Technology / Semiconductor / Internet Research

Nicolas Baratte

Equity Bottom-Up

<ul>
<li>US Government invests $9bn in Intel, Nvidia another $5bn, Softbank $2bn. This solves Intel’s most pressing problem: the risk of financial fragility</li>
<li>But neither USG, nor Nvidia have semi manufacturing expertise, so $-injections don’t solve Intel’s 2nd problem. Intel has to  demonstrate a very solid 14A in the next 12 months</li>
<li>USG 1:1 import: domestic rule is positive to GlobalFoundries that can get orders away from SMIC or UMC. Positive to Texas Instrument</li>
</ul>


US Government invests $9bn in Intel, Nvidia another $5bn, Softbank $2bn. This solves Intel’s most pressing problem: the risk of financial fragility
But neither USG, nor Nvidia have semi manufacturing expertise, so $-injections don’t solve Intel’s 2nd problem. Intel has to  demonstrate a very solid 14A in the next 12 months
USG 1:1 import: domestic rule is positive to GlobalFoundries that can get orders away from SMIC or UMC. Positive to Texas Instrument


Intel: Money Only Solves Half the Problem. The 1:1 Domestic-To-Import Ratio Not a Clear Positive

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.

Equity Capital Markets

Fortior Technology (Shenzhen) / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/fortior-technology-shenzhen-co-ltd" target="_blank" data-smartkarma-citation="entities:44259:1" rel="noopener">Fortior Technology (Shenzhen) (688279 CH)</a>, a BLDC motor IC design company, raised around US$330m in its H-share listing.</li>
<li>Fortior Tech is an IC design company dedicated to the design and R&amp;D of BLDC motor control ICs.</li>
<li>In our previous note, we have looked at the past performance and likely A/H premium. In this note, we talk about the trading dynamics.</li>
</ul>



Fortior Technology (Shenzhen) (688279 CH), a BLDC motor IC design company, raised around US$330m in its H-share listing.
Fortior Tech is an IC design company dedicated to the design and R&amp;D of BLDC motor control ICs.
In our previous note, we have looked at the past performance and likely A/H premium. In this note, we talk about the trading dynamics.


Fortior Tech A/H Trading - Sluggish Demand

<ul>
<li>Over past year the price of Silicon Carbide wafers has declined by 50-60%, leading to the bankruptcy of Wolfspeed. The Western media tends to blame Chinese over-capacity and price cuts. </li>
<li>But all SiC firms have massively increased capacity: Infineon, Onsemi, STMicro. The vertical integration of the majors is also to blame: over-investments in a small market (rapidly growing, but small). </li>
<li>Who benefits? Nominally the big integrated vendors Infineon, Onsemi, Rohm, STMicro – but Power SiC is a small fraction of their revenues.</li>
</ul>


Over past year the price of Silicon Carbide wafers has declined by 50-60%, leading to the bankruptcy of Wolfspeed. The Western media tends to blame Chinese over-capacity and price cuts. 
But all SiC firms have massively increased capacity: Infineon, Onsemi, STMicro. The vertical integration of the majors is also to blame: over-investments in a small market (rapidly growing, but small). 
Who benefits? Nominally the big integrated vendors Infineon, Onsemi, Rohm, STMicro – but Power SiC is a small fraction of their revenues.


Automotive Power SiC: The Bankruptcy of Wolfspeed

<ul>
<li>Revenues are still declining by ~teens% YoY but margins shows signs of improvements as end-demand improves and utilization is low. </li>
<li>Renesas doesn’t have an inventory problem and increasing revenues will lead to higher utilization and higher margins. </li>
<li>As Renesas is showing signs of a bottom, the stock is very cheap, trading at -2 standard deviations or 11x 2025 EPS, 9x 2026 EPS.</li>
</ul>


Revenues are still declining by ~teens% YoY but margins shows signs of improvements as end-demand improves and utilization is low. 
Renesas doesn’t have an inventory problem and increasing revenues will lead to higher utilization and higher margins. 
As Renesas is showing signs of a bottom, the stock is very cheap, trading at -2 standard deviations or 11x 2025 EPS, 9x 2026 EPS.


