All Posts By

Smartkarma Content

Entities 33101-33200

By | Entity Directory
Entity
Insights
Analytics
News
Discussion
Filings
Reports

Weekly Top Ten Tech Hardware and Semiconductor – Feb 25, 2024

By | Tech Hardware and Semiconductor
This weekly newsletter pulls together summaries of the top ten most-read Insights across Tech Hardware and Semiconductor on Smartkarma.

Receive this weekly newsletter keeping 45k+ investors in the loop


1. From Nvidia Results to See Supply Chain Stories?

By Andrew Lu

  • Post 35% price gain in a quarter, many good news we expected and other analysts expected already factored into the share price. We believe the risk/reward not attractive here.
  • TSMC guides stronger 1Q24 and 2024, helped by Nvidia and copy cat AI GPU/ASIC orders. We see greater opportunities for alternative copy cat solutions like AMD and Alchip.
  • We attribute Nvidia customers’ sales discrepancy to AI server is cannibalizing non-AI server and Nvidia is allocating more GPUs to premium price paying customers in 1H24 and reverse in 2H24.

2. TSMC (2330.TT; TSM.US): The Implications of Feb Sales, TSMC 2nd Japanese Fab and NVDA Stock Price.

By Patrick Liao

  • Usually, February is typically the month with the fewest working days of the year, and therefore, revenue is likely to be at its lowest as well.
  • We consider that the Taiwanese government may desire TSMC to build fabs in countries aligned with those who signed the “Wassenaar Arrangement.” 
  • The price hike of NVIDIA Corp (NVDA US) by US$785.38 on February 22 in the US market could signal an important development in the AI sector.

3. United Microelectronics Is Becoming a Great Long-Term Acquisition Target for Intel

By Vincent Fernando, CFA, Zero One

  • UMC spoke at an investment bank’s recent conference, providing additional color on guidance and its collaboration with Intel for 12nm chip production.
  • UMC comments imply the key synergies between the two companies, whereby each can solve the other’s key problem,
  • While UMC most likely needs to remain a “Taiwanese company” in terms of optics given its history, Intel’s synergies with UMC establishes acquisition-value support for UMC shares in our view.

4. AMAT. Post Earnings Surge For No Good Reason

By William Keating, Ingenuity

  • Q124 revenues of $6.71 billion, at the high end of the guided range and essentially flat sequentially both QoQ and YoY
  • Q224 revenue $6.5 billion at the midpoint, a modest downward movement of 3% QoQ and in line with what we saw from peers KLAC and LRCX
  • Still a great company with excellent growth prospects, just not in 2024

5. SUMCO’s Sobering Outlook For Silicon Wafers

By William Keating, Ingenuity

  • Q423 revenues of ¥105.1 billion, about 5% better than forecasted, up 5% QoQ but down ~10% YoY.
  • Q124 revenues forecasted to decline 17% QoQ to ¥87 billion. Not surprisingly, EBITDA will also decline 33% QoQ to ¥22.1 billion.
  • On a brighter note, demand growth driven by generative AI will roughly double wafer demand for servers (AI+General) by 2027

6. Intel Snags Altman To Close Foundry Day Event

By William Keating, Ingenuity

  • Despite the high-profile announcement of his attendance, his segment was less than 3 minutes long!
  • Intel’s CEO alluded to a partnership with OpenAI and implied there’s more to come yet there’s been no public announcement of any such partnership. 
  • Microsoft’s commitment to use Intel’s 18A is a vote of confidence in their foundry offering. Let’s see how it plays out.

7. Finding the Sweet Spot: Nvidia’s Goldilocks Quarter

By Douglas O’Laughlin, Fabricated Knowledge

  • Nvidia’s earnings are akin to my Super Bowl.
  • There is no more significant event in semiconductors and AI, and each quarter, we tune into Nvidia’s results to see precisely what quarter we are in the AI hype cycle (and potentially bubble).
  • There is no better signpost for the entire AI ecosystem than the company making the most of the revenue so far: Nvidia.

8. Novatek (3034.TT): It’s Said to Alliance with ARM to Build up Neoverse V2, Targeting AI Market.

By Patrick Liao

  • Novatek’s share price has surged by more than 15% in four days due to the news of Novatek’s alliance with ARM to develop Neoverse V2.
  • While the decision on whether the iPhone 16 will feature OLED technology is still pending, the general sentiment is optimistic.
  • Novatek is set to leverage Intel Corp (INTC US)’s 12nm capacity through United Microelectron Sp Adr (UMC US) in the near future.

9. Taiwan Tech Weekly: AI Plays Weak Ahead of Nvidia Results Today; Intel & UMC; ARM & Novatek

By Vincent Fernando, CFA, Zero One

  • Key Events: 1) Nvidia Results Coming Today in the U.S. 2) Elan & ChipMOS Tomorrow in Taiwan 3) U.S. PC Maker Results Next Week
  • Why United Microelectronics Is Becoming a Great Long-Term Acquisition Target for Intel 
  • Novatek a Top Gainer After Reports of Alliance with ARM to Build Neoverse V2 for AI

10. Globalwafers (6488.TT): The Revenue Is Expected to Improve in 2H24F

By Patrick Liao

  • The sales of Jan 2024F were the lowest during 2022-2024F, indicating a likely downtrend for 1Q24F.
  • Demand is expected to remain sluggish in 2Q24F, potentially resulting in decreased raw wafer demand for Logic and Memory in 2Q24F.
  • The market for 12″ raw wafers is expected to have a more stable demand-supply balance, while raw wafers of 8” and smaller sizes could experience reduced demand in 1H24F.

