Market Prognosis

A concise summary of the major macro events of the past 24 hours, and selected UK company-specific news.

<< Back to Market PROGnosis archive

February 21, 2024

Nvidia results awaited nervously, G&H report more industrial de-stocking

Macro

US Tech weakened on NASDAQ ahead of Nvidia results later today. A slight sense of AI/tech fatigue is about, and Nvidia results will be a test. 

China’s equities advanced, responding to the latest policy stimulus measures. Chinese equities continue to churn without real direction. However, the slide of recent months has abated for now. 

HSBC highlighted the issues in China, reporting a sharp fall in Q4 earnings due to write-offs relating to Chinese banking assets and real estate loans. 

UK Companies

Angling Direct updated that overall trading for FY24 is in line with market expectations. Its UK store sales were up 7.6%, and online sales increased 13.5%. It optimised stock investment, driving down underlying working capital requirements—cash position ahead at £15.8m.

It’s a decent update. AD’s cash equates to c. 50% of the EV. Europe remains a profit drag, but the top line continues to grow. A strategic decision regarding its European plans will be needed soon.  

Gooch & Housego warns that while its order book has increased to £128.5m, Industrial and Medical laser market customers have been reducing their inventory and reporting near-term demand weakness. The inventory adjustment is proving to be more profound and prolonged than anticipated. Profit is expected to be below management’s prior guidance and more H2-weighted. 

G&H follows Dialight and XP Power in a recent spate of warnings about slowing sales channels for industrial devices. G&H and XPP both mentioned medical device customers.  

This communication is provided for information purposes only, and is not a solicitation or inducement to buy, sell, subscribe, or underwrite securities or units. Investors should seek advice from an Independent Financial Adviser or regulated stockbroker before making any investment decisions. Progressive Equity Research Ltd (“PERL”) does not make investment recommendations.

Opinions contained in this communication represent those of PERL and/or our affiliates at the time of publication and PERL does not undertake to provide updates to any opinions or views expressed. PERL does not hold any positions in the securities mentioned in this communication, however, PERL’s directors, officers, employees, contractors and affiliates may hold a position,  and/or may perform services or solicit business from, any of the companies or related securities mentioned.

Any prices quoted in our research are as at the previous day’s close.