Author Archives: Chris Versace, Chief Investment Officer

About Chris Versace, Chief Investment Officer

I'm the Chief Investment Officer of Tematica Research and editor of Tematica Investing newsletter. All of that capitalizes on my near 20 years in the investment industry, nearly all of it breaking down industries and recommending stocks. In that time, I've been ranked an All Star Analyst by Zacks Investment Research and my efforts in analyzing industries, companies and equities have been recognized by both Institutional Investor and Thomson Reuters’ StarMine Monitor. In my travels, I've covered cyclicals, tech and more, which gives me a different vantage point, one that uses not only an ecosystem or food chain perspective, but one that also examines demographics, economics, psychographics and more when formulating my investment views. The question I most often get is "Are you related to…."
KPMG survey: More than half of US car sales will be EVs by 2030

KPMG survey: More than half of US car sales will be EVs by 2030

While we at Tematica tend not to focus on the precise figures for forecasts that span more than a year or two out, the direction of EV adoption and therefore the need for additional EV charging stations per KPMG’s findings serves as a solid multi-year confirmation point for the Cleaner Transportation aspect our Cleaner Living investment theme and the Cleaner Living index.

Automotive executives think more than half of their sales will be electric vehicles by 2030, in line with President Joe Biden’s EV sales goal, according to a new survey released Tuesday by accounting and consulting firm KPMG.

While estimates varied widely from more than 20% to about 90%, the survey on average that executives expect 52% of new vehicle sales to be all-electric by 2030. The same amount is expected for Japan and China, according to the survey which polls more than 1,100 global automotive executives.

Seventy-three percent of respondents expect that EVs will reach cost parity with internal combustion engines by 2030.

While 77% believe EVs can be widely adopted without government subsidies, 91% said they still support such programs.

Access to charging stations, specifically rapid charging stations for longer travels, remains a hurdle to EV adoption for many consumers. KPMG found 77% of executives expect consumers to require quick charge times of under 30 minutes when traveling. In the U.S., less than 20% of existing public EV chargers are fast chargers, and many of them can’t charge a vehicle to 80% in 30 minutes or less, according to KPMG.

Source: Auto executives say more than half of U.S. car sales will be EVs by 2030, KPMG survey shows

Improving sustainable packaging one dairy jug at a time 

Improving sustainable packaging one dairy jug at a time 

California’s Clover Sonoma, a family-owned, third-generation, Certified B Corporation business was the first dairy in the United States to receive the American Humane Certified seal some 21 years ago. Now it’s the first dairy to offer a post-consumer recycled (PCR) gallon milk jug with plans to increase the PCR as part of its sustainable packaging efforts. And Marcus Benedetti’s comment that consumers want to reward companies that do the right things touches on one of the psychographic aspects behind Tematica’s Cleaner Living investment theme and indices.

“It’s not enough to be organic,” said Marcus Benedetti, chairman and chief executive officer of Clover Sonoma, to Ms. Nierenberg during a Food Tank webinar on Nov. 18. “When you elevate everything you do and touch, and pass that onto consumers, you connect with them. Consumers want to reward companies that do the right things.”

Mr. Benedetti explained Clover Sonoma’s passion is to elevate dairy to keep it a viable business. This strategy includes investing in sustainable packaging to help address climate change.   Starting with 30% PCR content in its organic gallon milk line, the company has committed to increasing the PCR content and extending PCR content use across all Clover Sonoma gallon milk jugs by 2025. Using PCR content in plastic packaging creates a closed loop system for recycling plastic gallon milk jugs and ensures plastic is neither created nor destroyed but re-used.

Source: Clover Sonoma fighting climate change one jug at a time | Food Business News

Carriers bring mobile money to Vietnam’s underbanked

Carriers bring mobile money to Vietnam’s underbanked

According to data published by the World Bank, Vietnam’s population is ~98.5 million people. However, the country boasts around 125 million mobile subscribers but according to reports only 64% of the country’s adult population has bank accounts. It should come then as little surprise giving the rising global penetration in digital payments that mobile carriers in Vietnam.

 

This month has seen two mobile operators in Vietnam launch trials of mobile money services for the first time, having been awarded licences to do so from the State Bank.