Weekly Top Ten Equity Capital Markets – Feb 25, 2024

By | Equity Capital Markets
This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

Receive this weekly newsletter keeping 45k+ investors in the loop


1. Senko Group (9069 JP) Offering – Banks and Insurers Unwinding Cross-Holdings in Offering

By Travis Lundy, Quiddity Advisors

  • SENKO Group Holdings Co., Ltd. (9069 JP) today announced large financial institutional cross-holders would sell shares in a Secondary Offering. There’s a buyback on the back end.
  • Cross-Holding unwinding is the subject of the moment. It will continue to be so. It will involve selldowns, and buybacks. Study the model of what companies must do what. 
  • In this case, Senko has a LOT of cross-holders and minimal excess cash. So investors buy more shares. But there is a buyback and index demand to come.

2. Gree (3632 JP) – Overnight Offering in Asset-Rich Value Trap as KDDI Sells Out

By Travis Lundy, Quiddity Advisors

  • Today after the close, KDDI Corp (9433 JP) and Gree Inc (3632 JP) announced that KDDI would offer its 8,000,000 shares in Gree in an international offering through Mizuho Intl.
  • The deal comes at a decently large discount and the stock is quite downtrodden. Especially when compared to its venture assets and cash, assuming invested amount is remotely viable.
  • The problem is that too much of revenue isn’t earning much, so this sits in a Value Trap category. Shareholder structure makes it difficult to do buybacks.

3. Heiwado (8276 JP) – Banks and Insurers Unwinding Cross-Holdings In Offering

By Travis Lundy, Quiddity Advisors

  • Heiwado Co Ltd (8276 JP) today announced a Secondary Offering sell-down by cross-holders, combined with a buyback post-offering to mitigate some of the effects of overhang.
  • Banks and insurers are selling, and that will leave the stock with a lot of cross-holders left, but investors should look at the model given he zeitgeist. 
  • Companies with lots of cross-holders have to be “fair” to them. Those without copious cash have to spread it around so this transaction model looks likely to be continued.

4. Initial Thoughts on the Webtoon Entertainment IPO

By Douglas Kim

  • Naver Corp (035420 KS) is trying to complete the IPO of its affiliate Webtoon Entertainment in the US stock market as early as June 2024. 
  • The expected value of Webtoon Entertainment (post IPO) is about US$3 billion to US$4 billion. Webtoon Entertainment is seeking to raise about US$500 million in this IPO. 
  • The IPO of Webtoon Entertainment in the US is likely to have a positive impact on Naver Corp (035420 KS).

5. Azure Minerals Block – Removal of Overhang but Still a Risky Bet

By Ethan Aw, Aequitas Research

  • Mineral Resources (MIN AU) is looking to raise up to A$229m (US$150m) via a secondary block trade in Azure Minerals (AZS AU), which will be a clean-up. 
  • The deal is a large one to digest, at approximately 51.6 days of three month ADV and 13.8% of current mcap. 
  • In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

6. Union Bank of India QIP – Well-Flagged and Just in Time for Index Inclusion

By Sumeet Singh, Aequitas Research


7. Trial Holdings Pre-IPO – Refiling Updates – Margin Uptick, More Golf Courses

By Sumeet Singh, Aequitas Research

  • Trial Holdings (5882 JP) (TH) is now looking to raise around US$234m in its Japan IPO, after having canceled its prior listing attempt last year.
  • TH operates a network of retail stores that offer one-stop shopping under its everyday low price model, across a variety of daily necessities, food items and other products.
  • We have looked at the past performance in our previous notes. In this note, we talk about the updates from its recent filings.

8. Orica Placement – Keeping the Acquisition Momentum Going

By Ethan Aw, Aequitas Research

  • Orica Ltd (ORI AU) is looking to raise up to A$400m (US$260m) in its primary placement. The proceeds will be used to partially fund the acquisition of Cyanco. 
  • The deal is a large one to digest, representing 21.3 days of three month ADV and 5.2% dilution. 
  • In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

9. ECM Weekly (19th Feb 2024) – Toei Ani, KB Fin, IIF, Trial, Juniper, Bharti Hexacom, Octillion Energy

By Sumeet Singh, Aequitas Research

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • On the IPO front, Trial Holdings (5882 JP) was back in the market, a year after ditching its previous attempt, while Juniper Hotels is trying to ride the India wave.
  • For placements, more signs of REIT coming back to life, this time in Japan. A relatively large deal in Toei Animation (4816 JP) as well was launched.

10. Amman Mineral International Lockup Expiry – Large Lockup Expiry, Sitting on Sizeable Profits

By Ethan Aw, Aequitas Research

  • Amman Mineral Internasional (AMMN IJ) raised around US$714m in its Indonesia IPO, after pricing the deal at IDR1,695/share. Its eight-month lockup will expire on 21st Feb 2024.
  • Amman Mineral International (AMI) carries out exploration, development, mining, and processing. The company operates an open pit copper and gold mine known as the Batu Hijau mine in Indonesia.
  • In this note, we will talk about the lock-up dynamics and updates since our last note.

Weekly Top Ten Event-Driven and Index Rebalance – Feb 25, 2024

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

Receive this weekly newsletter keeping 45k+ investors in the loop


1. HSTECH Index Rebalance: Tongcheng (780 HK) In; GDS (9698 HK) Out; Round Trip Trade US$1bn

By Brian Freitas, Periscope Analytics


2. Hang Seng Internet & IT Index Rebalance: Three Changes & One Big Surprise

By Brian Freitas, Periscope Analytics

  • There will be 3 changes for the Hang Seng Internet & Information Technology Index (HSIII) at the March rebalance. There are some surprises.
  • Estimated one-way turnover at the rebalance is 5.6% resulting in a round-trip trade of HK$3.26bn (US$416m). 6 stocks will have over 1x ADV to trade.
  • There is huge short interest on East Buy Holding (1797 HK) and there could be some short covering ahead of the inclusion of the stock in the index.

