Keep a close eye on chips and ships

Keep a close eye on chips and ships

07-10-2022 | 每月展望
Investors looking for companies that can survive a recession should consider the ‘chips and ships’ scenario for navigating choppy waters.
  • Arnout  van Rijn
    van Rijn
    Portfolio Manager

Speed read

  • Semiconductors and shipping industries as cyclical case study
  • Rates are falling for both but profit margins remain high
  • Equities underpinned by strong earnings look better than bonds

The semiconductor and shipping industries are both examples of cyclical industries that actually become investment opportunities during a downturn, says multi-asset investor Arnout van Rijn.

Investors have been spooked in recent months by soaring inflation and declining economic indicators that are signaling an impending recession. Equities have taken a pounding while government bonds have also fallen as interest rates have risen.

When both major asset classes fall at the same time, it can be hard for multi-asset investors to know where to place their money. So – are there any safe havens out there?

“In the early days, when people were still talking about transitory inflation, post-Covid supply chain disruptions appeared in many parts of the economy, but were particularly prevalent in the semiconductor and shipping industries,” says Van Rijn, portfolio manager with Robeco’s Sustainable Multi-Asset Solutions team.

“In both cases, markets had consolidated, the number of players had dwindled, and supply discipline became the new norm. When Covid hit and central banks decided to print truckloads of money, demand for goods and gadgets picked up unexpectedly fast. Prices shot higher and long lead times became the norm.”


Good news is coming

“Now that most of us are talking about the persistence of inflation and a potential price-wages spiral, good news is coming from these early cyclical sectors.”

He says semiconductor prices started to fall a year ago and accelerated downwards recently, which in the past has been the kind of indicator that prefaces a recession. “The tone from microchip producers has changed dramatically, as they see rising inventories and have no visibility of demand,” Van Rijn says.

“Supply discipline was maintained, but that fact was widely known, so many customers double ordered even more severely than they did in previous cycles. What looked likely to be only a shallow downturn is now turning into a fairly normal ‘hog cycle’. Prices for NAND chips are below what they were pre-Covid, and DRAM prices are back to the levels of late 2019.”

This time it’s different

So, what makes these chips a good bet? “What will be different in this cycle is that corporate profitability and operating margins can stay much higher,” he says. “In an industry that is used to deflation, flat pricing combined with 15-20% annual demand growth and steady growth in productivity is a powerful combination for shareholders.”

“Forward earnings estimates have already been cut in half or even more. Yet, this time around we will not see losses in the industry! Book multiples for the ‘big three’ (Samsung, Hynix and Micron) are close to historical trough levels, while the industry has become a lot healthier.”

“If we can use engagement to convince these companies to do a better job and ‘share the wealth’ – which is a challenge, especially in South Korea – this should be a good time to consider investments in this cyclical sector on the eve of a recession.”

Ebbs and flows

A similar example of falling prices but healthy profits can be seen in the shipping industry, which is also highly cyclical, literally following the ebbs and flows of international commerce.

“In the shipping industry we have seen a similarly dramatic decline of rates, in their case, for the containers,” Van Rijn says. “Rates from China to Europe peaked at USD 15,000 per 40ft container and have now come down to about USD 6,000, though this remains a lot higher than the sub-USD 2,000 levels seen pre-Covid.”

“Prices of the main listed shippers are thus still trading well above their 2019 levels. Here, investors do get paid, with dividend yields easily in the double digits. Shippers’ profits used to disappear in down cycles, and now they will remain profitable, with healthy free cash flows.”

Supply discipline for commodities

Market conditions for the raw materials carried by the ships also relate to this dynamic. “A similar story of supply discipline applies to most commodity markets,” Van Rijn says. “Top-down analysts do not trust the relatively resilient bottom-up numbers for these deeply cyclical sectors.”

“However, we must be aware that the supply-demand dynamic has changed for good. Yes, prices will fall as recession hits demand, but earnings and dividends will not disappear. Companies still have the pricing power to shield themselves from inflation.”

“The wild card here is cash-strapped governments that may try to increase the tax haul from these more-than-average pollutive companies.”

Equities versus bonds

So, what does this all mean for a multi-asset investor for whom asset allocation is key? Rising equity values ultimately rely on rising company earnings, which makes them a better option than bonds, which are more sensitive to inflation and interest rates, Van Rijn says. “Demand destruction will lead to lower prices, but thanks to capex discipline, we will not go back to deflation any time soon,” he says. “Corporate profitability can thus be maintained relatively well in the coming recession.”

“There will be some relief for goods buyers. Shipping stuff from China to the West had in many cases become prohibitively expensive, and getting computer chips to power your electric car had become virtually impossible. Supply chains are definitely normalizing.”

“So, those that still have the money can buy what they want again. Goods inflation will come down quickly in the months to come, but we will not go back to the days of goods deflation. Equities should still offer better protection than bonds, given the outlook for chips and ships.”

