Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

Delta Electronics Thailand  / Event-Driven

<ul>
<li>The <a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thai (DELTA TB)</a> / <a href="https://www.smartkarma.com/entities/delta-electronics-inc" target="_blank" data-smartkarma-citation="entities:12688:1" rel="noopener">Delta Electronics (2308 TT)</a> spread peaked earlier this year and has been trending lower for the last few months (but it is volatile!).</li>
<li>
<a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thai (DELTA TB)</a> dropped 20% on Friday following <a href="https://www.smartkarma.com/entities/delta-electronics-inc" target="_blank" data-smartkarma-citation="entities:12688:1" rel="noopener">Delta Electronics (2308 TT)</a>'s placement of 0.72% of shares outstanding. The stock last closed 12.7% below the placement price.</li>
<li>
<a href="https://www.smartkarma.com/entities/delta-electronics-inc" target="_blank" data-smartkarma-citation="entities:12688:1" rel="noopener">Delta Electronics (2308 TT)</a> still owns over 63% of <a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thai (DELTA TB)</a> and there could be more downside for the Thailand line over the near term.</li>
</ul>


The Delta Electronics Thai (DELTA TB) / Delta Electronics (2308 TT) spread peaked earlier this year and has been trending lower for the last few months (but it is volatile!).

Delta Electronics Thai (DELTA TB) dropped 20% on Friday following Delta Electronics (2308 TT)'s placement of 0.72% of shares outstanding. The stock last closed 12.7% below the placement price.

Delta Electronics (2308 TT) still owns over 63% of Delta Electronics Thai (DELTA TB) and there could be more downside for the Thailand line over the near term.


Delta Electronics (DELTA TB / 2308 TT): Placement Increases Float; Ends Tender Offer Hope?

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

Equity Bottom-Up

<ul>
<li>Delta Thailand shares crashed over 20% in one day after its Taiwan parent sold a stake in the company.</li>
<li>Given the small size of the stake sale, we believe the share sale by the parent represents an opportunistic sale to crystallize value from Delta Thailand's high share price.</li>
<li>We spoke with Delta Taiwan to update our model. Delta Taiwan continues to offer much better value than Delta Thailand, earning more than double Thailand's net profit with similar growth.</li>
</ul>


Delta Thailand shares crashed over 20% in one day after its Taiwan parent sold a stake in the company.
Given the small size of the stake sale, we believe the share sale by the parent represents an opportunistic sale to crystallize value from Delta Thailand's high share price.
We spoke with Delta Taiwan to update our model. Delta Taiwan continues to offer much better value than Delta Thailand, earning more than double Thailand's net profit with similar growth.


Delta Taiwan Vs. Thailand Monitor: Delta Thai Crashes After Parent Share Sale; Still Overvalued

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

<ul>
<li>Delta Electronics and Wiwynn Corp among 6 Taiwan stocks at their highest levels of fund ownership among active Emerging Market funds.</li>
<li>The combined weight in these 6 stocks has aggressively moved higher to 1.2% from less than 30bps in 2018.</li>
<li>All stocks enter the top 15 most widely held companies in Taiwan, but potential for further buying is clearly there.</li>
</ul>


Delta Electronics and Wiwynn Corp among 6 Taiwan stocks at their highest levels of fund ownership among active Emerging Market funds.
The combined weight in these 6 stocks has aggressively moved higher to 1.2% from less than 30bps in 2018.
All stocks enter the top 15 most widely held companies in Taiwan, but potential for further buying is clearly there.


Record Fund Ownership in Six Taiwanese Companies

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>Wave of earnings this week -- AMD, Qualcomm, Apple internationally... and Delta, Advantech, Innolux, Winbond, Realtek, plus others in Taiwan.</li>
<li>We visited Micron’s A3 fab in Taiwan; SK Hynix gives strongest comments yet on Memory turn-around; Long Nanya Tech on DRAM turn-around.</li>
<li>Intel results readthrough: PC cycle improving and could be accelerated by AI-demand... We continue to see Elan Micro as a laggard play on rallying PC names.</li>
</ul>


Wave of earnings this week -- AMD, Qualcomm, Apple internationally... and Delta, Advantech, Innolux, Winbond, Realtek, plus others in Taiwan.
We visited Micron’s A3 fab in Taiwan; SK Hynix gives strongest comments yet on Memory turn-around; Long Nanya Tech on DRAM turn-around.
Intel results readthrough: PC cycle improving and could be accelerated by AI-demand... We continue to see Elan Micro as a laggard play on rallying PC names.