3. Dow Jones Industrials (INDU) Index Rebalance: Amazon (AMZN) Replaces Walgreen Boots (WBA)

By Brian Freitas, Periscope Analytics


4. TCM (570 HK): Sinopharm’s $4.60/Share Offer

By David Blennerhassett, Quiddity Advisors

  • $4.60/Share. That’s the number – by way of a Scheme – that only matters. Below the recently rumoured $6/share, and $5.10/share a little over three years ago. Terms are final.
  • As widely expected, the Offeror is SASAC-managed China National Pharmaceutical Group Corporation (CNPGC), indirectly owning 32.46% in China Traditional Chinese Medicine (570 HK) (TCM) via Sinopharm Group Hongkong,
  • Optically, the Offer price appears light. But this should still get up. TCM is trading rich to peers. No other competing bidder will emerge. Expect regulatory pre-cons to be fast-tracked.

5. China Traditional Chinese Medicine (570.HK) – New Information on Privatization

By Xinyao (Criss) Wang

  • Since China TCM doesn’t deny the rumors so far after the trading halt, privatization is becoming likely this time.Rumor said formal negotiations may not begin until after the Lantern Festival.
  • CNPGC may not want to pay high prices on privatization.Weak sentiment/share price may help with the negotiations.But the key is to obtain the consent of other shareholders, especially Ping An.
  • There’s underlying logic for Taiji Group to drive this privatization. A price of higher than HKD5.1 is possible. If the price could reach HKD6 (or higher), it has exceeded expectations.

6. STTF Index Rebalance Preview: One High Probability Change in March

By Brian Freitas, Periscope Analytics


7. Azure (AZS AU): MinRes’ Discounted Exit

By David Blennerhassett, Quiddity Advisors

  • JPMorgan is placing MinRes (MIN AU)‘s 14.5% stake in Azure Minerals (AZS AU) at A$3.42/share, a 5% discount to last close and a 7.6% discount to the A$3.70/share Scheme price. 
  • It was reported last month that MinRes, who paid up to ~A$4.00/share for some of its stake, was looking to exit. But cash now vs. ~8% more in two months?
  • Given the recent rout in lithium and nickel prices, one wonders if a MAC landmine lurks. Or, quite simply, MinRes just needs the cash. Expect Azure to fall tomorrow.

8. Snow Peak (7816) – Bain Deal at ¥1,250 – 46% Premium Is Nice, Not A Home Run

By Travis Lundy, Quiddity Advisors

  • The possibility/likelihood of a “¥50bn MBO” for Snow Peak Inc (7816 JP) was leaked in a Nikkei article last Friday. It went limit up two days in a row. 
  • That TOB price is more than 70% off its three-year high. That will certainly disappoint some. Separately, the price seems a bit low given growth. 
  • The family and friends own ~42% so if someone gets upset, or uppity, there could be a challenge. Just because an MBO exists doesn’t mean people have to tender in.

9. Korea NPS Abruptly Joins Corporate Value Up Program: According to Document Obtained from NPS

By Sanghyun Park, Clepsydra Capital

  • NPS abruptly joins ‘Corporate Value Up Program’, plans to select three asset managers. Deadline: this month’s 29th; results: March 19th, possibly linked to Korea Premium Index ETF launch in mid-May.
  • The document outlines guidelines, allocating 90-100% to value stocks, with KOSDAQ under 20%. While benchmarked to the internally-built index, it will likely focus on Korea Premium Index and KOSDAQ Global.
  • The fund size is crucial. NPS will disclose details later. But still, there is considerable room to this year’s ceiling for local equity; a significant amount could flow into this.

10. China Traditional Chinese Medicine (570 HK): Sinopharm-Led Pre-Conditional Offer at HK$4.60

By Arun George, Global Equity Research Ltd

  • China Traditional Chinese Medicine (570 HK) announced a privatisation offer from the Sinopharm-led consortium at HK$4.60 per share, a 47.4% premium to the undisturbed price.
  • The pre-condition relates to various Chinese regulatory approvals. As SOE entities own the offeror, regulatory approvals will be a formality. The offer price is final. 
  • Ping An Insurance (H) (2318 HK), which holds a blocking stake, will be supportive. The offer is fair when the previously (higher) rumoured offers are adjusted for the market downturn. 

Weekly Top Ten Macro and Cross Asset Strategy – Feb 25, 2024

By | Macro and Cross Asset Strategy
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

Receive this weekly newsletter keeping 45k+ investors in the loop


1. Easy Money to Low PBR Stocks in KOSPI 200 Is Now Over – What’s Next?

By Douglas Kim

  • There are 92 stocks in KOSPI 200 that are trading at less than 1x PBR. These 92 stocks are up on average 6% YTD. 
  • Among these 92 stocks, 40 of them are trading at below 0.5x PBR. These 40 stocks are up on average 8.2%. 
  • In this insight, we argue that the “easy money” of making money by increasing capital allocation to low PBR stocks in Korea is nearly over in the near term. 

2. Portfolio Watch – Have markets traded the cyclical rebound in advance?

By Andreas Steno, Steno Research

  • Welcome to our weekly portfolio watch, which today will be all about the (potential) upcoming rebound in the cyclical momentum.
  • As always we share our trade thoughts and ideas and provide you with our current allocation.
  • Yesterday’s PPI came in hot as we expected (0.6% MoM in core PPI vs 0.1% expected), which serves as an early sign of a reacceleration in inflationary pressures, which have been our base case since the continuation of the tensions in the Red Sea: It looks like the increase in US freight rates has started to impact producer prices.

