TRADE OF THE WEEK Products to be strong growth drivers in 2021 and beyond

International Trading Report WEEK COMMENCING 1 FEBRUARY 2021

Macrovue’s Trades of the Week Market update 01 Nvidia 02 Global market insights from Macrovue Chief Market Analyst Clay Carter. WEEK COMMENCING 1 FEBRUARY 2021

01 Macrovue’s Trades of the Week

Nvidia (NVDA) Market cap. US$326.9Bn Nvidia is a leader in graphics processing units or GPUs. It designs and manufactures Nvidia data center demand is also solid, with potential enterprise recovery in 2H21. NVDA graphics chips, which are used in gaming, data centres, and automotive end markets. Nvidia noted data center revenue mix at approximately 50% enterprise, 50% hyperscale, which has transformed itself from a PC centric company to a diversified gaming, data centre, and could be a tailwind for the company in C2H21 when enterprise bounces back post-COVID. auto software platform and is benefiting from strong secular trends such as VR/AR, machine NVDA noted both A100 and V100 (Volta) demand are outstripping supply and sees 2021 as a learning, Artificial Intelligence (AI), and autonomous driving. good year for data center with conversational AI, recommender engines, and data analytics. With its “Next Gen Gaming” platform rollout Nvidia continues to stay 1-2 steps ahead of Nvidia noted it does not see competition from "multi-core AMD CPUs in AI" or DG-1/DG-2 competitors: Nvidia has recently launched its next-gen GeForce RTX 30xx series of gaming as competitive given a strong CUDA software/ecosystem moat. graphics processors (GPUs) based on its leading Ampere-based architecture. The new In automotive, NVDA sees multiple automotive partnerships (Mercedes, Xpeng, Li Auto) to products RTX 3070/3080/3090 are now in volume production and will be available shortly. potentially drive growth in 2022 with a focus on AI-driven software stack required for We expect the products to be strong growth drivers in 2021 and beyond. ADAS, autonomous driving and EVs. NVDA noted the ARM acquisition is still on track for an estimated C1Q22 close with global regulatory discussions ongoing. Recently Nvidia made a number of presentations to the investment community in terms of its 2021 outlook and industry fundamentals. Core data center is tracking well in F4Q (Jan) as the major hyperscalers ramped up their CapEx spending on accelerators in the data center, bucking overall CapEx trends. Moreover, Nvidia points out that that their gaming business is strong, with a long adoption roadmap A100 inference adoption rates are accelerating as average inference GPU capacity now for its ray tracing RTX3090/3080/3070 products and the new 3060 even as the products exceeds CPU capacity driven in part by adoption of (now using A100 instances) are currently supply-constrained. NVDA also noted only 10% of its installed 100M+ gaming joining Google, Alibaba and Azure along with the major vertical segments (e.g. Walmart) customer base has ray tracing (a rendering technique that can produce incredibly realistic So net net all the stars are aligned for Nvidia in 2021 in our view. lighting effects) and the fact that the new RTX 3060 lineup is at attractive price points should drive adoption. The stock has been a bit of an indifferent performer in the the last four months for no good reason, so we see this as an opportunity to pick up one of the best stories in technology.

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01 Macrovue’s Trades of the Week

NVIDIA 1 yr

Source: Bloomberg WEEK COMMENCING 1 FEBRUARY 2021

Market Update 02 With Clay Carter - Head of Macrovue’s Investment Committee

QUOTE OF THE WEEK “If you have ten thousand regulations, you destroy all respect for the law."

– Winston Churchill (British Prime Minister)

U.S. stocks were off on Friday, after what was clearly a roller-coaster Investors are concerned that if GameStop continues to rise in such a volatile fashion, it may week on Wall Street as frenzied speculative trading by retail investors ripple through the financial markets, causing losses at brokers like Robinhood and forcing unnerved the market. hedge funds who bet against the stock to sell other securities to raise cash. On the al important vaccine front, new trial results from Johnson & Johnson’s coronavirus The Dow Jones Industrial average was down 2%. The S&P 500 fell 1.9% as all 10 sectors vaccine were announced but it has proved less effective on some variants. J&J said its registered losses. The Nasdaq Composite slid 2%, as Apple was off 3.7% and other tech one-dose vaccine demonstrated 66% effectiveness overall in protecting against Covid-19. names also headed lower. The vaccine was 72% effective in the United States, 66% in Latin America and 57% in South So, all three major averages dropped more than 3% this week, posting their worst week Africa after four weeks, the company said. The vaccine however offered complete since October. For January, the Dow and the S&P 500 fell 2% and 1.1%, respectively, protection against Covid-related hospitalizations so its still a valuable in the relentless suffering their first negative month in four, however Nasdaq, resilient as ever, eked out a battle versus the pandemic. 1.4% gain for the month. A mob of retail traders have been persuading on another on the popular WallStreetBets Shares of failed video game retailer GameStop jumped 67.9% after Robinhood said it would Reddit forum to buy into the most shorted companies by hedge funds, creating massive allow limited buying of the stock after restricting access the day before. Apparently, “short squeezes” in the stocks. GameStop has soared more than 1,600% in January, while Robinhood had to raise $1 billion from its existing investors overnight, in addition to AMC Entertainment has rallied over 500% this month. tapping bank credit lines, to ensure it had the capital required to allow some trading again in volatile stocks like GameStop. Obviously upstart Robinhood is NOT Goldman Sachs. WEEK COMMENCING 1 FEBRUARY 2021

