May was a V-shaped month: steep fall in the first half and healthy bounce in the second. Deshima US growth stocks suffered despite their strong earnings announcements and bullish guidance.

Airbnb managed to raise revenues in the first quarter despite heavy lockdowns across Northern America outperforming its competitor Booking.com who suffered during the same period. Airbnb resilience in tough times is paving the way for a strong recovery. Their focus on homeowners and a very dynamic approach to services and house presentation is impressive. A continuing fragile health outlook is supporting holiday makers to book longer stay and to avoid traditional travel hospitality such as hotels or cruses. Square was another spectacular earning beater coming 50% ahead of market expectations on revenues. Square is launching new promising higher margin services such as saving accounts. Interestingly, Square is not only a digital platform. Square POS hardware that helps small shops to centralise payment, logistic and administration services are set to benefit from reopening. 

May offered little respite for Chinese technology names such as Baidu or Kingsoft Cloud. However, healthcare related stories such as Wuxi Biologics bounced back. We came back into Alibaba sold in late 2020 due to strong earnings and outlook and very attractive valuation made possible by political bashing. 

Semiconductor and Semiconductor Manufacturing Equipment hit by profit-taking in April stabilised in May supported by steady earnings and increased testimonies of a prolonged semi-conductor shortage that is spreading out from the auto industry into consumer electronics, cellular phones, and IT. 

Sea Ltd. Came with very strong top-line numbers and very strong metrics on the Sea Payment division. The upcoming IPO of Toko a strong regional competitor should bring more attention on Sea ltd. Management proved very muted on their new retail venture in Brazil and Mexico. We see it as providing a positive upside in the future as market studies suggest Sea Ltd. are already catching up with local established leaders such as Mercadolibre. 

There is a healthy momentum of new and cheaper products and technologies surrounding EV, and AV. Panasonic seems to have a good exposure to solid state batteries with a very promising JV with Toyota. Biotechnology is another area we are following closely with our CDMO exposure through Wuxi and Fujifilm on the one hand and biotechnology innovative platforms such as Twist or CMLF on the other.

We have little value-added on market volatility created by macro factors such as interest rates or future inflation but, following a detailed study of Q1 earnings, we are highly confident at the micro-level on our holdings.