3. The Week That Was in ASEAN@Smartkarma – BBNI’s Aspirations, Oceanagold IPO, and Thailand’s Recovery

By Angus Mackintosh, CrossASEAN Research

  • The past week saw insights on Bank Negara Indonesia (BBNI IJ), Bank Mandiri (BMRI IJ), OceanaGold Philippines, Sam Holdings IPO, and the most SET50 Index rebalance. 
  • There were also macro insights on Thailand with some optimism, Vietnam as it starts to recover, Malaysia with lingering concerns, and the Philippines, as the BSP keeps rates on hold.
  • The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across Southeast Asia.

4. Positioning Watch – Low FX volatility provides cheap leverage for a rebound in manufacturing

By Andreas Steno, Steno Research

  • Hello everyone, and welcome back to our weekly Positioning Watch.
  • Markets were caught on the wrong side of expectations last week with PPI coming in substantially hotter than expected, but equity sentiment has remained decent outside of some profit taking in Tech, as the cocktail of better liquidity conditions and a brightening economic outlook is likely to prevail – and positioning provides very decent opportunities to trade the potential comeback for cyclical assets.
  • As this week’s chart of the week we present to you what looks to be the theme of Q1 2024, and the reason why right now is not a good time to be contrarian: momentum is king, and “go with the flow” currently performs WAY better than cherry-picking the good old value stocks.

5. Indonesia Politics: Prabowo Wins, But Does Indonesia?

By Manu Bhaskaran, Centennial Asia Advisors

  • Ex-General Prabowo Subianto got third-time lucky in his bid for the presidency. We caution, however, that things will not be “business as usual” under the erratic strongman. 
  • Contrary to his campaign rhetoric of providing “continuity Jokowi”, we argue that Prabowo will not pursue several positive aspects of the Widodo agenda with the same vigour. 
  • Short-Term political intrigue and long-run degradation in governance are material risks given the election results and preceding developments, These are due cause for worry.

6. Energy Cable: All the upside left in Henry Hub

By Ulrik Simmelholt, Steno Research

  • Greetings from a rainy and cold Copenhagen.
  • Since we haven’t talked about natural gas for a while we will start out here before turning to crude.
  • Last week saw Henry Hub making lows last seen during the first wave of Covid in the spring of 2020.

7. Great Game – Asian elections and Ukraine outlook

By Mikkel Rosenvold, Steno Research

  • Welcome to this week’s rundown of international events and the impact on your portfolio.
  • There is still some time to go on my cease-fire prediction from last week, so let’s focus on some other topics that we’re talking about right now.
  • As a new addition to our offering, we’re experimenting with video editions of certain articles as many of you have requested.

8. US CPI Inflation 3.09% y-o-y (consensus 2.9%) in Jan-24

By Heteronomics AI, Heteronomics

  • The US CPI inflation rate for January 2024 exceeded expectations, slowing down to 3.09% y-o-y, marking the lowest growth since June 2023.
  • The US Core CPI inflation rate stayed at 3.9% y-o-y.
  • This rate was 0.2pp above consensus expectations, further supporting the hawkish surprise.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

9. India Politics: Opposition Coalition Fractures, Boosting Modi’s Chances

By Manu Bhaskaran, Centennial Asia Advisors

  • The opposition INDIA coalition is facing severe setbacks in their efforts to form a united front against prime minister Modi and the ruling BJP. 
  • While the BJP was always the favourite to win the next elections, the fragmentation of opposition forces opened a wider path for a landslide majority win. 
  • How Modi uses his political capital in such an event will be pivotal to whether India can take advantage of its current position in the world. 

10. The Weekly Market Monitor – The 34-Year Wait Is Over!

By Jeroen Blokland, True Insights

  • First, Japan entered a recession, and a week later, the Nikkei hit an all-time high after 34 years. Any idea why this is?
  • The Institute of International Finance (IIF) has updated its global debt chart. Be aware that it does NOT show the true underlying trend.
  • You are only allowed to trade Chinese equities if you are going to buy them. China will have a serious long-term issue in attracting fresh capital.

Weekly Top Ten Tech Hardware and Semiconductor – Feb 18, 2024

By | Tech Hardware and Semiconductor
This weekly newsletter pulls together summaries of the top ten most-read Insights across Tech Hardware and Semiconductor on Smartkarma.

Receive this weekly newsletter keeping 45k+ investors in the loop


1. Taiwan Dual-Listings Monitor: High Spreads Persist After CNY Break

By Vincent Fernando, CFA, Zero One

  • TSMC: +16.6% ADR Premium, Still High After CNY Multi-Day Taiwan Market Close
  • UMC: 1.3% ADR Premium, Still Historically High After CNY Break
  • ChipMOS: +4.2% Premium, Very Rare & High Level, Not Sustainable

2. Taiwan Tech Weekly: TSMC Playing Post-CNY Catch-Up; All Eyes on Upcoming Nvidia Results

By Vincent Fernando, CFA, Zero One

  • Taiwan Market Surges in Post-CNY Catch-Up, TSMC a Top Gainer Locally
  • Key Events Ahead: Nvidia Results Next Week, Key Taiwan Names Reporting
  • Taiwan Dual-Listings Monitor: High Spreads to Persist After CNY Break 

3. Silicon Motion Memory Readthrough: NAND Flash to Remain In Shortage; Up-Cycle to Persist

By Vincent Fernando, CFA, Zero One

  • Silicon Motion reported results last week that beat consensus; Moreover, the company expects strong growth not just in 2024E, but also in 2025E.
  • The company’s growth will significantly exceed PC and mobile phone market growth thanks to strong memory demand trends within these segments.
  • The company sees NAND Flash in shortage into 2025E based on visibility into its client ecosystem. We continue to view SIMO as a next-wave play on the Memory recovery.