The pilot programme will allow Vinaphone (VNPT) and MobiFone mobile customers to use their mobile subscription as a bank account, capable of paying for goods and services as well as depositing, withdrawing, and transferring money. MobiFone was the first operator in the country to acquire a licence on November 18.

The announcement follows Prime Minister Nguyen Xuan Phuc’s decision back in March to allow telecoms operators and e-wallet providers to apply for two-year licences to trial mobile money services.

In the first phase, the operator’s customers would be able to use their mobile money services at around 600 transaction points around the country, with MobiFone saying they would increase this number to over 10,000 in future through various partnerships.

VNPT already owns a business network of over 10,000 transaction points and has a further network of 200,000 associated business locations in 63 provinces and cities, giving it a nationwide scope.

Source: Mobile money coming to Vietnam | total telecom

Consumer preference favors data security

Consumer preference favors data security

According to The Passwordless Future, a PYMNTS and Entersekt collaboration that examined responses from more than 2,500 U.S. consumers, consumers’ perception of security measures enhances their trust in their financial institutions (FIs). Those same findings suggest consumers are ready to embrace some other form of authentication other than the use of a password. Seems we’re not the only ones that are tired of having to remember all those different passwords…

Sixty-five percent of consumers said an emphasis on data security had an “extremely or very big impact” on their trust in an institution.

Sixty percent said the same about information on how transactions are secured, and 56% said it about having a detailed data protection and privacy statement.

PYMNTS found that consumers rated consistent experiences across all platforms to be nearly as important as a sense of data security when influencing their trust in their FIs.

Even though it’s still the most common authentication method, 45% of consumers would be comfortable with login methods that didn’t require a password. In addition, 47% agreed that a password will no longer be used, and 61% would be comfortable with login methods other than a password.

Source: Login Methods Other Than a Password | PYMNTS.com

Coty’s cleaner and greener beauty product strategy

Coty’s cleaner and greener beauty product strategy

Beauty company Coty Inc. (COTY) has released its 2021 Sustainability Report in which it shares its progress in advancing the company’s dedicated sustainability strategy dubbed “Beauty That Lasts.” Launched in 2020, Coty’s Beauty That Lasts efforts are organized into three pillars that aim to enhance: ‘The Beauty of our Products’, ‘The Beauty of our Planet’, and ‘The Beauty of our People’ that focus on cleaner and greener products.

 

We have developed products that are cleaner and greener, paving the way towards significant environmental impact reduction, and became a more equitable and desirable place to work,” said Coty CEO Sue Y. Nabi.

Across the three pillars, Coty’s FY21 sustainability highlights included:

The Beauty of Our Products – Meeting Coty’s commitment to incorporate sustainability criteria into the development of all new products through the application of Coty’s Beauty That Lasts Index, a qualitative tool for evaluating the social and environmental profile of new products

Leveraging the best that nature and science have to offer through green science to ensure Coty is at the forefront of sustainable innovation

Building on CoverGirl’s heritage, Coty has developed an internal clean list that goes beyond regulatory requirements.

Clean beauty efforts at Coty are underpinned by specific reformulation roadmaps for each product categoryImplementing a new Responsible Sourcing

Source: Coty Shares 2021 Sustainability Report – Beauty Packaging

Breaking down Biden’s infrastructure bill and broadband

Breaking down Biden’s infrastructure bill and broadband

According to data published by Microsoft, more than 120 million people in the United States lack access to the internet at broadband-defined speeds but President Biden’s infrastructure package is looking to address that. Let’s take a look at how the $65 billion ear-marked for broadband breaks out:

 

President Joe Biden’s trillion-dollar infrastructure bill promises the largest public investment in telecommunications in the country’s history. Of the $65 billion allocated for high-speed internet—broadband—$42.45 billion is earmarked specifically for deployment projects through state grants. Now that the legislation has been passed and signed into law by Biden, all hopes for broadband connectivity now turn to the National Telecommunications and Information Administration, which has 180 days to write the rules governing the Broadband Equity, Access, and Deployment Program. Then, states will administer the grants.