Important information

The contents of this document have not been reviewed by any regulatory authority in Hong Kong. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. This document has been distributed by Robeco Hong Kong Limited (‘Robeco’). Robeco is regulated by the Securities and Futures Commission in Hong Kong.
This document has been prepared on a confidential basis solely for the recipient and is for information purposes only. Any reproduction or distribution of this documentation, in whole or in part, or the disclosure of its contents, without the prior written consent of Robeco, is prohibited. By accepting this documentation, the recipient agrees to the foregoing
This document is intended to provide the reader with information on Robeco’s specific capabilities, but does not constitute a recommendation to buy or sell certain securities or investment products. Investment decisions should only be based on the relevant prospectus and on thorough financial, fiscal and legal advice.
The contents of this document are based upon sources of information believed to be reliable. This document is not intended for distribution to or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation.
Investment Involves risks. Historical returns are provided for illustrative purposes only and do not necessarily reflect Robeco’s expectations for the future. The value of your investments may fluctuate. Past performance is no indication of current or future performance.



1. 一般事項


此網站由Robeco Hong Kong Limited(「荷寶」)擬備及刊發,荷寶是獲香港證券及期貨事務監察委員會發牌從事第1類(證券交易)、第4類(就證券提供意見)及第9類(資產管理)受規管活動的企業。荷寶不持有客戶資產,並受到發牌條件所規限。荷寶在擴展至零售業務之前,必須先得到證監會的批准。本網頁未經證券及期貨事務監察委員會或香港的任何監管當局審閱。

2. 風險披露聲明

Robeco Capital Growth Funds以其特定的投資政策或其他特徵作識別,請小心閱讀有關Robeco Capital Growth Funds的風險:

  • 部份基金可涉及投資、市場、股票投資、流動性、交易對手、證券借貸及外幣風險及小型及/或中型公司的相關風險。
  • 部份基金所涉及投資於新興市場的風險包括政治、經濟、法律、規管、市場、結算、執行交易、交易對手及貨幣風險。
  • 部份基金可透過合格境外機構投資者("QFII")及/或 人民幣合格境外機構投資者 ("RQFII")及/或 滬港通計劃直接投資於中國A股,當中涉及額外的結算、規管、營運、交易對手及流動性風險。
  • 就分派股息類別,部份基金可能從資本中作出股息分派。股息分派若直接從資本中撥付,這代表投資者獲付還或提取原有投資本金的部份金額或原有投資應佔的任何資本收益,該等分派可能導致基金的每股資產淨值即時減少。
  • 部份基金投資可能集中在單一地區/單一國家/相同行業及/或相同主題營運。 因此,基金的價值可能會較為波動。
  • 部份基金使用的任何量化技巧可能無效,可能對基金的價值構成不利影響。
  • 除了投資、市場、流動性、交易對手、證券借貸、(反向)回購協議及外幣風險,部份基金可涉及定息收入投資有關的風險包括信貨風險、利率風險、可換股債券的風險、資產抵押證券的的風險、投資於非投資級別或不獲評級證券的風險及投資於未達投資級別主權證券的風險。
  • 部份基金可大量運用金融衍生工具。荷寶環球消費新趨勢股票可為對沖目的及為有效投資組合管理而運用金融衍生工具。運用金融衍生工具可涉及較高的交易對手、流通性及估值的風險。在不利的情況下,部份基金可能會因為使用金融衍生工具而承受重大虧損(甚至損失基金資產的全部)。
  • 荷寶歐洲高收益債券可涉及投資歐元區的風險。
  • 投資者在Robeco Capital Growth Funds的投資有可能大幅虧損。投資者應該參閱Robeco Capital Growth Funds之銷售文件內的資料﹙包括潛在風險﹚,而不應只根據這文件內的資料而作出投資。

3. 當地的法律及銷售限制




4. 使用此網站



5. 投資表現



6. 第三者網站

本網站含有來自第三方的資料或第三方經營的網站連結,而其中部分該等公司與荷寶沒有任何聯繫。跟隨連結登入任何其他此網站以外的網頁或第三方網站的風險,應由跟隨該連結的人士自行承擔。荷寶並無審閱此網站所連結或提述的任何網站,概不就該等網站的內容或所提供的產品、服務或其他項目作出推許或負上任何責任。荷寶概不就使用或依賴第三方網站所載的資料而導致的任何虧損或損毀負上法侓責任,包括(但不限於)任何虧損或利益或任何其他直接或間接的損毀。 此網站以外的網頁或第三方網站皆旨在作參考之用。

7. 責任限制




8. 知識產權


9. 私隠

荷寶保證將會根據現行的資料保障法例,以保密方式處理登入此網站的人士的數據。除非荷寶需按法律責任行事,否則在未經登入此網站的人士許可,不會向第三方提供該等數據。 請於我們的私隱及Cookie政策 中查找更多詳情。 

10. 適用法律


如果您已閱讀並理解本頁並同意上述免責聲明以及同意荷寶收集和使用您的個人資料,用於私隱及Cookie政策 所列的收集和使用個人資料的目的(包括用於直接推廣荷寶的產品或服務),請點擊“我同意”按鈕。否則,請點擊“我不同意”離開本網站。