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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/geely-automobile-holdings-ltd" target="_blank" data-smartkarma-citation="entities:127:1" rel="noopener">Geely Auto (175 HK)</a>, <a href="https://www.smartkarma.com/entities/ganfeng-lithium-co-ltd" target="_blank" data-smartkarma-citation="entities:26795:1" rel="noopener">Ganfeng Lithium (1772 HK)</a>, <a href="https://www.smartkarma.com/entities/pharmaron-beijing-co-ltd" target="_blank" data-smartkarma-citation="entities:28428:1" rel="noopener">Pharmaron Beijing Co Ltd-H (3759 HK)</a>, <a href="https://www.smartkarma.com/entities/sunny-optical-tech" target="_blank" data-smartkarma-citation="entities:13363:1" rel="noopener">Sunny Optical (2382 HK)</a> and <a href="https://www.smartkarma.com/entities/china-evergrande-group" target="_blank" data-smartkarma-citation="entities:479:1" rel="noopener">Evergrande Real Estate Group (3333 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/ck-asset-holdings-ltd" target="_blank" data-smartkarma-citation="entities:22650:1" rel="noopener">CK Asset Holdings (1113 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a> and <a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a>. Shorts increased in the Consumer Discretionary sector, while decreasing in the Communication Services, Real Estate, Financials and Industrials sectors.</p></div><div><p>In Japan, stocks increased on <a href="https://www.smartkarma.com/entities/fujitsu-ltd" target="_blank" data-smartkarma-citation="entities:16968:1" rel="noopener">Fujitsu Ltd (6702 JP)</a>, <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon Inc (7751 JP)</a>, <a href="https://www.smartkarma.com/entities/renesas-electronics-corp" target="_blank" data-smartkarma-citation="entities:15933:1" rel="noopener">Renesas Electronics (6723 JP)</a>, <a href="https://www.smartkarma.com/entities/brother-industries-ltd" target="_blank" data-smartkarma-citation="entities:6114:1" rel="noopener">Brother Industries (6448 JP)</a> and <a href="https://www.smartkarma.com/entities/casio-computer-co-ltd" target="_blank" data-smartkarma-citation="entities:18338:1" rel="noopener">Casio Computer (6952 JP)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/sumco-corp" target="_blank" data-smartkarma-citation="entities:379:1" rel="noopener">SUMCO Corp (3436 JP)</a>, <a href="https://www.smartkarma.com/entities/seiko-epson-corp" target="_blank" data-smartkarma-citation="entities:16793:1" rel="noopener">Seiko Epson (6724 JP)</a>, <a href="https://www.smartkarma.com/entities/symbio-pharmaceuticals-ltd" target="_blank" data-smartkarma-citation="entities:10456:1" rel="noopener">Symbio Pharmaceuticals (4582 JP)</a> and <a href="https://www.smartkarma.com/entities/ebara-corp" target="_blank" data-smartkarma-citation="entities:4728:1" rel="noopener">Ebara Corp (6361 JP)</a>. Shorts increased on Information Technology and Consumer Discretionary stock, while reducing on Industrials and Health Care names.</p></div><div><p>In Korea, shorts increased on <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-display-co-ltd" target="_blank" data-smartkarma-citation="entities:7145:1" rel="noopener">LG Display (034220 KS)</a>, <a href="https://www.smartkarma.com/entities/hmm-co-ltd" target="_blank" data-smartkarma-citation="entities:13494:1" rel="noopener">HMM Co., Ltd. (011200 KS)</a>, <a href="https://www.smartkarma.com/entities/mando-corp" target="_blank" data-smartkarma-citation="entities:8119:1" rel="noopener">Mando Corp (204320 KS)</a> and <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/doosan-heavy-industries-construction" target="_blank" data-smartkarma-citation="entities:7389:1" rel="noopener">Doosan Heavy Industries &amp; Construction (034020 KS)</a>, <a href="https://www.smartkarma.com/entities/kakao-corp" target="_blank" data-smartkarma-citation="entities:15002:1" rel="noopener">Kakao Corp (035720 KS)</a>, <a href="https://www.smartkarma.com/entities/pan-ocean-co-ltd" target="_blank" data-smartkarma-citation="entities:5279:1" rel="noopener">Pan Ocean (028670 KS)</a>, <a href="https://www.smartkarma.com/entities/ncsoft-corp" target="_blank" data-smartkarma-citation="entities:5169:1" rel="noopener">NCSOFT Corp (036570 KS)</a> and <a href="https://www.smartkarma.com/entities/samsung-sdi-co-ltd" target="_blank" data-smartkarma-citation="entities:503:1" rel="noopener">Samsung SDI (006400 KS)</a>.</p></div><div><p>In Taiwan, shorts increased on <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/yang-ming-marine-transport" target="_blank" data-smartkarma-citation="entities:8502:1" rel="noopener">Yang Ming Marine Transport (2609 TT)</a>, <a href="https://www.smartkarma.com/entities/wan-hai-lines-ltd" target="_blank" data-smartkarma-citation="entities:14262:1" rel="noopener">Wan Hai Lines (2615 TT)</a>, <a href="https://www.smartkarma.com/entities/innolux-corp" target="_blank" data-smartkarma-citation="entities:4509:1" rel="noopener">Innolux Corp (3481 TT)</a> and <a href="https://www.smartkarma.com/entities/evergreen-marine-corp-ltd" target="_blank" data-smartkarma-citation="entities:15428:1" rel="noopener">Evergreen Marine Corp (2603 TT)</a> while shorts covered on <a href="https://www.smartkarma.com/entities/au-optronics-corp" target="_blank" data-smartkarma-citation="entities:6704:1" rel="noopener">AU Optronics (2409 TT)</a>, <a href="https://www.smartkarma.com/entities/united-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:6450:1" rel="noopener">United Microelectronics Corp (2303 TT)</a>, <a href="https://www.smartkarma.com/entities/hsin-kuang-steel-co-ltd" target="_blank" data-smartkarma-citation="entities:19760:1" rel="noopener">Hsin Kuang Steel (2031 TT)</a>, <a href="https://www.smartkarma.com/entities/genius-electronic-optical-co-ltd" target="_blank" data-smartkarma-citation="entities:9632:1" rel="noopener">Genius Electronic Optical (3406 TT)</a> and <a href="https://www.smartkarma.com/entities/china-airlines-ltd" target="_blank" data-smartkarma-citation="entities:4591:1" rel="noopener">China Airlines (2610 TT)</a>.</p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Geely Auto (175 HK), Ganfeng Lithium (1772 HK), Pharmaron Beijing Co Ltd-H (3759 HK), Sunny Optical (2382 HK) and Evergrande Real Estate Group (3333 HK) while there was short covering on Alibaba Group (9988 HK), CK Asset Holdings (1113 HK), Tencent (700 HK), Ping An Insurance (H) (2318 HK) and NetEase (9999 HK). Shorts increased in the Consumer Discretionary sector, while decreasing in the Communication Services, Real Estate, Financials and Industrials sectors.In Japan, stocks increased on Fujitsu Ltd (6702 JP), Canon Inc (7751 JP), Renesas Electronics (6723 JP), Brother Industries (6448 JP) and Casio Computer (6952 JP) while there was short covering on Toshiba Corp (6502 JP), SUMCO Corp (3436 JP), Seiko Epson (6724 JP), Symbio Pharmaceuticals (4582 JP) and Ebara Corp (6361 JP). Shorts increased on Information Technology and Consumer Discretionary stock, while reducing on Industrials and Health Care names.In Korea, shorts increased on Samsung Electronics (005930 KS), LG Display (034220 KS), HMM Co., Ltd. (011200 KS), Mando Corp (204320 KS) and SK Hynix (000660 KS) while shorts were covered on Doosan Heavy Industries &amp; Construction (034020 KS), Kakao Corp (035720 KS), Pan Ocean (028670 KS), NCSOFT Corp (036570 KS) and Samsung SDI (006400 KS).In Taiwan, shorts increased on TSMC (2330 TT), Yang Ming Marine Transport (2609 TT), Wan Hai Lines (2615 TT), Innolux Corp (3481 TT) and Evergreen Marine Corp (2603 TT) while shorts covered on AU Optronics (2409 TT), United Microelectronics Corp (2303 TT), Hsin Kuang Steel (2031 TT), Genius Electronic Optical (3406 TT) and China Airlines (2610 TT).