Source: How the Infrastructure Bill Can Make Broadband Accessible to More Americans | Washington Monthly

Another significant slice, $14.2 billion, will go to the Federal Communications Commission to establish an Affordable Connectivity Program, an extension and revision of the Emergency Broadband Benefit that provides $30 monthly broadband subsidies for eligible households.

The rest of the package: $2.75 billion for a Digital Equity Program to ensure that “individuals and communities have the information technology capacity that is needed for full participation in the society and economy of the United States”; $2 billion for RUS ReConnect; $2 billion for the Tribal Broadband Program; $1 billion for a new middle-mile program overseen by NTIA; and $600 million for Private Activity Bonds for broadband deployments. The infrastructure bill also highlights funding for WiFi networks in apartment buildings.

Source: How the Infrastructure Bill Can Make Broadband Accessible to More Americans | Washington Monthly

Remembering to update one’s antivirus software

Remembering to update one’s antivirus software

A great reminder that whether your an individual or a larger organization, alongside your Microsoft Office, Apple O/S and other updates, your antivirus software needs to be updated as well.

 

Every year there are billions of malware attacks worldwide. And these threats are constantly evolving. So if you are not currently using antivirus software, or you still rely on some free software you downloaded back in 2017, you are putting your cybersecurity in serious jeopardy.

 

When we talk about antivirus products, we’re really talking about anti-malware products. Malware is a catchall term that refers to any malicious program created to damage, disrupt, or take charge of a computer. Types of malware include not only viruses but spyware, trojan horses, ransomware, adware, and scareware.

Any good antivirus product in 2021 must be able to detect and remove all forms of malware on your computer or server. Meanwhile, additional features to look for include identity monitoring and alerts, financial loss or identity theft insurance, and some form of browsing protection, such as a VPN, malicious URL blocking, website rating, and phishing protection.

Source: If You’re Not Using Antivirus Software, You’re Not Paying Attention

Corporate web security market to grow by more than 70% through 2025

Corporate web security market to grow by more than 70% through 2025

As has been said, a picture is worth something like 1,000 words but in our case we like the direction of this picture and what it means for cybersecurity spending over the coming years.

In 2021, the corporate web security market that includes appliance, software, and cloud-based services that protect users from malware, is estimated to reach $4.6 billion growing to ~$8 billion by 2025. Further, solutions from this segment help prevent data loss and help organizations monitor employee activities on the Internet.

Source: • Corporate web security market worldwide 2025 | Statista

Mobile payments in India surpass credit cards in 2021

Mobile payments in India surpass credit cards in 2021

Another example of when disruptive innovation allows for leapfrogging existing business models. We’ve seen this countless times before, particularly in emerging economies, and in the case of digital payments it explains why Mastercard (MA) and Visa (V) are looking to expand the scope of their payment processing networks.

 

Mobile payments in India are now growing faster than card payments as more consumers and businesses adopt digital payments amidst the pandemic, said the 2021 India Mobile Payments Market Report.

According to the report, payments made via apps that bypass credit cards rose 67 per cent to $478 billion in 2020. They are clocking more than $1 trillion in annualised value in 2021.“…we expect mobile payments to continue to grow faster than cards due to a growing consumer preference to use smartphones to pay,” said the report published by S&P Global Market Intelligence’s Financial Institutions Research team.By comparison, credit card transaction value in the industry dropped by 14 per cent in fiscal 2021.

Source: Mobile payments surpass credit cards in 2021: Report – The Hindu BusinessLine

Thematic Reads: November 22, 2021

Thematic Reads: November 22, 2021

Thematic Reads

Each week Team Tematica consumes an immense quantity and range of content as we look to stay on top of the latest data and mine it for tailwind and headwind signals for our investment themes and indices.

