This weekly newsletter pulls together summaries of the top ten most-read Insights across Tech Hardware and Semiconductor on Smartkarma.
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1. Micron. So Long Legacy & Hello There HBM, Data Center & Leading Edge
- Micron’s Q1F25 met expectations on key metrics but the ~9% downward guidance for the current quarter sent the share price into a tailspin
- Consumer-Related inventory issues and China competition were highlighted as the root causes for the surprise downward guide
- Micron is ok to cede legacy products to China competition and focus instead on the much more lucrative leading edge products, especially HBM. The transition could be rocky however
2. Memory Monitor: The Emerging Mass-Market Edge AI Need for Mobiles; Long Micron Vs. Short Nanya Tech
- Micron’s Latest Outlook Disappoints & Shares Fall; Decoupling Trade Between SK Hynix & Nanya Tech Has Worked However
- Smartphone AI Insights — On-Device Local Search & Context-Aware Interfaces Emerging as Key Local AI Needs
- Conclusion — Consider Swapping In MICRON as the Long Side of the Memory Decoupling Trade
3. Nvidia (NVDA.US): To Establish Offshore Headquarter in Taiwan.
- NVIDIA Corp (NVDA US) CEO Mr. Jensen Huang announced plans to establish an offshore headquarters in Taipei during his visit this June.
- From a geopolitical perspective, Taiwan is one of the focal points where the U.S. and China could potentially be in conflict.
- Focusing on AI, NVIDIA Corp (NVDA US) is currently attracting significant attention, but the decision to establish an offshore headquarters in Taipei is raising curiosity.
4. Hamamatsu Photonics (6965 JP): Rebound Ahead
- Profits and share price stabilizing after steep declines, although margins still under pressure from rising R&D and depreciation, and costs associated with recent acquisitions.
- Sales of medical equipment to recover from post-COVID decline. Semiconductor equipment driven by advanced logic and high-bandwidth memory. Lasers to become fourth major product division.
- Buy for the long-term. Risks include Trump tariffs, weak European economies, emergence of Chinese competition.
5. United Microelectronics: Key QCOM Advanced Packaging Win Signals Client Shift Away from TSMC
- UMC Secures Key Qualcomm Advanced Packaging Order; Breakthrough in High-Growth Chip Supply Chain Segment
- Why TSMC Remains Critical for QCOM Manufacturing, Yet UMC Provides a Strong Strategic Counterbalance
- UMC Must Prove Itself, but QCOM Win Sparks Optimism for Sentiment and Outlook Recovery — Maintain TSMC as Structural Long & Rate UMC as Outperform
6. The US-China Trade War Is Likely to Split the Semiconductor Industry into Two Groups.
- The US-China trade war has shaped a new trend: Advanced and Matured Technologies led by Taiwan Semiconductor (TSMC) – ADR (TSM US) and Semiconductor Manufacturing International Corp (SMIC) (981 HK) respectively.
- Notably, construction of semiconductor fabs in Singapore seems to be of lesser concern at the moment.
- The emergence of AI offers new hope, not only for advanced semiconductor technology but also for lagging technologies.
7. Taiwan Tech Weekly: Rapidus’s Challenge Vs. TSMC for 2nm; Hon Hai Hunting for Automaker Acquisition
- Rapidus vs. TSMC: Can Japan’s Newcomer Compete in the 2nm Race?
- Memory Monitor: The Emerging Mass-Market Edge AI Need for Mobiles; Long Micron Vs. Short Nanya Tech
- Hon Hai Pauses Nissan Pursuit Amid Honda Talks — A Japanese Savior for Nissan is Likely But This Confirms Hon Hai’s EV Ambitions Remain High
8. Taiwan Dual-Listings Monitor: TSMC ADR Spread Near All-Time Highs; UMC at Upper End of Range
- TSMC: +25.4% Premium; At Historical Highs, Good Level to Short the Spread
- UMC: +2.1% Premium; Upper Level of Historical Range, Short Level
- ASE: +5.4% Premium; Near-Term High However Likely Best to Wait for Higher Levels
9. Nidec (6594 JP): Acquisition of Makino Milling Would Add Value
- Nidec has announced its intention to acquire Makino Milling Machine (6135 JP) for ¥11,000 per share, a 42% premium over Thursday’s closing price.
