Plaid case (Stratechery)

Before reading this analysis, it’s better to know what happened from my sister’s summary on this case. This article digs deeper into what Visa and Plaid are, and their role in the payment system around the world. Visa’s already dominated the credit card market, but it is looking to expand its presence in the burgeoning field of electronic payments, where trillion dollars are sent by wire transfer or between bank accounts globally each year. Plaid will help Visa to achieve this mission by its software, which helps developers to get access to customer financial information from their bank accounts.

1. #economics The US-China trade deal presents a paradox for the market (Kristina Hooper)

I updated this topic on Jan 17. Kristina Hooper provided a quite insightful picture of this first deal. First, she believed that this action is inconsequential, yet extremely important. It is inconsequential as US still leaves most of its exclusive tariffs in Chinese goods (only tariffs in $120B out of $500B were reduced) and the deal only tackled low-hanging fruits such as trade imbalance, but not other serious issues. Meanwhile, the deal has a “psychological” effect on companies: the tension is bottoming out, then they will feel economics policy is getting more certain, then they will spend more, esp on capex. Secondly, Kristina pointed out that it’s hard for China to commit to this deal based on their historical purchase of US goods, as well as new agreements with countries like Brazil.  She called this “some flies in the ointment”. Thirdly, the trade war between US and EU is poised to be on the horizon. Trade war with EU brings less damage to US than with China, but it still leads to negative psychological effects on companies: make them tamp down capex spending

2. #tech Coworking and flexible office space are scaling back after years of breakneck growth (PitchBook)

After WeWork with its ill-fated IPO, many smaller players are laying off their employees to curb operating cost. The new players of this “plummeting” club is Knotel with nearly one third of employees stopped working with the company. The leader from Knotel stated that the decision is to align the supply and demand for these leasing businesses in big cities. This trend makes me wonder why some coworking start-ups in Vietnam like UpGen still remain healthy?

3. #tech The future of Apple (BI Intelligence)

They are the two peripheral segments: “Service” and “Wearables, Home and Accessories (WHA)”. The bread and butter – IPhone is going down due to the saturated smartphone market, longer life-cycle, reducing exported revenue because of the trade world,…. While IPhone remains the biggest pie of Apple revenue as it is the cynosure of a consumer’s connected ecosystem experience, Service and WHA will rise to curb its decreasing revenue. Regards to service, Apple is focusing on Appstore with the change from one-time purchase to subscription service, which is a more reliable and predictable revenue generator. Moreover, the company states that it is also investing in developing AR apps (a very lucrative pie in the future). About WHA, Apple is expanding the range of health-offering in its Apple Watch as it is the main driving force of purchase

1. #economics IMF trimmed its growth forecast for global economy 2020 to 3.3% (Finimize)

The reason is why IMF expects more positive signs, other potential risks balance them out. It’s good for global growth as trade war came to first signed, the slump in manufacturing is bottoming out and central banks are cutting rates around the world. Countering them are the risk of renewed trade tensions, conflicts between US and Irad that could affect oil supply, social unrest and weather-related disasters.

2. #tech Why Earpods went viral (Above Avalon)

Earpods has been so successful because it satisfies the 2 fundamental requirements of a viral wearable device. The first one is eco-system, which means it belongs to a selection of tools targeting different parts of the body. Second is “fashion”, the design makes people want to wear and to be “seen”. The blog is also interesting for the one who wants to follow Apple and their strategy.

3. #stockanalysis Broadcom is an oil stock in 21st industry (SeekingAlpha)

The author, a proponent for selling oil stock and buying semiconductor stocks, recommended buying Broadcom now. After the trade tensions, Broadcom lost its biggest customer Huawei (3.4% total revenue), which made its revenue stagnant. However, the company is making strides to find new markets and expanding their product line to be less dependent from their current bread and butter: semiconductors. With the growing FCF 45.25% for the last 5 years, its stock is undervalued today.

1. #economics Chinese’s rosy end to the year (Finimize)

Chinese has reported last quarter growth: 6.1%, the lowest rate since 1990, mainly blaming for the trade war. However, as the tensions ebbed, the growth is expected to be more stable next quarters. Also, the overall economy shows positive signs: investment shot up esp in manufacturing industry, and retail sales grew higher than expected. China’s strong performance, along with preliminary trade deals signed, could predict a brighter future ahead for the worldwide market.

2. #finance Vietnam Working Capital study (PwC)

Vietnam companies should focus on optimizing cash to maintain a steady course of sustainable profits. From PwC’s 2018 survey, despite robust revenue growth, companies were unable to convert sales into cash. Vietnam C2C days performance lags behind almost all ASEAN countries, and it even declined from 2017 to 2018. Some decliners are engineering & construction, consumer products and real estate.

3. #investment. Amazon and Microsoft: Valuing the cloud

A very interesting but technical-heavy article on whether to buy Amazon or Microsoft stock right now. While Amazon has retained their noteworthy grasp on leadership of the cloud computing market, their market share will decline due to the breakneck-speed growth of Azure (Microsoft).

1. #fashion. The rise and fall of American Apparel (CNBC Youtube)

American Apparel used to be an icon, but went down in 2016 for three main reasons. First reason is its reliance on US manufacturing (its promise), that led to the lack of blue collar workers, then the brand needed to hire illegal employees and get published after that. Secondly,  the rising price of cotton led to mounting losses, along with the company effort of opening as many stores as possible in every capital city. Finally, American Apparel did not have the appropriate strategy to deal with all financial challenges. It changed its CFO 4 times in a year and withheld from Deloitee and committed to bad practices in financial reporting.

