Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyzed the changes in short interest of TWSE Stocks as of Sep 8th which has an aggregated short interest worth USD12.5bn.</li>
<li>We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.</li>
<li>We highlight short interest changes in Taiwan Cement, Realtek, Formosa Plastics, China Airlines, Innolux.</li>
</ul>


We analyzed the changes in short interest of TWSE Stocks as of Sep 8th which has an aggregated short interest worth USD12.5bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases &amp; decreases in short value, short as multiple of ADT.
We highlight short interest changes in Taiwan Cement, Realtek, Formosa Plastics, China Airlines, Innolux.


TWSE Short Interest Weekly (Sep 8th): Taiwan Cement, Realtek, Formosa Plastics

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/elan-microelectronics-corp" target="_blank" data-smartkarma-citation="entities:19789:1" rel="noopener">Elan Microelectronics (2458 TT)</a> will be removed from the FTSE Taiwan Mid Cap 100 Index on September 16th. As a result, it could see 12+ days of volume of selling.</li>
<li>We had a call with management. Guidance and product performance implies the company has relative strength vs. its end-market demand weakness.</li>
<li>The stock has already underperformed notebook-related peers by a wide margin, hence a further underperformance caused by passive selling could open up a rebound opportunity,</li>
</ul>



Elan Microelectronics (2458 TT) will be removed from the FTSE Taiwan Mid Cap 100 Index on September 16th. As a result, it could see 12+ days of volume of selling.
We had a call with management. Guidance and product performance implies the company has relative strength vs. its end-market demand weakness.
The stock has already underperformed notebook-related peers by a wide margin, hence a further underperformance caused by passive selling could open up a rebound opportunity,


Elan Microelectronics Event: Index Removal Selling Could Exacerbate Price Divergence

<ul>
<li>We analyze analyst earnings revisions over the last month to identify key industry takeaways from stocks with major downward and upward revisions.</li>
<li>Innolux indicates there could be another year of pain ahead for LCD Panels, Wistron sees notebook weakness through year-end.</li>
<li>Signs of strong demand persist in Commercial IT, AI, and Medical. </li>
</ul>


We analyze analyst earnings revisions over the last month to identify key industry takeaways from stocks with major downward and upward revisions.
Innolux indicates there could be another year of pain ahead for LCD Panels, Wistron sees notebook weakness through year-end.
Signs of strong demand persist in Commercial IT, AI, and Medical. 


Taiwan Tech: Market Signals in the Latest Earnings Revisions

Taiwan Tech Focused Senior Analyst

Patrick Liao

Novatek Microelectronics Corp / Equity Bottom-Up

<ul>
<li>Novatek had reported a flattish sales outlook in 1Q22, and all of revenue, GM and OPM were expected to NT$35.8~36.8bn, 48~51% and 34~37% respectively, while revenue was at -1.92~+0.82% QoQ. </li>
<li>We think the high inventory days of supply chain is giving a good chance to expand into China foundry for production, especially SMIC.</li>
<li>We think Novatek would maintain its solid dividend policy for EPS NT$63.87 in 2021, and it’s pay-out ratio is 80% in the past.</li>
</ul>


Novatek had reported a flattish sales outlook in 1Q22, and all of revenue, GM and OPM were expected to NT$35.8~36.8bn, 48~51% and 34~37% respectively, while revenue was at -1.92~+0.82% QoQ. 
We think the high inventory days of supply chain is giving a good chance to expand into China foundry for production, especially SMIC.
We think Novatek would maintain its solid dividend policy for EPS NT$63.87 in 2021, and it’s pay-out ratio is 80% in the past.


Novatek (3034.TT): A Good Year Ahead, and Likely to Expand to SMIC for Wafer Foundry

External broker reports(aggregated public sources), Capital Securities Corp

Capital Securities

External broker reports(aggregated public sources)

<p>Uncertainty over panel supply may emerge following China’s power consumption controls; upgrade to TRADING BUY . Since APR21, Innolux’s share price has retreated persistently and declined by 51.92% at one point. Moreover, as China launched a dual control program to curb power consumption in the country recently, it has cast uncertainty over future panel supply.. We upgrade Innolux from NEUTRAL to TRADING BUY.</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Uncertainty over panel supply may emerge following China’s power consumption controls; upgrade to TRADING BUY . Since APR21, Innolux’s share price has retreated persistently and declined by 51.92% at one point. Moreover, as China launched a dual control program to curb power consumption in the country recently, it has cast uncertainty over future panel supply.. We upgrade Innolux from NEUTRAL to TRADING BUY.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Innolux (3481 TT, TRADING BUY, NTD16.50) 

Taiwan

Innolux Corporation manufactures TFT-LCD, LCD models and LCD monitors. The company also provides research, development, manufacturing and retails business.

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Innolux Corp (3481 TT)

TWSE Short Interest Weekly (Sep 8th): Taiwan Cement, Realtek, Formosa Plastics

We analyzed TWSE short interest report for the past week and highlight short interest changes in Taiwan Cement, Realtek, Formosa Plastics, China...

Ke Yan, CFA, FRM

Elan Microelectronics Event: Index Removal Selling Could Exacerbate Price Divergence

We had a call with management. Guidance and product performance implies the company has relative strength vs. its end-market demand weakness.

Vincent Fernando, CFA

Taiwan Tech: Market Signals in the Latest Earnings Revisions

We analyze analyst earnings revisions over the last month to identify key industry takeaways from stocks with major downward and upward revisions.

Vincent Fernando, CFA

Novatek (3034.TT): A Good Year Ahead, and Likely to Expand to SMIC for Wafer Foundry

In 1Q22, Novatek reported revenue, GM and OPM expected to NT$35.8~36.8bn, 48~51% and 34~37% respectively, which revenue was at -1.92~+0.82% QoQ. We...

Patrick Liao

Innolux (3481 TT, TRADING BUY, NTD16.50)

Uncertainty over panel supply may emerge following China’s power consumption controls; upgrade to TRADING BUY . Since APR21, Innolux’s share price...

Capital Securities

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