Market Update 02 With Clay Carter - Head of Macrovue’s Investment Committee

Last week on the markets

Global markets all lower on Friday. (1 day return local currency centre columns: 5 `As for the for the monthly returns (far right columns) China a clear winner along Day return far right) AUD still a bit of a tailwind for 5-day returns. That’s not a bad with Nasdaq. thing.

Source: Bloomberg Source: Bloomberg WEEK COMMENCING 1 FEBRUARY 2021

Market Update 02 With Clay Carter - Head of Macrovue’s Investment Committee

Other Overnight Market Data Friday’s Close Markets Departments AUD AUD at .7614 -0.48% Energy was the best performing sector in the S&P 500 this month. Commodities The yield on 10-year Treasuries is at 1.071% +0.016 Bonds West Texas Intermediate (WTI) crude ended down 0.38% to $52.14 on demand fears. Gold up 0.44% to $1,845.50 an ounce.

Source: Trading View Microsectors WEEK COMMENCING 1 FEBRUARY 2021

Market Update 02 With Clay Carter - Head of Macrovue’s Investment Committee

Markets Departments

In terms of revenues, 76% of S&P 500 companies have reported actual revenues above estimates, which is above the five-year average of 62%. In aggregate, companies are reporting revenues that are 3.2% above the estimates, which is also above the five-year average of 0.9

Source: FactSet WEEK COMMENCING 1 FEBRUARY 2021

Market Update 02 With Clay Carter - Head of Macrovue’s Investment Committee

Markets Departments

Source: FactSet WEEK COMMENCING 1 FEBRUARY 2021

Market Update 02 With Clay Carter - Head of Macrovue’s Investment Committee

Macrovue Quarterly Earnings

Capital One Financial (COF) (CMCSA) Capital One Financial reported Q4 FY2020 revenue of $7.34B, down 1.2% Y/Y beating Comcast Q4 FY2020 revenue was $27.7B, down 2.5% Y/Y and beat consensus by $940M. consensus by $430M. Q4 non-GAAP EPS was $5.29 beating by $2.55 and GAAP EPS Non-GAAP EPS was $0.56 beating by $0.08 and GAAP EPS was $0.73 beating by $0.35. was $5.35 beating by $2.58. Earnings in the quarter benefited from lower credit provisions Cable Communications adjusted EBITDA increased 12.3% in Q4 and total customer and a $60M equity investment gain. Average credit card and commercial banking relationships grew by 455,000 and total high-speed internet customers grew by 538,000, loans declined while consumer banking loans increased slightly. a Q4 record for both areas offsetting a fall in total video customers of 248,000 and total Provision for credit losses decreased 20% to $264M from a Q3 FY2020 provision of $331M. voice customers of 24,000. Q4 net charge-off rate declined to 1.38% from 1.72% which refers to the amount of bad debt CEO Brian Roberts stated “outstanding performance at Cable drove very strong fourth that is written off due to the unlikeness of being recovered by the company. quarter results for our company…Our theme parks in Orlando and Osaka reached breakeven; and encouragingly, Sky returned to customer growth in all three of its markets.” Capital One Financial reinstated its dividend of $0.40 per share and the board authorised the Peacock launched successfully, the premium advertising-supported video-on-demand company to repurchase $7.5B of stock with $500M to be repurchased in the first quarter of 2021. Lor service, and has 33M sign-ups across the United States to date. Capital One Financial is held in Macrovue’s “High Quality” thematic portfolio of “Vue”. Comcast announced that it is increasing its dividend by $0.08 or 9% to $1.00 per share on an annualised basis for 2021 with $0.25 payable as the quarterly dividend in April. Brian Roberts also stated “with the vaccines rolling out throughout the world, we are optimistic that the parts of our business that had been most impacted will soon be back on a path towards growth.” Comcast is held in Macrovue’s “Entertainment” thematic portfolio or “Vue”. WEEK COMMENCING 1 FEBRUARY 2021

