Source: Barron's Chinese Author: Nicholas Jaskinski Evan Greenberg, CEO of Chubb Ltd, has a highly influential fan - Warren Buffet, CEO of Berkshire Hathaway. Berkshire Hathaway disclosed last month that it held 6% of the shares in Chubb, one of the world's largest insurance companies, by the end of 2023. Berkshire itself is a major participant in the insurance industry, but it is not the only buyer. In the past year, Chubb's stock return, including dividends, was about 40%, surpassing the S&P 500 index's total return of 25%, and making the company's market capitalization reach $110 billion. This increase in market capitalization reflects Chubb's outstanding performance, which is attributed to its prudent underwriting practices and conservative management of its investment portfolio of about $140 billion. The company's earnings per share increased by 48% in 2023 and its book value per share increased by 21%. Greenberg is the son of Maurice "Hank" Greenberg, the former CEO of American International Group (AIG). Greenberg worked at AIG for 25 years, rising through the ranks. He left the insurance company in 2000 and took over Ace Limited in 2004. The company merged with Chubb in 2016, the largest M&A in the property and casualty insurance industry at the time. Today, Chubb is the largest commercial insurance provider in the United States, and the company is also known for its high-end homeowner insurance for the wealthy. However, about half of the company's premiums last year came from outside the United States. Asia has always been a growth area where the company is bullish: Although Asia accounts for 40% of global GDP, the insurance industry accounts for only 26% of the global insurance market share. This gap is expected to narrow over time. Greenberg sits on the board of several nonprofits that focus on international and Asian affairs. Barron's recently interviewed Greenberg about his underwriting philosophy, the challenges of dealing with increasingly frequent climate disasters, and US-China relations. Following are the edited excerpts of the conversation.
Author: Adam Clark. As the main beneficiary of the AI boom, the stock price has risen sharply. ASML provides lithography products, which are crucial to the semiconductor manufacturing industry, and its customers include ... Samsung Electronics (005930.Korea), and more. Thanks to the market's bullish expectations for AI chips, ASML's stock price has risen as much as 42% since the beginning of the year, relying on its leading position in the chip manufacturing supply chain. However, after ASML released its Q1 report on April 17, the stock fell 7%. The Q2 report to be released on July 17 has raised some concerns among investors. UBS analyst Francois-Xavier Bouvignies wrote in a research report: "the market's sentiment towards (ASML) earnings is still relatively optimistic, but concerns caused by disappointing order volumes in the last quarter are increasing." TSMC is a key customer of ASML. ASML hopes to sell its latest lithography machines - used to manufacture 2 nanometer processors for the next generation of smartphones - to the Taiwan, China chipmaker. Previously, TSMC publicly stated that it was reluctant to order ASML's latest high numerical aperture extreme ultraviolet (High NA EUV) lithography machine. Instead, it continues to use existing lithography machines for advanced chip manufacturing, citing high costs - the machine sells for more than 0.35 billion euros (about 0.378 billion US dollars). Intel was the first company to purchase the latest lithography machine. However, ASML is still confident. Jefferies cited TSMC CFO Roger Dassen's comments on a German investor call, saying that TSMC will receive ASML's most advanced chip-making machine this year. Bouvignies of UBS also holds the same view. He said that ASML's Q2 order amount may exceed 5 billion euros - higher than the market's generally expected 4.6 billion euros. Bouvignies wrote: "We expect that the upward risk of (ASML)'s 2024-2025 performance guidance will increase, driven by TSMC's capital expenditure increase, strong demand in the Chinese market, and the strengthening of the memory cycle." UBS maintains its "buy" rating on ASML stock, with a 12-month target price of 1050 euros. As of the close on July 4th, ASML's stock on the Dutch market rose 0.2% to 988 euros. As of the close on July 3rd, ASML's US stock rose 2.24% to $1071.41. The US stock market was closed on July 4th for the Independence Day holiday.

Since the beginning of this year, the stock price has surged by 171.5%, and this week it has once again topped the market cap list of US stocks. Although the stock experienced a significant pullback on Thursday, Bank of America believes that it still represents an attractive investment opportunity. Any dip in Nvidia's stock should be viewed as a chance to buy more.$ASML Holding (ASML.US)$As the main beneficiary of the AI boom, the stock price has risen sharply.

ASML provides lithography products, which are crucial to the semiconductor manufacturing industry, and its customers include ...$Taiwan Semiconductor (TSM.US)$... Samsung Electronics (005930.Korea), and more.$Intel (INTC.US)$etc.

Thanks to the market's bullish expectations for AI chips, ASML's stock price has risen as much as 42% since the beginning of the year, relying on its leading position in the chip manufacturing supply chain.

However, after ASML released its Q1 report on April 17, the stock fell 7%. The Q2 report to be released on July 17 has raised some concerns among investors.

UBS analyst Francois-Xavier Bouvignies wrote in a research report: "the market's sentiment towards (ASML) earnings is still relatively optimistic, but concerns caused by disappointing order volumes in the last quarter are increasing."

TSMC is a key customer of ASML. ASML hopes to sell its latest lithography machines - used to manufacture 2 nanometer processors for the next generation of smartphones - to the Taiwan, China chipmaker.

Previously, TSMC publicly stated that it was reluctant to order ASML's latest high numerical aperture extreme ultraviolet (High NA EUV) lithography machine. Instead, it continues to use existing lithography machines for advanced chip manufacturing, citing high costs - the machine sells for more than 0.35 billion euros (about 0.378 billion US dollars). Intel was the first company to purchase the latest lithography machine.

However, ASML is still confident. Jefferies cited TSMC CFO Roger Dassen's comments on a German investor call, saying that TSMC will receive ASML's most advanced chip-making machine this year.

Bouvignies of UBS also holds the same view. He said that ASML's Q2 order amount may exceed 5 billion euros - higher than the market's generally expected 4.6 billion euros.

Bouvignies wrote: "We expect that the upward risk of (ASML)'s 2024-2025 performance guidance will increase, driven by TSMC's capital expenditure increase, strong demand in the Chinese market, and the strengthening of the memory cycle."

UBS maintains its "buy" rating on ASML stock, with a 12-month target price of 1050 euros.

As of the close on July 4th, ASML's stock on the Dutch market rose 0.2% to 988 euros. As of the close on July 3rd, ASML's US stock rose 2.24% to $1071.41. The US stock market was closed on July 4th for the Independence Day holiday.

Editor / jayden