Independent Research, US Dominant Players, Investment Talk

Investment Talk

Independent Research, US Dominant Players

Investment Talk is for readers who wish to learn about companies that are potentially outside of their own circle of research, as well as those who are longing to become part of a community of like-minded investors and learn more about investment research. I would describe myself as a long-term investor who typically takes a 3Y to 5Y outlook, before reassessing once that period matures. I follow the adage that one should research, reach a conclusion, and then verify and continue to hold so long as the thesis remains intact. My own investing style is one that seeks to find dominant players within their respective market who have shown signs of monopoly or oligopolistic behaviour, unlikely to be disrupted, in tandem with discovering market disruptors who have a high likelihood of disrupting their respective market. Equally (and weighted accordingly) I seek to discover more nuanced, misunderstood, situations with a shorter time frame.

Thematic (Sector/Industry)

<ul><li>You might have heard the news that Nasdaq Inc announced1 a “special rebalance” for the Nasdaq 100; an index which tracks the largest technology stocks across a range of America’s sectors.</li><li>This reshuffle seeks to <strong>“address overconcentration in the index by redistributing the weights”</strong>; specifically the weightings of the Big 7 <em>(Google, Microsoft, Apple, Nvidia, Amazon, Tesla, and Meta)</em> who, together, account for ~54% of the index.</li><li>The rebalance will be based on the shares outstanding as of July 3rd, and changes are expected to be announced on July 14th; taking effect by July 24th2.</li></ul>

You might have heard the news that Nasdaq Inc announced1 a “special rebalance” for the Nasdaq 100; an index which tracks the largest technology stocks across a range of America’s sectors.This reshuffle seeks to “address overconcentration in the index by redistributing the weights”; specifically the weightings of the Big 7 (Google, Microsoft, Apple, Nvidia, Amazon, Tesla, and Meta) who, together, account for ~54% of the index.The rebalance will be based on the shares outstanding as of July 3rd, and changes are expected to be announced on July 14th; taking effect by July 24th2.

The Nasdaq's Special Rebalance Is Not So Special

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) - ADR / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) - ADR

<ul>
<li>TSMC winning with Nvidia's business, beating Samsung due to TSMC's advanced packaging technology; this highlights the rising importance and complexity of chip packaging.</li>
<li>China export restrictions for rare earths used in semiconductors highlight opportunity for U.S. and Australian rare earths producers. We identify two potential plays.</li>
<li>Nanya Technology Earnings: DRAM market has bottomed, sees industry improvement ahead. We see a trading Long opportunity.</li>
</ul>


TSMC winning with Nvidia's business, beating Samsung due to TSMC's advanced packaging technology; this highlights the rising importance and complexity of chip packaging.
China export restrictions for rare earths used in semiconductors highlight opportunity for U.S. and Australian rare earths producers. We identify two potential plays.
Nanya Technology Earnings: DRAM market has bottomed, sees industry improvement ahead. We see a trading Long opportunity.


Taiwan Tech Weekly: TSMC Packaging Tech Ahead of Samsung; China Rare Earths Restrictions Plays; DRAM

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>Three shareholders of <a href="https://www.smartkarma.com/entities/socionext-inc" target="_blank" data-smartkarma-citation="entities:36351:1" rel="noopener">Socionext (6526 JP)</a> aim to raise around US$1.4bn via selling all of their shares in Socionext.</li>
<li>We have covered the background of the deal in our earlier note, <a href="https://www.smartkarma.com/insights/socionext-placement-a-us-1-8bn-cleanup-will-have-to-give-up-some-of-its-6x-listing-gains" target="_blank" data-smartkarma-citation="insights:106206" rel="noopener">Socionext Placement - A US$1.8bn Cleanup, Will Have to Give up Some of Its 6x Listing Gains</a>.</li>
<li>In this note, we talk about the updates and look at the performance of some of the past Japan deals.</li>
</ul>


Three shareholders of Socionext (6526 JP) aim to raise around US$1.4bn via selling all of their shares in Socionext.
We have covered the background of the deal in our earlier note, Socionext Placement - A US$1.8bn Cleanup, Will Have to Give up Some of Its 6x Listing Gains.
In this note, we talk about the updates and look at the performance of some of the past Japan deals.


Socionext Placement - Valuation More Reasonable but past Secondary Offerings Have a Mixed Record

Value Investing

Vladimir Dimitrov, CFA

<ul>
<li>Amazon has significantly underperformed the broader equity market, in spite of the recent rally.</li>
<li>The narrative for generative AI is strong, but the share price is currently driven by other factors.</li>
<li>Margin improvements are being priced-in, which significantly limits any potential upside, without monetary conditions becoming supportive.</li>
</ul>


Amazon has significantly underperformed the broader equity market, in spite of the recent rally.
The narrative for generative AI is strong, but the share price is currently driven by other factors.
Margin improvements are being priced-in, which significantly limits any potential upside, without monetary conditions becoming supportive.


Amazon: Monetary Conditions Are In The Driver's Seat And Higher Margins Are Already Priced-In

Equity Capital Markets

Robosense Technology / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/robosense-technology" target="_blank" data-smartkarma-citation="entities:39903:1" rel="noopener">Robosense Technology (ROBO HK)</a> (RT) is looking to raise around US$300m (estimated) in its upcoming Hong Kong IPO. The deal will be run by JPM and China Renaissance.</li>
<li>As of Mar 23, it had earned design wins for mass production of LiDAR for 52 vehicles with 21OEMs and Tier 1 suppliers, ranking No. 1 globally, according to CIC.</li>
<li>As of Mar 23, it had served the largest number of automotive OEMs and Tier 1 suppliers, according to CIC.</li>
</ul>



Robosense Technology (ROBO HK) (RT) is looking to raise around US$300m (estimated) in its upcoming Hong Kong IPO. The deal will be run by JPM and China Renaissance.
As of Mar 23, it had earned design wins for mass production of LiDAR for 52 vehicles with 21OEMs and Tier 1 suppliers, ranking No. 1 globally, according to CIC.
As of Mar 23, it had served the largest number of automotive OEMs and Tier 1 suppliers, according to CIC.


United States

NVIDIA Corporation designs, develops, and markets three dimensional (3D) graphics processors and related software.  The Company's products provide interactive 3D graphics to the mainstream personal computer market.

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NVIDIA Corp (NVDA US)

The Nasdaq's Special Rebalance Is Not So Special

The rebalance will be based on the shares outstanding as of July 3rd, and changes are expected to be announced on July 14th; taking effect by July...

Investment Talk

Taiwan Tech Weekly: TSMC Packaging Tech Ahead of Samsung; China Rare Earths Restrictions Plays; DRAM

China export restrictions for rare earths used in semiconductors highlight opportunity for U.S. and Australian rare earths producers.

Vincent Fernando, CFA

Socionext Placement - Valuation More Reasonable but past Secondary Offerings Have a Mixed Record

Three shareholders of Socionext (6526 JP) aim to raise around US$1.4bn via selling all of their shares in Socionext. In this note, we look at the...

Sumeet Singh

Amazon: Monetary Conditions Are In The Driver's Seat And Higher Margins Are Already Priced-In

Amazon has significantly underperformed the broader equity market, in spite of the recent rally. The narrative for generative AI is strong, but the...

Vladimir Dimitrov, CFA

Robosense Technology Pre-IPO Tearsheet

Robosense Technology (RT) is looking to raise around US$300m (estimated) in its upcoming Hong Kong IPO. The deal will be run by JPM and China...

Sumeet Singh

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