Market Update 02 With Clay Carter - Head of Macrovue’s Investment Committee

Macrovue Quarterly Earnings

Dolby Laboratories (DLB) Flex (FLEX) Dolby Laboratories Q1 FY2021 revenue was $389.9M, up 33.6% Y/Y beating consensus by Flex Q3 FY2021 revenue was $6.7B, up 3.7% Y/Y and beating consensus by $470M. $44.54M. Non-GAAP EPS was $1.48 beating by $0.44 while GAAP EPS was $1.30 beating by Non-GAAP EPS was $0.49 beating by $0.12 while GAAP EPS was $0.41 beating by $0.14. $0.50. "Flex's strong third quarter performance exceeded our prior expectations, as robust CEO Kevin Yeaman stated "we had a good start to the fiscal year with solid financial results demand across our portfolio drove solid revenue growth. Furthermore, our operational and ongoing progress across our growth initiatives…Dolby Vision and Dolby Atmos continue focus and disciplined execution delivered record adjusted operating margin and EPS" to grow across more devices and services, including new focus areas like music and gaming. ” said CEO Revathi Advaithi. COVID-19 continues to impact global markets and Dolby’s financial results rely on estimates Revenue guidance for Q4 FY2021 is expected to be $5.6B to $6.0B with analyst consensus of royalty-based revenue that take into consideration the macroeconomic effect of global being $5.56B and expected EPS is $0.32 to $0.38 versus analyst consensus of $0.30. events which may impact supply chain activities and consumer demand for electronic products. The company is also pursuing alternatives for the NEXT business with options such Guidance for the second quarter is estimating revenue of $280M to $310M with diluted as a full or partial separation of the business through an initial public offering, sale, EPS ranging from $0.36 to $0.51 on a GAAP basis and from $0.57 to $0.72 on a non-GAAP spin-off, or other transaction being considered. basis although these estimates could be impacted as COVID-19 continues to affect the Flex is held in Macrovue’s “Car of the Future” thematic portfolio or “Vue”. global cinema market. A dividend of $0.22 per share was announced payable on 19 February 2021. Dolby Laboratories is held in Macrovue’s “Entertainment” thematic portfolio or “Vue”. WEEK COMMENCING 1 FEBRUARY 2021

Market Update 02 With Clay Carter - Head of Macrovue’s Investment Committee

Macrovue Quarterly Earnings

Las Vegas Sands (LVS) McDonald’s (MCD) Las Vegas Sands Q4 FY2020 revenue was $1.15B a 67.3% decrease Y/Y and missing McDonald’s Q4 FY2020 revenue was $5.31B, down 2.2% Y/Y and missing consensus by consensus by $120M. Q4 non-GAAP EPS was -$0.37 missing consensus by $0.02 and $40M. Non-GAAP EPS was $1.70 missing by $0.07 while GAAP EPS was $1.84 beating GAAP EPS was -$0.39 which was in-line with consensus. by $0.11. Compared to an operating income of $934M in the prior year, the company operated at a loss Q4 global comparable sales declined 1.3% although improved from the prior quarter reflecting of $211M. Consolidated adjusted property EBITDA was $141M, compared to $1.39B in the positive comparable sales in the United States of 5.5%, and negative comparable sales in the prior year with a Macau property EBITDA of $47M versus a $79.8M consensus and the International Operated and International Developmental Licensed segments of 7.4% and 3.6%, Las Vegas property EBITDA of -$50M versus a $4.7M consensus. respectively. Full year 2020 operating loss was $1.69B, compared to an operating income of $3.70B in 2019. The United States sales benefited from strong average check growth with strategic Unrestricted cash balances as of December 31, 2020 were $2.12 billion. marketing investments and promotional activity having a positive impact. International CEO Robert Goldstein stated "we remain optimistic about the eventual recovery of travel and Operated Markets suffered from COVID-19 resurgences and related government restrictions, tourism spending across our markets. We are fortunate that our financial strength supports primarily driven by France, Germany, Italy and Spain. While most markets were negative, our previously announced capital expenditure programs in both Macao and Singapore, sales for Australia and the United Kingdom were positive. For International Developmental as well as our pursuit of growth opportunities in new markets." Licensed Markets sales were negatively impacted primarily in Asia and Latin America which was partially offset by Japan. Las Vegas Sands is held in Macrovue’s “Gaming” thematic portfolio or “Vue”. Full year global sales declined 7.7% with United States sales up 0.4% while International \ . Operated and International Development Licensed segments falling 15% and 10.5% respectively. McDonald’s is held in Macrovue’s “High Quality” thematic portfolio or “Vue”. . WEEK COMMENCING 1 FEBRUARY 2021