Asia Shorts: Geely, Ganfeng, Pharmaron, Evergrande, Fujitsu, Canon, Renesas, Toshiba, LGD, Doosan

Senior Technology Analyst, Japanese Equities, LightStream Research

Scott Foster

Senior Technology Analyst, Japanese Equities

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 Bottom-Up

<p>Fujitsu hit a new high of ¥17,680 on April 30 and at the May 7 close of ¥16,760 was still up 68% from its 52-week low.</p><p>FY Mar-21 results (OP up 26% on a 7% decline in revenues) and apparently reasonable valuations (16x EPS guidance for FY Mar-22 and 2.3x book value) have helped support the share price.</p><p>But the news out of the UK is not good.</p><p>Regarding the Post Office scandal caused by the flawed Horizon computer system supplied by Fujitsu, which UK Prime Minister Boris Johnson called the <em>"one of the biggest miscarriages of justice in our history", </em>the BBC reports that:</p><p><em>"So far, nobody at the Post Office or Fujitsu has been held accountable, although the High Court judge said he would refer Fujitsu to the Director of Public Prosecutions for possible further action because he had 'grave concerns' about the evidence of the company's employees." </em></p><p><em>"Asked if other parties - such as the Horizon's developers, Fujitsu - should be held accountable, Ms Page [Barrister representing the aggrieved parties] added: 'I think there will be malicious prosecution claims.... hundreds and hundreds of them.'"</em></p><p>The investigation and legal proceedings seem likely to continue for months if not longer. Fujitsu's reputation and a considerable amount of money are at issue.</p>