- The stock market liked the idea. Nidec’s share price rose 4% on Friday. Makino’s jumped 19%. The pice looks high, but at 17.7x Makino’s EPS guidance, it is not unreasonable.
- The acquisition would be accretive to earnings and bring greater scale and competitiveness to Nidec’s machine tool business. It should support our Buy recommendation.
10. SK Hynix(000660.KS): Insisting on HBM Technology and Continuing to Surpass Samsung in Net Earnings
- SK Hynix (000660 KS)‘s key turning point is its dedication to developing High Bandwidth Memory (HBM) technology, which has finally paid off.
- In the third quarter of 2024, SK Hynix (000660 KS) continued to surpass Samsung Electronics (005930 KS) net earnings based on their financial results.
- Samsung Electronics (005930 KS) is reportedly exploring partnership opportunities with Taiwan Semiconductor (TSMC) – ADR (TSM US) in the realm of HBM, aiming to strengthen its ties with NVIDIA.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
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1. Minieye Technology IPO: Valuation Multiples Appear Justified Given Top-Line Growth of 30%+
- Minieye Technology, a fast-growing provider of intelligent driving and cabin solutions in China, will price its IPO this week.
- The company was backed by CICC Capital, Beijing Siwei, Shenzhen Zeyi, and Mr. Wu Yongming, the current CEO of Alibaba, among others.
- IPO valuation multiples appear justified given the company’s top-line growth of 30%+ and full-stack in-house R&D capabilities.
2. 2024 Greater China Logistics & Transport ECM Review & A Look at Potential 2025 Deals
- 2024 ECM offerings in the Greater China logistics & transport segment included TS Lines (in Hong Kong), SF Holding(Hong Kong), and BingEx (US)
- Generally, recent share offerings in the segment have not performed well at all
- Looking to 2025, we see several deals, including SHEIN and a possible Didi return
3. Pre-IPO Duality Biotherapeutics – Has the Potential to Surpass RemeGen
- Founder Zhu Zhongyuan is a key figure in biotech landscape.So, when Duality first started its entrepreneurial financing, the process was smooth and the starting point of Duality was not low.
- The R&D progress of Duality’s pipelines is slower than competing candidates, so they would be in a passive position after market launch. So, Duality’s valuation would be lower than Kelun Bio.
- Duality’s pipeline still has “good stories” to tell. There’s a chance its valuation could be higher than RemeGen, whose business model/investment logic have been falsified due to weak sales data.
4. Calendar Effects Trading Strategy: Combining TOY and Santa Rally Effects for Enhanced Returns
- Calendar effects in equity markets have persisted despite widespread knowledge of their existence.
- Combine the Turn-of-Year (TOY) effect with the Santa Rally phenomenon systematically
- The trading approach historically generates 1.4-2.0% returns over a 7-day period, with a win rate of 75% since 2000.
5. China Healthcare Weekly (Dec.29) – Haier Biomedical Plans to Merge with and Absorb Shanghai RAAS
- Haier Biomedical plans to merge with and absorb Shanghai RAAS through the issuance of shares, and both parties have signed a letter of intent for the potential merger.
- Haier’s acquisition of RAAS helps connect the software and hardware of the blood industry and strengthen the company’s dominant position in the entire industry chain in the blood products industry.
- The market value/financial performance of these two are far apart. If the acquisition is completed, it will help Haier improve financial performance, which is obviously more beneficial for Haier.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.
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1. Japan: Potential Passive Selling in February
- Currently, 9 stocks could be deleted from global passive portfolios in February. The deletion will lead to liquidity events where trackers will need to sell multiple days of ADV.
- There has been a buildup on shorts on few stocks with minimal positioning in the other stocks. That could change once the calendar ticks over to 2025.
- Kokusai Electric (6525 JP) is a potential inclusion to the Nikkei 225 (NKY INDEX) in March and this deletion could provide liquidity to enter a position ahead of that announcement.
2. Honda (7267 JP) – MAMMOTH New ¥1.1Trln Stock Buyback
- Today, along with the announcement of Memorandum of Understanding between Honda Motor (7267 JP), and Nissan Motor (7201 JP) to work towards negotiating a Joint Holding Company by June 2025…
- Honda cancelled their existing ¥100bn buyback, and initiated a truly mammoth NEW Buyback – up to 1.1 billion shares (23.7% of TSO), spending up to ¥1.1trln on market through Dec-2025.