Market Update 02 With Clay Carter - Head of Macrovue’s Investment Committee

Macrovue Quarterly Earnings

MakeMyTrip (MMYT) PTC (PTC) MakeMyTrip’s Q3 FY2021 revenue was $56.8M, a 61.3% decrease Y/Y missing consensus PTC Q1 FY2021 revenue was $429M, up 20% Y/Y and beating consensus by $46.82M. by $3.9M. Non-GAAP EPS was $0.07 beating by $0.13 while GAAP EPS was -$0.03 beating Q1 non-GAAP EPS was $0.97 beating by $0.31 and GAAP EPS was $0.20 missing by $0.14. by $0.16. Annual recurring revenue (ARR) was $1.34B growing 16% Y/Y, reflecting strong performance The decrease in revenue was due to the impact of COVID-19, reducing travel demand due to in the Core and Growth businesses in the global channel. restrictions, affecting air ticketing, hotels and packages, bus ticketing and others. “Fiscal 2021 is off to a great start with double-digit top line growth and strong cash flow As of 31 December 2020, cash and cash equivalents and term deposits was $227.6M with generation in the first fiscal quarter. PTC’s results reflect strong demand across our product additional secured credit and guaranteed facilities of approximately $100M which remain portfolio as customers continue to power their digital transformation initiatives with PTC’s undrawn. market-leading solutions” said James Heppelmann, President and CEO.

“MakeMyTrip continues to stay focused on business revival led by gradual recovery in Due to the strong performance in Q1 and the acquisition of Arena Solutions, guidance is India’s domestic travel demand, although revival of international travel demand is likely being updated with ARR targeting $1,470M to $1,500M and revenue being $1,690M to to take much longer” said Deep Kalra, Group Executive Chairman. $1,730M. GAAP EPS is expected to be from $0.82 to $0.94. MakeMyTrip is held in Macrovue’s “India” thematic portfolio or “Vue”. PTC is held in Macrovue’s “Internet of Things” thematic portfolio or “Vue”.

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Market Update 02 With Clay Carter - Head of Macrovue’s Investment Committee

Macrovue Quarterly Earnings

Skyworks Solutions (SWKS) ST Microelectronics (STM) Skyworks Solutions Q1 FY2021 revenue was $1.51B, up 68.5% Y/Y and beating consensus STMicroelectronic’s Q4 FY2020 revenue was $3.24B, up 17.8% Y/Y and beating consensus by by $450M. Non-GAAP EPS was $3.36 beating by $1.27 while GAAP EPS was $3.05 beating $20M. Q4 GAAP EPS was $0.63 beating estimates by $0.07 with Personal Electronics, as well by $1.28. as continuous acceleration in demand especially of Automotive products and Microcontrollers GAAP Operating Margin was 37.8% while Non-GAAP Operating Margin was 41.2% the main contributing factors. “Skyworks delivered all-time record quarterly results, leveraging our expansive technology reach,” Gross margin was 38.8%, 30 basis points above mid-point guidance while operating margin said CEO Liam K. Griffin. “Demand for our proven solutions continues to accelerate across a was 20.3% and net income was $582M. growing set of customers and end markets, powering the world’s most impactful use cases, For the full year, net revenues were $10.2B, a 6.9% increase which was due to a faster than from 5G mobile platforms to IoT, wireless infrastructure, autonomous transport and expected, restart of demand during the second half. Gross margin was 37.1%, operating machine-to-machine installations.” margin was 12.9% and net income was $1.1 billion. Guidance for the second quarter of 2021 is targeting revenue of $1.125B to $1.175B with At the mid-point of the current quarter FY2021, business outlook is for net revenues of $2.93B, non-GAAP diluted earnings per share of $2.34 being the mid-point of the range. representing a 31.2% increase Y/Y with a gross margin of 38.5%. This represents a growth in revenue of 50% and non-GAAP diluted EPS of 75%. For the full year 2021, solid revenue growth is expected with outperformance in the markets A $2B stock repurchase program was approved, reflecting the board of directors’ they operate in. Smart mobility, power and energy management, the Internet of Things and confidence in the business model and the ability to sustain above-market growth and 5G are driving demand for semiconductor content and these trends have accelerated generate strong cash flows. during 2020. A dividend of $0.50 was declared, payable on 9 March 2021. STMicroelectronic’s is held in Macrovue’s “Internet of Things” thematic portfolio or “Vue”. Skyworks Solutions is held in Macrovue’s “5G Wireless Technology” thematic portfolio or “Vue”.