4. Globalfoundries. Pressure Grows As Customer Penalties Soar

By William Keating, Ingenuity

  • Globalfoundries (GFS) reported Q423 revenues of $1.854 billion, marginally above the midpoint of the guidance range, down 12% YoY and essentially flat sequentially.
  • Guided Q124 down 18% QoQ with Gross Margin set to fall from 29% to 23%
  • SMIC will outspend GFS 10x in CapEx terms this year

5. Renesas (6723 JP): Two More Strategic Acquisitions

By Scott Foster, LightStream Research

  • Renesas has acquired PCB electronic design company Altium and Gallium Nitride power device maker Transphorm. Its tender offer for Sequans Communications has been extended.
  • These are positive developments in our view, but sales and profit margins were down in 4Q of FY Dec-23 and are expected to decline this quarter as well.
  • On the other hand, inventory adjustment is proceeding and the share price has dropped 12.6% since last Tuesday. Buy on weakness for the longer term. 

6. Automotive (NXPI, IFX) Optics (FN, COHR), MKSI, MPWR, ACLS, SLAB, RMBS, ARM

By Douglas O’Laughlin, Fabricated Knowledge

  • Welcome to this week’s earnings. My spark notes are the NXPI and IFX did better than I feared, but I continue to be unconstructive on automotive.

  • Fabrinet and Coherent both achieved good results, but Fabrinet disappointed expectations for Nvidia’s pluggable revenue. Is this a weak read-through? Unlikely. Marvell should have an amazing year if Coherent’s TAM is remotely correct.

  • MKSI put up the exact results I was looking for, and this continues to be my favorite idea. As WFE increases, inventory builds will happen, and then financial and operational leverage will take care of the rest.


7. WTF Is Going on at SuperMicro? (SMCI)

By Douglas O’Laughlin, Fabricated Knowledge

  • I want to talk about Supermicro. The stock has gone parabolic; some say it’s emblematic of the coming Semiconductor and AI bubble.
  • I think it is to a certain extent, but I want to point out a particular aspect that has been happening.
  • Given the high volume of options expiring today, I believe there is an ongoing gamma squeeze. It created huge buying pressure that has led to today. This was the run-up until Thursday.

Weekly Top Ten Equity Capital Markets – Feb 18, 2024

By | Equity Capital Markets
This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.

Receive this weekly newsletter keeping 45k+ investors in the loop


1. Toei Animation (4816) – Shareholder Selldown To Meet Listing Hurdles – Bigly, Heavy, More to Come

By Travis Lundy, Quiddity Advisors

  • In December 2021, when companies were required to file statements with the TSE as to plans to meet continuing listing requirements, Toei Animation (4816 JP) had a Plan.
  • That plan? Get from a then-current 15.5% Tradable Shares level to 25.0% by 31 March 2025. That was “OK” though later, the TSE asked companies to speed it up.
  • Today, shareholders Sony and Bandai Namco announced an equity offering to sell down up to 4.48mm shares in a domestic+overseas offering. It’s big, heavy, and there is more to come.

2. Toei Animation Placement – Looks Ripe for a Correction

By Sumeet Singh, Aequitas Research

  • Bandai Namco (7832 JP) and Sony Pictures are looking to raise up to US$525m via selling around 10.66% of Toei Animation (4816 JP) (TA).
  • The purpose of the placement is to unwind some of the cross-shareholding, as well as help TA to maintain its listing in the Standard Segment.
  • In this note, we will talk about the placement and run the deal through our ECM framework.

3. Toei Animation (4816 JP): A US$550 Million Secondary Offering

By Arun George, Global Equity Research Ltd

  • Toei Animation (4816 JP) has announced a secondary offering of up to 4.5 million shares (including overallotment). Bandai Namco Holdings (7832 JP) and Sony Corp (6758 JP) are the sellers.
  • The offering will allow Toei Animation to maintain its listing in the TSE Standard Market and enable Bandai Namco and Sony to reduce and liquidate cross-shareholdings.
  • Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will likely fall between 27 February and 4 March (likely 27 February).

4. Initial Thoughts on Hyundai Motor India IPO

By Douglas Kim

  • Hyundai Motor India has been taking initial steps for an IPO. We believe this IPO could be completed sometime in 4Q 2024. 
  • Hyundai Motor India Limited (HMIL) IPO offering size is estimated to be at least US$3 billion, which would be one of the largest in India and the world this year.
  • If HMIL is valued at US$25 billion and HMC sells a 15% stake, its remaining 85% stake would be worth US$21 billion, representing 55% of HMC’s market cap. 

5. APR IPO Book-Building Results Analysis

By Douglas Kim

  • APR reported a very strong IPO book-building results. APR IPO price has been determined at 250,000 won, which is 25% higher than the high end of the IPO price range.
  • A total of 1,969 institutional investors participated in this IPO book-building. The demand ratio was 663 to 1. APR IPO will start trading on 26 February. 
  • Our base case valuation of APR is target price of 370,809 won per share which represents a 48% upside from the IPO price of 250,000 won. 

6. KB Financial Placement – Momentum Has Been Strong and the Last Clean-Up Sale Has Done Well

By Clarence Chu, Aequitas Research

  • The Carlyle Group / (CG US) via Kingsman Investment, is looking to raise US$244m from selling its entire stake in KB Financial (105560 KS).
  • Carlyle has been invested in the firm since mid-2020, where it then expressed that it would hold on to its stake for at least three and a half years. 
  • The deal would be a small one to digest at just 3.8 days of KB Financial’s three month ADV, representing 1.2% of its current mcap.