- Assuming the stock pops, it is probably “only” worth 15-18%, but that’s still a LOT. At that rate it boosts BVPS by 8+% on its own, and EPS by 17%.
3. KOSPI Size Indices: Overlap Between Global Passive Selling & Downward Migrations
- The review period for the March rebalance of the KOSPI Size Indices commenced on 1 December and will end on 28 February.
- A quarter of the way through the review period, we forecast 37 migrating stocks. Among new listings, 1 could be added to LargeCap, 3 to MidCap and 2 to SmallCap.
- Four downward migrations were deleted from a global index in November. Now, three more downward migrations could be deleted from the same global index in February.
4. Korea: Potential Relegations from K League 1
- There are quite a few stocks in Korea that have underperformed their peers and could be deleted from global passive portfolios in February.
- There are still 3 weeks left for the stocks to redeem themselves and avoid relegation from the K League, so watch out for big price moves.
- Based on our estimate of passive assets, trackers will need to trade between US$45m to US$114m of the stocks. Impact will vary between 2.6x-30x of ADV to trade.
5. LG CNS IPO: Limited Float Pushes Back Passive Buying
- LG CNS (LGCNSZ KS) is looking to raise up to KRW 1,199bn (US$830m), valuing the company at KRW 6 trillion (US$4.15bn) at the top end of the IPO price range.
- As a member of the IT sector, inclusion in the KOSPI200 Index will only take place via Fast Entry (near impossible) or as a large-scale company.
- Inclusion in global indices could commence in September 2025 and will be easier if the identity of the pre-IPO minority shareholders is disclosed or if the strategic investors sell.
6. [Japan Activism] Exedy (7278) – Murakami-San Selling into the Buyback
- Exedy Corp (7278 JP) announced a big buyback. Murakami-san did not sell the first pop. The shares fell. Exedy started buying back and the shares went up. Now Murakami’s selling.
- Today after the close, Murakami Group companies announced that City Index Elevens had started selling. They sold 1.25% of shares out in 6 trading days to 16 December.
- I expect they sold another 2% in the past week through today. Shares tanked today. This is not a good signal. And it comes earlier than I expected.
7. Nidec Goes Hostile On Makino Milling at ¥11,000/Share
- This morning, Nidec Corp (6594 JP)announced that it intended to launch a Tender Offer on Makino Milling Machine Co (6135 JP) without the support of Makino management.
- The same pattern as Takisawa Machine Tool (6121 JP). Nidec decides, relying on the METI Guidelines for Corporate Takeovers for procedure, announces, and puts the onus on the Target to accept.
- But shareholders should hope Makino Milling takes a page from the example provided by Chilled & Frozen Logistics Holdings (9099 JP) back in spring 2024. This could get funky.
8. NEC Networks (1973 JP) Next To Last Showdown – NEC Lowers Minimum, Bumps Tiny, Ignores Synergies
- On Friday, NEC Corp (6701 JP) raised the price for its Tender Offer on Nec Networks & System Integr (1973 JP) from ¥3,250 to ¥3,300.
- It also lowered the minimum to 10.153mm shares (6.82%). It had proposed to do so earlier but NESIC demanded a bump, and NEC didn’t want to.
- Now it’s bumped. That’s the “final price.” But it still does not include “a fair allocation of a portion of the value that cannot be realised without an acquisition.”
9. GA Pack (468 HK): The State of Play
- On 20 December, Shandong Xinjufeng Technology Packaging (301296 CH) satisfied the precondition for its Greatview Aseptic Packaging (468 HK) offer. The offer document will be despatched by 27 December.
- Analysing the EGM vote on 18 October suggests that the 50% minimum acceptance condition will be met if no competing management offer is made.
- Management will oppose the offer, but the last EGM protest votes suggest that many minorities will ignore management. At the last close, the gross/annualised spread was 2.3%/25.3%.
10. Henlius (2696 HK): Interesting Shareholder Movements with the Vote on 22 January
- Shanghai Henlius Biotech (2696 HK)’s IFA opines that Shanghai Fosun Pharmaceutical (Group) (2196 HK)’s HK$24.60 offer is fair and reasonable. The vote is on 22 January.
- The key condition is approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection). There are recent movements in H Share substantial shareholders.
- Key shareholders should be supportive of the cash/scrip offer. At the last close and for a 15 February payment, the gross/annualised spread is 2.9%/16.9%.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. EM Fixed Income: ‘Tis the Season for Volatility
- The discussion focused on the importance of politics over economics for emerging markets in 2025, with a specific emphasis on fiscal trajectories.