2. #banking. How Goldman Sachs plan to ramp up its wealth management business (pulse2)

Goldman Sachs, after trailing behind his peer last 2019 quarter,  how it plans to “use” its balance sheet. The company will look into wealth management for small customers, whose assets ranges from $1 million to $15 million. Also, it is looking for more wealth-management opportunities in China, with support from president Xi Jinping to boost its stake in the joint-venture investment bank. Besides, the new strategy includes the movement from reliance in private equity to wealth management due to regulatory scrutiny associated with this kind of investment.

3. #newsingeneral 5 things you need to start your day (Bloomberg)

• Oil price is expected to strike due to supply reduction: Libya commander stopped export in his port and Iraq temporarily stopped work on an oil field
•  A slump in UK’s December retail sales presage a rate cut on Jan 30, which will boote the exchange rate of sterling
• Major politicians and more than 119 billionaires will gather in WEF 2019, 21-24 Devos.
• Asian stocks gain modest gains as investor continue to bid up prices, the offshore yuan extended it gains, to the strongest after July 2020
• There is a lull in European earnings this week, but it wont last long

1. #fashion. GAP recoupled with Old Navy 

After 2 days announcing the separation, GAP took it back. Why? The break-up of supply chain is too expensive and too complicated. Another reason is, the strongest proponent of this decision, former CEO Art Peck left the company last November.

2. #EV  Tesla fuels its growth trajectory by increasing production (SeekingAlpha)

Tesla is on its road to steady profitability and the primary catalysts are the increase of production capacity and geographical diversification. Elon Musk will open a new Gigafactory in China, the country with the highest EV sales last year. This action will also reduce the impact of the trade world on the price of Tesla cars, making it more affordable for local people. Besides, the company announced that it will set up a new factory in Germany in 2021. The new one will increase Tesla production in this country, taking advantage of new EV subsidies from the government.

3. #Hotel  The world’s largest budget hotel chain: Oyo scaled back because of its investor, SoftBank (NYtimes)

Oyo’s losses mounted, and SoftBank demanded the company must be profitable, in EBITDA till the middle of 2020, which led to the company’s earliest action. Oyo has pulled out of a dozen cities (even a quarter of it in India), cut thousands of hotel rooms, slashing jobs to curb operating expenses as much as possible. This step contributes the heat to the steaming situation of SoftBank-backed start-ups (read more in my previous article)

Follow Vietnamese discussion on this topic here

1. #tech. Pitchbook

Apple acquired an AI start-up Xnor.ai for $200M, with the potential to shore up its core money-maker – Iphone. Xnor.ai can makes technology that allows Ai to operate on locally low-power devices, which could help free Apple products from relying on cloud for complicated tasks

2. #economics. MorningBrew

Details on the first deal between US and China. US will export more to China ($200B for the next two years) and in return, it will lower tariff on $120B China exported goods from 15% to 7.5%. The losers are US farmers, and winner is…China

3. #movicestreaming. Inc.com

The competition in streaming market is going steamed witht the debut of Peacock from NBCUniversal. However, Netflix, the market leader is still going well as their subscribers do not leave it.

Summary of my favorite topic: Fool: Spotify – How a pure-player compete with loss leaders

Music streaming has been the growth engine of music industry’s resurgence over the last decade, and Spotify is one of the key contributors to that engine. The battle in streaming is highly competitive and Spotify has taken further steps to maintain its present.

Spotify’s competitors are small companies under colossuses’ umbrellar, such as Apple music by Apple and Amazon music limited my Amazon. To rack up as many subscribers as they can, these ones are willing to make losses when label price hits a wall. In contrast, Spotify must define its own path to profits

In reality, Spotify has implemented two steps. First, it is building a two-sided marketplace, where artists can utilize the massive network of listeners instead of depending on record labels. Second, Spotify has jumped into the podcast world and became the biggest player, then the advertising future is promising ahead.

 03 most interesting news today

1. #tech. Nytimes

Despite many challenges ahead, Alphabet reached the market cap milestone: $1 Trillion, after Apple, Microsoft and Amazon.

2. #fashion. Fortune

Gap spinned of Old Navy, on the premise that its growth doesnt reflect on GAP stock price. Then GAP stock price rise, but it’s underlying health is still a concern as it has lost its identity in recent years.

3. #economic. Nytimes

US and China signed the phase 01 of trade deal, in 8 terms and rolling out in…phase. The terms revolves around central topic of the disagreement such as intellectual property, increase purchase of agriculture goods and and the resolution of business dispute

Summary of my favorite topic: Benzinga: Why growth in Latin America matters for Netflix

Netflix has achieved the penetration rate of 650-700 points in Latin America, even higher than its peak in the US in 2013. This successful performance previews the growth in emerging markets.

Latin America is perceived as a lower-developed than the US. But it has a young population and high-TV pay price. Netflix has put some investment in local content to create some hits widespread all over the key countries.

The context is quite the same in Asian-Pacific countries. However, two problems arose: higher TV price and the difference in local taste, which is hard for Netflix to resonate with. To tackle them, Netflix has aggressively ramping its local content production in Asian countries.