Renesas 1Q25: Cheap Stock That’s Bottoming Out

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

InnoScience Suzhou Technology / Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/innoscience-suzhou-technology" target="_blank" data-smartkarma-citation="entities:44185:1" rel="noopener">InnoScience Suzhou Technology (2577 HK)</a> has priced its IPO at HK$30.86/share, the low end of the range. Over half the shares have been allotted to cornerstone investors.</li>
<li>
<a href="https://www.smartkarma.com/entities/innoscience-suzhou-technology" target="_blank" data-smartkarma-citation="entities:44185:1" rel="noopener">InnoScience Suzhou Technology (2577 HK)</a> should be added to the HSCI in March and will be added to Southbound Stock Connect early March.</li>
<li>Inclusion in global indices will take place in 2026 and there will be supply in mid- and late-2025 following lock-up expiries.</li>
</ul>



InnoScience Suzhou Technology (2577 HK) has priced its IPO at HK$30.86/share, the low end of the range. Over half the shares have been allotted to cornerstone investors.

InnoScience Suzhou Technology (2577 HK) should be added to the HSCI in March and will be added to Southbound Stock Connect early March.
Inclusion in global indices will take place in 2026 and there will be supply in mid- and late-2025 following lock-up expiries.


InnoScience (2577 HK): Prices at Low End & Lists Today; Index Inclusion Timeline

Singapore

STMicroelectronics N.V. designs, develops, manufactures, and markets semiconductor integrated circuits and discrete devices. The Company's products are used in the telecommunications, consumer electronics, automotive, computer, and industrial sectors. Geographically, customers are located in North America, Europe, and the Asia Pacific region.

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STMicroelectronics NV (STM US)

Intel: Money Only Solves Half the Problem. The 1:1 Domestic-To-Import Ratio Not a Clear Positive

USG, Nvidia, and Softbank invest billions in Intel to address financial fragility, but Intel must still demonstrate solid 14A in next 12 months....

Nicolas Baratte

Fortior Tech A/H Trading - Sluggish Demand

Fortior Technology (Shenzhen) (688279 CH), a BLDC motor IC design company, raised around US$330m in its H-share listing. In this note, we talk...

Sumeet Singh

Automotive Power SiC: The Bankruptcy of Wolfspeed

The decline in Silicon Carbide wafer price led to bankruptcy of Wolfspeed. Blame placed on Chinese over-capacity but the vertical integration of...

Nicolas Baratte

Renesas 1Q25: Cheap Stock That’s Bottoming Out

Despite declining revenues, Renesas is showing signs of margins improvement due to increased end-demand and low utilization, making the stock a...

Nicolas Baratte

InnoScience (2577 HK): Prices at Low End & Lists Today; Index Inclusion Timeline

InnoScience raised US$180m in its IPO, valuing the company at US$3.5bn and the H-shares at US$1.95bn. Float will be 2-4% till Dec25, so no chance...

Brian Freitas

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Intel: Money Only Solves Half the Problem. The 1:1 Domestic-To-Import Ratio Not a Clear Positive

​USG, Nvidia, and Softbank invest billions in Intel to address financial fragility, but Intel must still demonstrate solid 14A in next 12 months....

Nicolas Baratte

Fortior Tech A/H Trading - Sluggish Demand

Fortior Technology (Shenzhen) (688279 CH), a BLDC motor IC design company, raised around US$330m in its H-share listing. In this note, we talk...

Sumeet Singh

Automotive Power SiC: The Bankruptcy of Wolfspeed

​The decline in Silicon Carbide wafer price led to bankruptcy of Wolfspeed. Blame placed on Chinese over-capacity but the vertical integration of...

Nicolas Baratte

Renesas 1Q25: Cheap Stock That’s Bottoming Out

​Despite declining revenues, Renesas is showing signs of margins improvement due to increased end-demand and low utilization, making the stock a...

Nicolas Baratte

InnoScience (2577 HK): Prices at Low End & Lists Today; Index Inclusion Timeline

InnoScience raised US$180m in its IPO, valuing the company at US$3.5bn and the H-shares at US$1.95bn. Float will be 2-4% till Dec25, so no chance...

Brian Freitas

USG, Nvidia, and Softbank invest billions in Intel to address financial fragility, but Intel must still demonstrate solid 14A in next 12 months....

The decline in Silicon Carbide wafer price led to bankruptcy of Wolfspeed. Blame placed on Chinese over-capacity but the vertical integration of...

Despite declining revenues, Renesas is showing signs of margins improvement due to increased end-demand and low utilization, making the stock a...