Taiwan Tech Weekly: Wave of Taiwan Earnings Plus AMD & Apple; AI Accelerating DRAM & PC Recovery

Delta Electronics Thailand  / Equity Bottom-Up

<ul>
<li>Delta Thailand has surged 22% in NT$ terms since our last piece, while Delta Taiwan rose only 6%. We see two potential trades here.</li>
<li>Delta Thailand reported its results on 27 July and beat expectations by 22%. Delta Taiwan will release its results on August 1st with its analyst call at 15:00 Taiwan time.</li>
<li>1) Potential Long Delta Taiwan event trade into Taiwan earnings 2) Long Delta Taiwan vs. Short Delta Thailand based on the relative prices reverting back to their end June ratio.</li>
</ul>


Delta Thailand has surged 22% in NT$ terms since our last piece, while Delta Taiwan rose only 6%. We see two potential trades here.
Delta Thailand reported its results on 27 July and beat expectations by 22%. Delta Taiwan will release its results on August 1st with its analyst call at 15:00 Taiwan time.
1) Potential Long Delta Taiwan event trade into Taiwan earnings 2) Long Delta Taiwan vs. Short Delta Thailand based on the relative prices reverting back to their end June ratio.


Delta Taiwan Vs. Thailand Monitor: Short Term Trade This Week on Delta Earnings; Or Pair Long/Short

Taiwan

Delta Electronics Inc. manufactures power supplies and video display products. The Company's products include switching power supplies, telecom power systems, uninterrupted power supply (UPS), variable speed alternating current (AC) monitor drives, high resolution color monitors, and projectors.  Delta also manufactures magnetic and networking components.

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Delta Electronics (2308 TT)

Delta Electronics (DELTA TB / 2308 TT): Placement Increases Float; Ends Tender Offer Hope?

Delta Electronics Thai dropped 20% on Friday after Delta Electronics placed shares, and there could be more downside for the Thailand line. The...

Brian Freitas

Record Fund Ownership in Six Taiwanese Companies

Delta Electronics and Wiwynn Corp among 6 Taiwan stocks at their highest levels of fund ownership among active Emerging Market funds.

Steven Holden

Taiwan Tech Weekly: Wave of Taiwan Earnings Plus AMD & Apple; AI Accelerating DRAM & PC Recovery

Wave of Taiwan earnings this week with Delta, Advantech, Innolux, Winbond, Realtek, Elan, ChipMOS plus others in Taiwan. Also -- We visited...

Vincent Fernando, CFA

Delta Taiwan Vs. Thailand Monitor: Short Term Trade This Week on Delta Earnings; Or Pair Long/Short

1) Long Delta Taiwan event trade into Delta Taiwan earnings or 2) Long Delta Taiwan vs. Short Delta Thailand based on the relative prices reverting...

Vincent Fernando, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Delta Electronics (DELTA TB / 2308 TT): Placement Increases Float; Ends Tender Offer Hope?

​Delta Electronics Thai dropped 20% on Friday after Delta Electronics placed shares, and there could be more downside for the Thailand line. The...

Brian Freitas

Delta Taiwan Vs. Thailand Monitor: Delta Thai Crashes After Parent Share Sale; Still Overvalued

We spoke with Delta Taiwan to update our model. Delta Taiwan continues to offer much better value than Delta Thailand, earning more than double...

Vincent Fernando, CFA

Record Fund Ownership in Six Taiwanese Companies

Delta Electronics and Wiwynn Corp among 6 Taiwan stocks at their highest levels of fund ownership among active Emerging Market funds.

Steven Holden

Taiwan Tech Weekly: Wave of Taiwan Earnings Plus AMD & Apple; AI Accelerating DRAM & PC Recovery

Wave of Taiwan earnings this week with Delta, Advantech, Innolux, Winbond, Realtek, Elan, ChipMOS plus others in Taiwan. Also -- We visited...

Vincent Fernando, CFA

Delta Taiwan Vs. Thailand Monitor: Short Term Trade This Week on Delta Earnings; Or Pair Long/Short

1) Long Delta Taiwan event trade into Delta Taiwan earnings or 2) Long Delta Taiwan vs. Short Delta Thailand based on the relative prices reverting...

Vincent Fernando, CFA

Delta Electronics Thai dropped 20% on Friday after Delta Electronics placed shares, and there could be more downside for the Thailand line. The...