7. ECM Weekly (12th Feb 2024) – Nissan/Renault, Metcash, Digital Core, SBFC, Thai Credit, Park Hotel

By Sumeet Singh, Aequitas Research

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • On the IPO front, Thai Credit Bank finally ended Thailand’s long dry spell, although it wasn’t a happy ending.
  • For placements, REITs appear to be coming back to life with rates now having peaked.

8. Industrial & Infrastructure Investment Corp Placement – Back to the Markets for the 12th Time

By Ethan Aw, Aequitas Research

  • Industrial & Infrastructure Fund Investment (3249 JP) is looking to raise around US$341m in its primary follow-on offering to acquire 28 properties and an equity interest in a silent partnership. 
  • The deal is a somewhat large one to digest, at 83 days of three month ADV and 16.2% dilution.
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

9. CICC-Backed Chinese Chip Design Firm Fined Over Fraudulent IPO Application

By Caixin Global, Caixin Global

  • A semiconductor company sponsored by China International Capital Corp. Ltd. (CICC), one of the country’s top investment banks, has been fined over IPO application fraud, the China Securities Regulatory Commission (CSRC) said in a statement Friday.
  • S2C Ltd., which specializes in electronic design automation, has been fined 4 million yuan ($563,095) for fraudulent activities in its attempt to list on Shanghai’s tech-heavy STAR Market.
  • The move marks the CSRC’s latest effort to enforce strict information disclosure requirements and tough penalties for market violations under its registration-based IPO mechanism.

10. Bharti Hexacom Pre-IPO – The Negatives – No Clear Rationale for Listing

By Sumeet Singh, Aequitas Research

  • Bharti Hexacom is looking to raise up to US$1bn in its upcoming India IPO.
  • Bharti Hexacom (BH) is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers in the Rajasthan and the North East telecommunication circles in India.
  • In this note, we talk about the not-so-positive aspects of the deal.

Weekly Top Ten Event-Driven and Index Rebalance – Feb 18, 2024

By | Event-Driven and Index Rebalance
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.

Receive this weekly newsletter keeping 45k+ investors in the loop


1. Outsourcing (2427) – Earnings Delay Causes Consternation

By Travis Lundy, Quiddity Advisors

  • Originally, the MBO for Outsourcing Inc (2427 JP) was expected to get launched end-January 2024. A late-ish filing with regard to the EU’s Foreign Subsidies Regulation regime prompted a delay.
  • Yesterday Outsourcing announced a delay its earnings release by 3 business days, the delay “procedures related to impairment losses are continuing.”
  • Outsourcing shares are down hard on this. -1.5% as I write. I examine.

2. Screen Holdings (7735 JP): Positioning & Potential Passive Buying

By Brian Freitas, Periscope Analytics

  • SCREEN Holdings (7735 JP) could be added to a global index at the end of the month and there will be a lot of buying in the stock.
  • There is a fair bit of positioning for the potential passive buying and there will be supply in the stock.
  • However, the stock trades cheaper than its peers and a correction could provide an opportunity for long-term investors to enter the stock.

3. JSR (4185) – Updated Information in SUNY Lawsuit, and Other Developments

By Travis Lundy, Quiddity Advisors

  • 12 days ago, JSR Corp (4185 JP) announced that former research collaboration partner Research Foundation of the State University of New York had sued in an intellectual property ownership dispute.
  • I wrote about it here to the extent I could. Since then, more information has become available, or available to me.  Some details on the case. Some on lawyers. 
  • Since then JSR has reported earnings with unchanged forecast, and major pure play comp Tokyo Ohka Kogyo (4186 JP) today reported earnings; the stock popped 10+% to an all-time high.

4. MVIS Australia Equal Weight Index Rebalance Preview: Should I Stay or Should IGO?

By Brian Freitas, Periscope Analytics

  • The review period for the March rebalance of the MVIS Australia Equal Weight Index ends on 29 February with results announced on 8 March and implemented on 15 March.
  • Lendlease Group (LLC AU), IDP Education (IEL AU) and IGO Ltd (IGO AU) are very close to deletion zone and price moves over the next couple of weeks are important.
  • IGO Ltd (IGO AU) is also a deletion from a global index in February and a lower stock price could lead to deletion from this index too.

5. Renesas (6723 JP) To Acquire Altium (ALU AU) In a A$9.1bn Deal

By Brian Freitas, Periscope Analytics

  • Renesas Electronics (6723 JP) has entered a Scheme Implementation Agreement to acquire Altium Ltd (ALU AU) at A$68.5/share implying an equity value of A$9.1bn and an Enterprise Value of A$8.8bn.
  • The offer price is a 33.6% premium to the last close and a larger premium to VWAPs ranging from 30 days to 180 days.
  • There will be ad hoc inclusions to the S&P/ASX 100 Index and the S&P/ASX 200 (AS51 INDEX) on Altium Ltd (ALU AU)‘s last trading day (expected second half of 2024).

6. Renesas’ Transformative Offer For Altium

By David Blennerhassett, Quiddity Advisors


7. S&P/​​​​​​​​​ASX Index Rebalance Preview: Newmont Still Has Nearly A$1bn to Sell

By Brian Freitas, Periscope Analytics

  • With two days left in the review period, there could be 28 adds/deletes across the S&P/ASX family of indices in March.
  • There is nearly A$1bn to sell in Newmont (NEM AU) due to the potential S&P/ASX 20 Index deletion and a large decrease in the number of shares held in Australia.
  • There could be 2-41 days of ADV to buy in the index inclusions while the impact on the deletions will range between 0.7-24 days of ADV.