- Lessons learned include the need to expand imagination of possible scenarios, the impact of specific country situations on returns, and the caution against following consensus trades.
- Market outlook for early 2025 is expected to be choppy and driven by policy announcements, with a key event being the US Inauguration Day on January 20th leading to potential market adjustments.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
2. San Francisco Fed President Mary Daly Explains the ‘Hawkish Cut’
- The Federal Reserve recently cut interest rates by 25 basis points, unveiling new year expectations for inflation and economic growth.
- San Francisco Fed President Mary Daly discusses the current state of the labor market, the impact of AI on productivity, and the importance of data and evidence in making policy decisions.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
3. Infrastructure mini-series Ep 2: The Low-Carbon Transition: A $100 Trillion Infrastructure Opport…
- Global transition to low carbon economy discussed in the second episode of the Infrastructure miniseries
- Key areas of investment include electrification, renewable power plants, electric vehicle charging stations, and clean fuels
- Importance of public and private investment in infrastructure to enable energy transition and decarbonization, with a focus on long-term growth opportunities like data centers and mining infrastructure
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
4. NPS: Portfolio Rebalance Could Lead to Buying At Least 25 Trillion Won in Korean Stocks in 2025
- In 2025, the NPS could purchase significant amounts of Korean stocks (at least 25 trillion won) which could act as support in the domestic stock market.
- At the end of September 2024, NPS’s domestic stock portfolio was 12.7% of its total assets, a 2.2% lower than NPS’s domestic stocks target at the end of 2025 (14.9%).
- The top five net purchases by the NPS and local pension funds of Korean stocks in the past one month include Samsung Electronics, Kakao, SK Innovation, Hyundai Motor, and SEMCO.
5. Global Monetary Easing Cycle Becomes More Idiosyncratic
- The Swiss and Canadian central banks cut their respective policy rates by 50 basis points. The former faces currency appreciation and deflationary risks. Canada faces higher unemployment and deteriorating growth.
- The European Central Bank is taking a gradual policy easing path in 2025. Policy outlooks for the Reserve Bank of Australia and Bank of England are more data dependent.
- The Fed cut its policy rate by 25 basis points as expected, but fewer reductions are now expected in 2025 due to a more robust economic outlook compared to September.
6. Steno Signals #177 – Another ill-timed flip-flop from Jay Powell?
- Happy Sunday from me! This will be the last update before the festive season, and I hope you will have a relaxed and enjoyable time with your loved ones.
- It has been a big year for me personally with the launch of Asgard-Steno Global Macro.
- Despite Powell pulling the rug from under the Christmas rally, we are off to a decent start and expect to deliver strong returns in choppy markets in 2025, where the macro direction will be challenged by several factors.
7. The Darker Side of the Hindenburg Omen
- Current market conditions are characterized by a strong S&P 500 that’s near its all-time high and weak breadth.
- The closest template to these circumstances is August 1972, which is just before the final Nifty Fifty top.
- As the market undergoes its inevitable bounce due to oversold conditions, investors should monitor technical conditions for negative divergences, which could be the signal for a long-term cyclical top.
8. Equity Return Expectations Under An Alien Invasion
- We are subscribers to Occam’s Razor, or the simplest explanation is the most satisfactory, and recent UFOs sightings are of terrestrial origin.
- It’s nevertheless a worthwhile exercise to consider asset return expectations under the scenario of an extra-terrestrial alien invasion.
- Our study of an alien invasion opens the door to discussing return studies. Standard assumptions about returns to bonds and equity risk premiums are useful only up to a point.
9. Here is what we told hedge funds this week – and how we’re trading it!
- Happy Friday! Every week, we dive deep into macro trends, analyze asset movements, and uncover the best value plays in the world of macro.
- These insights are shared with hedge funds and institutional clients, and each Friday, we’re bringing them directly to you.
- While the macro landscape can be complex, we believe it doesn’t have to be intimidating.
10. Three Presidents in One Month in South Korea – What’s Next?
- The acting South Korean President Han Duck-Soo was impeached by the South Korea’s Parliament on 27 December. Choi Sang-Mok (finance minister) is now the new, acting President of South Korea.
- There could be multiple impeachments of acting Presidents in the next several weeks which would be unprecedented and raise further concerns about the lack of political stability in South Korea.