. WEEK COMMENCING 1 FEBRUARY 2021

Market Update 02 With Clay Carter - Head of Macrovue’s Investment Committee

Macrovue Quarterly Earnings

TE Connectivity (TEL) (TXN) TE Connectivity’s Q1 FY2021 revenue was $3.5B, up 10.4% Y/Y and beating estimates Texas Instruments Q4 FY2020 revenue was $4.08B, up 21.8% Y/Y and beating consensus by by $240M. Q1 non-GAAP EPS was $1.47 beating by $0.18 and GAAP EPS was $1.13 $470M. Q4 GAAP EPS was $1.80, beating by $0.47. missing by $0.03. Revenue was driven by strong demand in automotive, personal electronics and industrial Orders were approximately $4B, a 25% increase Y/Y. materials. In core businesses, Analog grew 25% and Embedded Processing grew 14% Y/Y. CEO Terrence Curtin stated “our Transportation segment continued to outperform the Richard Templeton the CEO stated that free cash flow for the year was $5.5B and 38% market due to content growth driven by electric vehicles, along with data connectivity and of revenue reflecting the quality of the product portfolio, as well as the efficiency of the autonomy trends. Our Communications segment also exhibited strength due to demand manufacturing strategy, including the benefit of 300-millimeter Analog production. in high-speed cloud applications and growth in the appliances market.” Texas Instrument’s first quarter outlook is for revenue to be in the range of $3.79Bb to

Guidance for the Q2 is approximately $3.5B in net sales reflecting an approximate 10% $4.11B and EPS to be in-between $1.44 and $1.66. increase on a reported basis and an increase of mid-single digits on an organic basis Y/Y. Texas Instruments is held in Macrovue’s “Internet of Things” thematic portfolio or “Vue”. Non-GAAP EPS is expected to be approximately $1.47, up 14% year over year. TE Connectivity is held in Macrovue’s “Car of the Future” thematic portfolio or “Vue”.

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Market Update 02 With Clay Carter - Head of Macrovue’s Investment Committee

Macrovue Quarterly Earnings

Xilinx (XLNX) Q3 FY2021 revenue was $803M, up +11.1% Y/Y beating consensus by $26.71M. Non-GAAP EPS was $0.78 beating by $0.06 while GAAP EPS of $0.69 beat by $0.01. Wired and Wireless Group (WWG) revenue increased 14% as 5G deployments ramped in multiple regions. Automotive, Broadcast & Consumer (ABC) revenue increased 27%, driven by record quarters in the Automotive and Broadcast end markets. Aerospace & Defense, Industrial and Test, Measurement & Emulation (AIT) revenue increased 7%. Data Center Group (DCG) revenue declined 45% compared to a record second quarter which benefited from trade-related order acceleration which was in-line with expectations.

As announced on 27 October, 2020, (AMD) intends to acquire Xilinx in an all-stock transaction valued at $35 billion. Due to this future guidance was not provided and Xilinx will suspend declaration and distribution of its quarterly dividend as well as its open market stock repurchase program as per the merger agreement. Xilinx is held in Macrovue’s “5G Wireless Technology” thematic portfolio or “Vue”. WEEK COMMENCING 1 FEBRUARY 2021

Market Update 02 With Clay Carter - Head of Macrovue’s Investment Committee

Another big earnings week coming up: Buckle up.

Macrovue stocks include Vertex, Amazon, Pfizer, Match, Exxon Mobil, BP, Alibaba, , PayPal, Merck

Source: Earnings and Whispers WEEK COMMENCING 1 FEBRUARY 2021

Market Update 02 With Clay Carter - Head of Macrovue’s Investment Committee

Meet the man behind Macrovue Vue’s Clay Carter, Head of Investment Committee

Clay Carter has over 30 years of experience within senior portfolio management roles across AMP, Legal and General Life of Australia, PM Capital, QBE Insurance and Perennial Investment Partners. He has developed alternative methods to traditional market analysis and portfolio management, was a key contributor to the Eureka Report, and regularly appears on CNBC Asia and Bloomberg TV. Clay is Macrovue’s Head of Investment Committee and is responsible for monitoring stocks daily to ensure optimal performance within each Vue. Clay Carter With Clay's expertise in the Global equity market we can bring you factual and insightful information that will help you continue to stay ahead of the game. WEEK COMMENCING 1 FEBRUARY 2021

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