8. Outsourcing (2427) MBO Situation – Checking, and Thinking, and Noodling, and Speculating

By Travis Lundy, Quiddity Advisors

  • I got a bunch of questions about my Outsourcing comments yesterday in Outsourcing (2427) – Earnings Delay Causes Consternation
  • This piece is intended to clarify what I know (still limited), put parameters around what it might be, and draw lines in the sand which I might later erase.
  • This may be nothing. But it may not be. I will try to answer the questions I received in a kind of Q&A format, and I hope that helps.

9. MVIS Australia A-REITs Index Rebalance Preview: ASK Looks Like a Delete

By Brian Freitas, Periscope Analytics

  • The review period for the March rebalance ends in a couple of weeks. There could be one deletion from the index and a bunch of capping changes.
  • The index changes will lead to a one-way turnover of 2.2% resulting in a one-way trade of A$13m. There are two stocks with over A$3m to trade.
  • With market participants expecting lower interest rates, there has been short covering on a lot of the REITs in the last few months.

10. SET50 Index Rebalance Preview: Three Potential Changes in June

By Brian Freitas, Periscope Analytics

  • Early days, but there could be three changes for the Stock Exchange of Thailand SET 50 Index at the June rebalance. Two names are reversals of the December changes.
  • Passive trackers will need to buy between 1.5-3.6 days of ADV on the inclusions and sell 1.1-1.4 days of ADV on the deletions.
  • There are a couple of stocks that are close to passing/failing the liquidity tests and a couple close to cutoff ranks. That could result in further changes to the index.

Weekly Top Ten Macro and Cross Asset Strategy – Feb 18, 2024

By | Macro and Cross Asset Strategy
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.

Receive this weekly newsletter keeping 45k+ investors in the loop


1. USD inflation review: Powell has to invent a new measure..

By Andreas Steno, Steno Research

  • This is another heavy-hitting US inflation report and frankly the worst in a while.
  • The stickier components of the basket, including rents and transportation services came in smoking hot, and without substantial deflation in various core goods categories such as cars and apparel, this would have been an outright disastrous report for the Federal Reserve.
  • While we had the core goods part of the equation right, we had the re-acceleration of core services wrong.

2. Elections Likely to Hand a Decisive Mandate to Strongman Prabowo

By Prasenjit K. Basu, CrossASEAN Research

  • Prabowo, a controversial ex-general accused of human rights abuses in Jakarta and East Timor during Suharto’s era, looks likely to win the presidential election, with Jokowi’s son Gibran as running-mate. 
  • Gibran’s presence has shifted the parliamentary polls by 10pp in favour of Prabowo’s party, Gerindra, likely making it the largest at the expense of PDI-P– winner of all previous elections.
  • Post-Oct’24, policy is likely to become more mercurial, fiscally imprudent, growth- and inflation-oriented. Markets are likely to be turbulent after initial celebration of a decisive outcome. We urge caution. 

3. How Investable Is China (Revisited)

By Cam Hui, Pennock Idea Hub

  • We reiterate our view that long-term investors in China are likely to face subpar returns coupled with high volatility.
  • China hasn’t even tried to reverse the imbalances from long-standing past economic policies.
  • Real-Time market signals indicate further weakness in China, which investors should avoid. In the short run, the Chinese stock market looks washed out.

4. Bubbles & AntiBubbles

By Alfonso Peccatiello (Alf), The Macro Compass

  • Keynes once said that markets can stay irrational longer than you can stay solvent.
  • I love this quote because it speaks about the power of narratives, and my own humble readaption of that would be:‘‘Narratives can dominate macro longer than you can remain solvent’’.
  • This is why today we are going to cover the two strongest narratives out there: China is doomed; AI is the new revolution and US tech will dominate forever.

5. Ugly CPI Report Leaves Powell Less Room to Sound Dovish

By Jeroen Blokland, True Insights

  • Both US headline and core inflation came in higher than expected in January. Core inflation rose by 0.4% month-on-month, the strongest increase since last May. 
  • The real shocker, however, came from the Core Services excluding Housing CPI. The three-month annualized inflation rate spiked to 6.7%.
  • Although we have one more CPI report before the next FOMC meeting, the chance of a (temporary) correction in risky assets has increased.

6. EM Fixed Income: Emerging Markets Outlook & Strategy for February

By At Any Rate, At Any Rate

  • The global backdrop for the start of the year is better than anticipated, with a broad-based upturn in PMIs suggesting steady or even growing global and emerging market growth.
  • The US is experiencing some slowing in growth, but consumer demand is more solid, supported by strong labor markets and falling inflation.
  • China’s GDP growth is expected to remain around 5.5% in the near term, but there are concerns about ongoing deflation, housing market weakness, and its impact on corporate revenues and private sector confidence. Outside of China, emerging markets in Asia and Latin America are seeing growth rebound, driven by improvements in consumer and industrial sectors.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.


7. Steno Signals #86 – Trading the Relative Fed and ECB Balance Sheet Development

By Andreas Steno, Steno Research

  • I am sitting here on a Saturday evening (by the time of writing) waiting for the opportunity to say hello to the second junior analyst at home as my wife’s due date is approaching fast.
  • In between the frightening thoughts on how to deal with not only one but two diaper-wearing boys at home (myself excluded), I keep pondering why I receive so many questions on the timing of the first rate cut.
  • Is it really that important?

8. CPI Falls Again in China as Japanification Narrative Does the Rounds

By Rikki Malik

  • More deflation reported in China and the implications for markets
  • Chinese authorities keep pushing liquidity into the system and focusing on the stock market
  • Parts of the Chinese Economy not as bad as the doomsayers would have you believe

9. China Economics: “Japanification” in China and the New Low Growth Equilibrium

By Manu Bhaskaran, Centennial Asia Advisors

  • After decades of being described as an “economic miracle”, powerful structural drags are threatening to throw China down a medium-run equilibrium of low growth.
  • The economy will have to rely on weaker fundamentals in terms of demography, productivity and economic structure to carry it forward to the next stage of growth. 
  • Together with a more hostile global environment, China and the world will need to get used to structurally lower growth rates unless deep-seated reforms are completed.