- Amid all this political uncertainty, Yoon Suk-Yeol’s approval rating has been improving sharply to more than 30%.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Tech Hardware and Semiconductor on Smartkarma.
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1. Mediatek: Google Reportedly Dropping QCOM & Adopting Mediatek for Pixel 10 Modem; Structural Long
- Report — Google Drops QCOM, Shifts to MediaTek for Pixel 10’s 5G Modems
- Strong “Double” Indication for Mediatek’s Competitiveness — Combined with Recent Reports that Mediatek Won Apple to Provide Modems for the Apple Watch
- Mediatek’s Opportunity to Deliver a Big Win for Google; Maintain Our Structural Long Rating for Mediatek.
2. Taiwan Tech Weekly: Apple’s TSMC 2nm Power Move Beats Samsung; Himax Ascends with TSMC/Nvidia Halos
- Apple’s 2nm Power Move with TSMC — Beating Samsung Yet Again
- Why TSMC’s 2nm Will be Huge — Extending Tech Lead vs. Samsung & Major AI/Power Consumption Benefits for Customers
- The Memory Decoupling Trade is Working — Nanya Tech Underperforms SK Hynix
3. TSMC (2330.TT; TSM.US): 2025 Could Achieve 25% Yearly Growth.
- We anticipate Taiwan Semiconductor (TSMC) – ADR (TSM US) can achieve a 25% growth in 2025.
- It is unsurprising for TSMC to dominate in AI, including the assembly and testing segments.
- Chinese companies are also involved in AI, but there hasn’t been a recent spread as a result of U.S. sanctions.
4. General Motors Abruptly Pulls The Plug On Cruise
- GM announced it will no longer continue to fund its loss making Cruise subsidiary, effectively ending its RoboTaxi ambition. Market reaction? Nothing.
- Microsoft has already announced it will write off its $800 million investment made back in 2021 when Cruise was valued at $30 billion
- Root cause? The tsunami that was triggered by Cruise’s botched response to an accident in October 2023.
5. Taiwan Dual-Listings Monitor: TSMC Spread at Short Level; UMC and CHT Short Interest Spikes
- TSMC: 22.7% Premium; Good Level to Short the Spread Given Historical Trading Range
- UMC: +0.2% Premium; Middle of Historical Trading Range; Short Interest Rises to New High
- CHT: +0.5% Premium; Major Spike in Short Interest for the Local Taiwan Shares
6. MediaTek (2454.TT): Google Pixel 10 Will Use MediaTek’s Modem
- Alphabet (GOOGL US) Pixel 10 will use the Mediatek Inc (2454 TT) T9000 modem.
- The shipment quantity to the smartphone market is small, and we see this as a small triumph for Mediatek Inc (2454 TT).
- Samsung Electronics (005930 KS) is facing a 3nm process issue and lacks the capacity to support its own smartphone CPU Exynos 2400.
7. Scaling Laws Meet Economics, but Adoption is still Accelerating
- Technological model scaling is not dead, but we are clearly at a critical moment when the definitions will shift.
- Pre-training, the original scaling law, might hit its first diminishing return. The piece SemiAnalysis used the analogy that pre-training was like the end of Dennard’s law.
- However, multi-core scaling led to another decade of scaling transistors. Technology progresses, just not in the same way.
8. Intel (INTC.US): Exploring a Tough Journey.
- Regardless of the circumstances, Intel Corp (INTC US) must select a new CEO and hope that a new strategy will turn the situation around.
- A possible decision to spin off Altera could signal the possibility of Intel further breaking into several parts.
- For the near term, Intel must overcome financial and management challenges, and laying off 1/10 of its workforce is a short-term and necessary step.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
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1. Kioxia IPO Trading – Decent Demand for Decent Upside
- Kioxia Holdings (285A JP) raised around US$800m (including over-allocation) in its Japan IPO, after pricing its IPO in the middle of its range.
- It was the world’s largest pure-play NAND flash memory supplier, in terms of both revenue and unit shipments in 2023, according to TechInsights.
- We have looked at the company’s past performance and valuations in our previous notes. In this note, we will talk about the trading dynamics.
2. 2025 (“Year of the Snake”) IPOs Pipeline in Asia
- In this insight, we provide a list of 70 prominent companies in Asia that could complete their IPOs in Asia next year.