Cleaner Living
Growing demand for items that claim to be better for you and the planet:

We know that clean beauty is a key driver of the beauty industry growth around the world. In fact, a third of all beauty launches in the US and a quarter of beauty launches in Europe included clean, vegan and natural claims last year. And the proportion is only growing. At Coty, we are leading the industry in the introduction of clean, vegan and crueltyfree products, as well as working on ways to make our packaging more sustainable. At Coty, we aim to be a leader in clean makeup, in clean skin care, in clean body care and clean fragrances.”
Coty Inc. (COTY) CEO Sue Y. Nabi, Coty 2021 Investor Day

The global health food market is expected to reach $557.6 billion in 2024, increasing at a CAGR of 7.15% over the 2020-2024 period. The fastest regional market is the U.S., owing to the growth in health-conscious population as well as growing people’s awareness about the health benefits of a nutritional and balanced diet.
Research and Markets, Global Health Food Market Report 2020-2024

“The growing preference for food and beverage ingredients perceived as somehow “clean” is a global phenomenon, says Dave Lundahl, founder and CEO of the behavioral research firm InsightsNow, which has been tracking this consumer segment extensively for the past four years. “These are consumers with heightened concerns about ingredients—they will not buy products that have certain ingredients in them,” he says. “They will go right to the back of the package and look to see what’s in a product.” Euromonitor International projected global sales of clean label food products would hit $180 billion in 2020, while worldwide sales of clean label ingredients like natural colors and flavors, starch and sweeteners, fruit and vegetable ingredients, flours, and others will jump from $38.8 billion in 2021 to $64.1 billion in 2026 at a compound annual growth rate of 6.8%, predicts Market Data Forecast.
The Changing Face of Clean Label

Cyber Security & Data Privacy
Securing individuals and organizations against cyber threats and privacy violations:

“Cloudflare automatically detected and mitigated a DDoS attack that peaked just below 2 Tbps — the largest we’ve seen to date. This was a multi-vector attack combining DNS amplification attacks and UDP floods. The entire attack lasted just one minute. The attack was launched from approximately 15,000 bots running a variant of the original Mirai code on IoT devices and unpatched GitLab instances.
Cloudflare blocks an almost 2 Tbps multi-vector DDoS attack

The South Korean Ministry of Justice has provided more than 100 million photos of foreign nationals who travelled through the country’s airports to facial recognition companies without their consent, according to attorneys with the non-governmental organization Lawyers for a Democratic Society.”
South Korea Is Giving Millions of Photos to Facial Recognition Researchers

“Wind turbine maker Vestas (VWS.CO) on Monday said the cyber attack it reported at the weekend has affected parts of its internal IT infrastructure and that data has been “compromised”. The incident, the financial implications of which are as yet unclear, comes as Vestas juggles record demand for green power against supply constraints and high raw material costs that are pressuring profit margins.
Vestas data ‘compromised’ by cyber attack

Digital Infrastructure & Connectivity
The Buildout and upgrading of our Networks, Data Storage Facilities, and Equipment:

Qualcomm (QCOM) sees more than 750 million 5G handset shipments in 2022, up from ~525 million in 2021, with more than 950 million in 2023 and over 1.1 billion 5G handsets shipped in 2023, roughly 85% of the handset market. The company also sees the IoT market reaching $67 billion in 2024, up from $42 billion in 2021 driven by XR/metaverse devices, edge networking and industrial applications.
Qualcomm (QCOM) CFO Akash Palkhiwala at Qualcomm’s 2021 Investor Day

Thus far, 185 5G networks have been launched compared to 693 4G LTE networks.
5G Americas

The US data center construction market was valued at $7.24 billion in 2020, and it is expected to achieve a value of $14.17 billion by 2026, registering a CAGR of 11.64% over the forecast period.
Mordor Intellilgence

– In 2021, worldwide 5G network infrastructure revenue is expected to reach 19.13 billion U.S. dollars. In 2022, this is set to grow further to 23.25 billion U.S. dollars set to be generated globally from 5G network infrastructure.
Statista

Digital Payments & FinTech
Companies leveraging technology to disrupt and improve the financial services and payments industries:

“Daimler AG, the parent company of Mercedes-Benz, partnered with Visa to enhance payment authentication and security for its in-car payments solution, Mercedes pay, per Digital Transactions… Visa will bring its Cloud Token Framework—which guards sensitive payment information with encrypted tokens and improves two-factor transaction authentication—to Daimler Mobility, the company’s unit specializing in financial products… In-car payments are gaining steam as more connected cars hit the road—the number of connected cars is expected to top 352 million globally by 2023, according to Capgemini.”
Visa enhances Daimler AG’s in-car payment security and authentication

Tematica Research Indices