10. The Week Ahead – Fed Meeting Minutes, Central Bank Meetings in Indonesia and Korea

By Nomura – The Week Ahead, Nomura – The Week Ahead

  • Global markets experienced a wobble following a stronger than expected US CPI inflation report, causing a spike in bond yields and a dip in equity markets.
  • The US CPI report breaks the trend of positive data and has implications for the Fed’s rate cut decisions. While inflation is expected to moderate this year, it will take several data points to confirm this.
  • The upcoming minutes from the January FOMC meeting will provide more details on the Fed’s thinking regarding rate cuts and adjustments to the pace of balance sheet rundown.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.


Weekly Top Ten Tech Hardware and Semiconductor – Feb 11, 2024

By | Tech Hardware and Semiconductor
This weekly newsletter pulls together summaries of the top ten most-read Insights across Tech Hardware and Semiconductor on Smartkarma.

Receive this weekly newsletter keeping 45k+ investors in the loop


1. Taiwan Tech Weekly: TSMC Sales Ahead; Display Driver Growth Reversal; AI Names Keep Flying

By Vincent Fernando, CFA, Zero One

  • Latest Performance: Taiwan AI Names Keep Flying; ASE & Mediatek Lose Steam After Reporting
  • Largest Display Driver Maker in the World’s Guidance Implies Growth Reversal Coming in Feb & March
  • TSMC and Samsung Will Keep Their Most Advanced Chipmaking at Home

2. Intel’s UMC Partnership Is A Big Deal. For UMC.

By William Keating, Ingenuity

  • UMC’s Q423 results in line with expectations. Q124 guidance, down 2-3% QoQ, demonstrates ongoing headwinds for foundry
  • Intel, UMC foundry partnership helps the latter overcome their 14nm issues while giving them bargain basement access to US manufacturing capacity 
  • If Intel could have developed and deployed the proposed 12nm specialty process on their own, they would have….

3. SMIC (981.HK): The GM Reaches a New Low of 9-11% in 1Q24F, Despite Revenue Growing by 2% QoQ.

By Patrick Liao

  • The 1Q24F outlook is still showing a decline, with a slightly increase in revenue of 2% QoQ. However, the GM is expected to decrease to 9-11% from 16.4% in 4Q23.
  • Management predicts that there will be a double U-shaped recovery in 2024F. Revenue in 2024F is expected to grow annually by mid-single-digit.
  • The main areas of growth for SMIC in 2024F will be in mobile phones, smart homes, IoT, and computing.

4. China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon

By William Keating, Ingenuity

  • Both SMIC & Hua Hong reported Q423 earnings in line with expectations and both guided Q124 flat to slightly down. SMIC expects FY24 mid single digit growth YoY.
  • The downturn has exposed inherent weakness in China’s Semi Foundry segment relative to peers as exemplified by the significant GM disparity
  • China’s two leading semi foundries have ~80% domestic dependence. Right now, that’s a headwind

5. Largest Display Driver Maker in the World’s Guidance Implies Growth Reversal Coming in Feb & March

By Vincent Fernando, CFA, Zero One

  • Novatek reported over 20% YoY growth for 4Q23 and slightly beat expectations but the latest guidance implies growth to reverse to a sales contraction in the latter part of 1Q24E.
  • Gross and operating margins are guided to contract; nevertheless, inventory dropped to one of the lowest levels since COVID and is expected to remain healthy.
  • Novatek’s latest results appear to signal that while inventory levels are healthy, the demand growth rebound for display drivers that started in June 2023E could lose steam in 1Q24E.

6. MonotaRO (3064 JP): Slowdown in the Price

By Scott Foster, LightStream Research

  • Annual sales growth has dropped from 20% or more in recent years to 12.5% in FY Dec-23. The operating margin ticked up last year, but is basically trending sideways.
  • The share price has dropped by 35% since April 2023, bringing the projected P/E ratio down to the bottom of its 10-year range. Buy back in for the long term. 
  • Guidance, which is usually accurate, is for 12.7% sales growth this year and an operating margin of 12.5%. Growth should continue in future years with flat or better margins.

7. KLA & LaserTec, AMD, Hyperscaler Capex, SK Hynix, SWKS and QRVO, WOLF, MCHP

By Douglas O’Laughlin, Fabricated Knowledge

  • KLA had a rare miss. The guidance was a bit light for the inspection execution machine.
  • KLA rarely misses and is by far the best financially managed of the large-cap semicap companies.
  • KLA reports Q2 EPS $6.16 ex-items vs FactSet $5.91

8. Novatek (3034.TT): It’s the Low Season in 1Q24F; AI Is Gradually Added to Different Applications.

By Patrick Liao

  • 4Q23 surpassed the guidance for revenue, GM, and OPM. 4Q23 EPS reached NT$8.76, compared to NT$10.46 in 3Q23 and NT$6.64 in 4Q22.
  • 1Q24F is typically the traditional low season for consumer electronics, and there are fewer working days during the Lunar New Year.
  • It is expected that the dividend payout ratio this year will be similar to previous years, which has been higher than 80% in the past few years.

9. Himax: Industry Readthrough for Automotives, Notebooks, and Edge AI Applications

By Vincent Fernando, CFA, Zero One

  • Readthrough: Automotive Applications End-Demand — China Market Soft But Touch and Dimming Technology is Expanding
  • Readthrough: Panel Makers Constraining Supply in 1Q24 to Protect Pricing
  • Readthrough: Customers Are Restocking Notebooks in 1Q24E, PC Replacement Cycle is Coming