Fujitsu hit a new high of ¥17,680 on April 30 and at the May 7 close of ¥16,760 was still up 68% from its 52-week low.FY Mar-21 results (OP up 26% on a 7% decline in revenues) and apparently reasonable valuations (16x EPS guidance for FY Mar-22 and 2.3x book value) have helped support the share price.But the news out of the UK is not good.Regarding the Post Office scandal caused by the flawed Horizon computer system supplied by Fujitsu, which UK Prime Minister Boris Johnson called the "one of the biggest miscarriages of justice in our history", the BBC reports that:"So far, nobody at the Post Office or Fujitsu has been held accountable, although the High Court judge said he would refer Fujitsu to the Director of Public Prosecutions for possible further action because he had 'grave concerns' about the evidence of the company's employees." "Asked if other parties - such as the Horizon's developers, Fujitsu - should be held accountable, Ms Page [Barrister representing the aggrieved parties] added: 'I think there will be malicious prosecution claims.... hundreds and hundreds of them.'"The investigation and legal proceedings seem likely to continue for months if not longer. Fujitsu's reputation and a considerable amount of money are at issue.

Fujitsu (6702 JP): Reputation at Risk in UK Post Office Scandal

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Event-Driven

<p>The Nikkei reported today that Bain Capital’s bidding consortium has received preferential negotiating rights from Hitachi. The rumoured valuation is above ¥800bn which would put the premium at just 3.2% above the last close. As we said previously, the potential for a large hike to those terms seems limited and better returns may be on offer in trying to identify other potential buyout targets.</p>

The Nikkei reported today that Bain Capital’s bidding consortium has received preferential negotiating rights from Hitachi. The rumoured valuation is above ¥800bn which would put the premium at just 3.2% above the last close. As we said previously, the potential for a large hike to those terms seems limited and better returns may be on offer in trying to identify other potential buyout targets.

Hitachi Metals – Limited Upside Despite Bain Capital News But Let’s Find the Offshoot Ideas

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Thematic (Sector/Industry)

<p>After Japan's earthquake automobile makers had a lot to worry about, since they were already faced with critical semiconductor shortages.  Now unusually bad weather has hit much of the US, and has stopped chip production in three important fabs in Austin, Texas.  This Insight explores the winners and losers in this series of events.</p>

After Japan's earthquake automobile makers had a lot to worry about, since they were already faced with critical semiconductor shortages.  Now unusually bad weather has hit much of the US, and has stopped chip production in three important fabs in Austin, Texas.  This Insight explores the winners and losers in this series of events.

Texas Weather Deals Second Blow to Automotive Chip Supply Chain

<p>Saturday's 7.1 earthquake in Japan could have caused important supply disruptions for semiconductors.  We reached out to over a dozen companies to check their status, and those who replied indicated that there was little impact.  Still, the automotive sector has reason to be nervous.</p>

Saturday's 7.1 earthquake in Japan could have caused important supply disruptions for semiconductors.  We reached out to over a dozen companies to check their status, and those who replied indicated that there was little impact.  Still, the automotive sector has reason to be nervous.

Japan Quake and Chip Shortages, Tough on Auto?

Japan

Fujitsu Ltd manufactures semiconductor, computer, and communication equipment. The Company provides comprehensive information technology, network and telecommunication solutions, and Internet services.

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Fujitsu Ltd (6702 JP)

Asia Shorts: Geely, Ganfeng, Pharmaron, Evergrande, Fujitsu, Canon, Renesas, Toshiba, LGD, Doosan

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

Fujitsu (6702 JP): Reputation at Risk in UK Post Office Scandal

Fujitsu's culpability in the Horizon/UK Post Office scandal is a serious risk to the company's reputation, to hundreds of billions of Yen in...

Scott Foster

Hitachi Metals – Limited Upside Despite Bain Capital News But Let’s Find the Offshoot Ideas

A rumoured ¥800bn valuation for Hitachi Metals would offer just 3.2% upside from current prices as we previously warned, but there may be other...

Mio Kato

Texas Weather Deals Second Blow to Automotive Chip Supply Chain

A chip shortage is preventing the automotive industry from returning to full volume. Meanwhile Japan's earthquake and bad weather in Texas are...

Jim Handy

Japan Quake and Chip Shortages, Tough on Auto?

Will Saturday's Japan earthquake further disrupt the semiconductor supply chain? Early reports seem tame enough, but automobile manufacturers are...

Jim Handy

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