Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>Our updated NAV valuation of SK Square suggests an implied price of 82,167 won per share, which represents a 46% upside from current levels.</li>
<li>For SK Shieldus and OneStore, we took the mid-points of the IPO price ranges and applied SK Square's post IPO ownership stakes, respectively. </li>
<li>SK Square's CEO Park Jung-Ho announced that the SK Group is interested in investing in Arm Holdings. SK Group is well positioned to participate in the investment of ARM Holdings. </li>
</ul>


Our updated NAV valuation of SK Square suggests an implied price of 82,167 won per share, which represents a 46% upside from current levels.
For SK Shieldus and OneStore, we took the mid-points of the IPO price ranges and applied SK Square's post IPO ownership stakes, respectively. 
SK Square's CEO Park Jung-Ho announced that the SK Group is interested in investing in Arm Holdings. SK Group is well positioned to participate in the investment of ARM Holdings. 


SK Square: NAV Post IPOs of SK Shieldus/OneStore and a Major Investment in ARM Holdings?

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>Shares are now up 1% in the quarter despite investment losses as 87% of assets are US$-linked</li>
<li>A recovery for Alibaba, reports of ARM monetization and the $2bn sale of its stake in Cruise has eased leverage concerns with LTV back to 22% and CDS prices falling</li>
<li>This report includes detail on Softbank dollar exposure, calculations for LTV on a quarterly and daily basis and updates to our usual NAV discount/VF performance tables</li>
</ul>


Shares are now up 1% in the quarter despite investment losses as 87% of assets are US$-linked
A recovery for Alibaba, reports of ARM monetization and the $2bn sale of its stake in Cruise has eased leverage concerns with LTV back to 22% and CDS prices falling
This report includes detail on Softbank dollar exposure, calculations for LTV on a quarterly and daily basis and updates to our usual NAV discount/VF performance tables


Softbank Group - A Strong Dollar Is Good News with 87% of Assets Overseas

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<ul>
<li>Softbank is apparently trying to garner a $50bn valuation for Arm at its IPO and secure $8bn in margin loans on the back of that.</li>
<li>We think that is a stretch though it is certainly not impossible that it would succeed. </li>
<li>However, in terms of real value we suspect Arm could be worth less than $10bn and articulate why below.</li>
</ul>


Softbank is apparently trying to garner a $50bn valuation for Arm at its IPO and secure $8bn in margin loans on the back of that.
We think that is a stretch though it is certainly not impossible that it would succeed. 
However, in terms of real value we suspect Arm could be worth less than $10bn and articulate why below.


Softbank – Why We Think Arm Is Worth Less Than $10bn

<ul>
<li>Renesas’ investor day today focused on providing more details on existing themes such as the progress of synergies from Dialog. </li>
<li>The strong overall growth outlook and progress offering integrated solutions was also emphasised. </li>
<li>However, what we found most interesting was some of their commentary on RISC-V developments.</li>
</ul>


Renesas’ investor day today focused on providing more details on existing themes such as the progress of synergies from Dialog. 
The strong overall growth outlook and progress offering integrated solutions was also emphasised. 
However, what we found most interesting was some of their commentary on RISC-V developments.


Renesas – Synergies Outperform and Some Potentially Bad News for Arm

<ul>
<li>
<a href="https://www.bloomberg.com/news/articles/2022-01-25/nvidia-is-said-to-quietly-prepare-to-abandon-takeover-of-arm" target="_blank" rel="noopener"> Bloomberg reported</a> overnight that Nvidia was moving to accept reality and give up on the Arm merger. </li>
<li>This was largely expected but does deprive Softbank of a source of cash to conduct its buyback. </li>
<li>It also highlights the overall negative environment for Softbank’s traditional business “strategy”.</li>
</ul>



 Bloomberg reported overnight that Nvidia was moving to accept reality and give up on the Arm merger. 
This was largely expected but does deprive Softbank of a source of cash to conduct its buyback. 
It also highlights the overall negative environment for Softbank’s traditional business “strategy”.


Softbank – NVIDIA’s Abandonment of Arm and the Search for Credibility

United Kingdom

ARM Holdings designs and licenses semiconductor intellectual property (IP), including central processing unit (CPU) cores, graphics processing units (GPUs), and system IP. Its energy-efficient chip designs are widely used in smartphones, IoT devices, automotive systems, and computing infrastructure. The company is headquartered in Cambridge, United Kingdom, and was founded in 1990.

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ARM Holdings (ARM US)

SK Square: NAV Post IPOs of SK Shieldus/OneStore and a Major Investment in ARM Holdings?

Our updated NAV valuation of SK Square suggests an implied price of 82,167 won per share, which represents a 46% upside from current levels.

Douglas Kim

Softbank Group - A Strong Dollar Is Good News with 87% of Assets Overseas

With 87% of assets dollar-linked, Softbank benefits from a strong dollar and the latter's recent move to six-year highs leaves SB up QTD. Leverage...

Kirk Boodry

Softbank – Why We Think Arm Is Worth Less Than $10bn

Softbank is apparently trying to garner a $50bn valuation for Arm and secure $8bn in margin loans on the back of that but in terms of real value we...

Mio Kato

Renesas – Synergies Outperform and Some Potentially Bad News for Arm

Renesas’ investor day today focused on providing more details on existing themes such as the progress of synergies from Dialog but what we found...

Mio Kato

Softbank – NVIDIA’s Abandonment of Arm and the Search for Credibility

Bloomberg reported overnight that Nvidia was moving to accept reality and give up on the Arm merger. This highlights the overall negative...

Mio Kato

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