- This is a comprehensive, REFERENCE GUIDE to help clients so that they could get a broad view of the major IPOs that could get completed in Asia in 2025.
- Some of the most prominent potential IPOs in Asia next year include Reliance Jio, LG Electronics India, Shein, Sony Financial Group, Didi Global, and Okada Manila.
3. 2025 IPOs Pipeline (USA, Europe, and the Middle East)
- In this insight, we provide a list of 70 prominent companies in the USA, Europe, and the Middle East that could complete their IPOs in 2025.
- This is a comprehensive, REFERENCE GUIDE to help clients so that they could get a broad view of the major IPOs that could get completed in these regions in 2025.
- Some of the most prominent potential IPOs in these regions next year include Starlink, SpaceX, Stripe, Open AI, Klarna, Five Holdings, Monzo, and Ethiad Airways.
4. Shenzhen Dobot IPO (2432.HK): Global Offering, The Rising Star of Collaborative Robotics
- Shenzhen Dobot, a CICC-backed robotics unicorn, aims to raise up to HK$830M (~$107M) in the initial public offering in Hong Kong.
- The offering is expected to be between HK$18.80 and HK$20.80, implying a market cap of ~HK$8B or ~$1B at the midpoint of the price range.
- Given Shenzhen Dobot’s long-term growth opportunities and high TAM, they are likely to get a premium valuation, and the company could trade like UBTech Robotics and Doosan Robotics.
5. ECM Weekly (16th Dec 2024) – LG CNS, Mao Geping, Digico, Kioxia, Vishal Mega, IGI, Sai Life, Quantum
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, a number of offerings were live in India, in a bid to beat the year-end lull.
- On the placements front, there was a large placement for SenseTime Group (20 HK) and a number of smaller deals in India.
6. LG CNS IPO: The Bull Case
- LG CNS (LGCNSZ KS), the IT service unit of LG Corp (003550 KS), seeks to raise up to US$837 million through a primary/secondary offering.
- In 2020, Macquarie Asset Management bought a 35% stake from LG Corp for KRW950 billion, beating KKR & Co (KKR US), the other shortlisted bidder.
- The bull case rests on an attractive market, improving visibility, strong AI-led growth, below-peer average dependence on related parties, and top-tier profitability.
7. Pre-IPO Xunfei Healthcare Technology (PHIP Updates) – Profitability Are Always the Pain Points
- Medical industry characteristics are the seriousness of diagnosis/treatment and the irreversibility of the process, which are the difficulties in implementing technology. The value that AI can provide is limited.
- Xunfei’s business model is not To C, but To G (government) model. It’s not possible for SOE customers to pay high price for Xunfei’s AI model/products, leading to questionable profitability.
- Pre-IPO valuation has reached RMB8.4 billion. Without sustainable growth and stable profitability, valuation/liquidity of Xunfei after listing wouldn’t be good. We think Xunfei’s valuation could be similar to Yidu Tech.
8. Vishal Mega Mart IPO Trading – Strong Demand Despite Not so Strong Anchor
- Vishal Mega Mart (VMM) raised around US$950m in its India IPO.
- Vishal Mega Mart Limited (VMM), is a one-stop retail destination. As per the company it targets middle and lower-middle income consumers across India
- We have looked at the company’s past performance and valuations in our previous notes. In this note, we will talk about the trading dynamics.
9. Inventurus Knowledge Solutions IPO Trading: Decent Anchor Quality and Strong Subscription Results
- Inventurus Knowledge Solutions (IKSINCD IN) raised around US$295m in its India IPO.
- IKS is a technology-enabled healthcare solutions provider, assisting physician enterprises in US, Canada and Australia, with a core focus in the US.
- We have looked at the company’s past performance and valuations in our previous notes. In this note, we will talk about the trading dynamics.
10. IGI (India) IPO Trading – Decent Anchor and Strong Overall Demand
- International Gemmological Institute (India) raised around US$500m in its India IPO.
- IGI India is part of the International Gemmological Institute (IGI) group. As of 22nd August 2024, IGI India handled operations of the IGI business in India and Türkiye.
- We have looked at the company’s past performance and IPO valuations in our previous notes. In this note, we talk about the trading dynamics.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Event-Driven and Index Rebalance on Smartkarma.
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1. How Has the Index Rebalance Strategy Performed in 2024?
- It has been a decent year for the index rebalance strategy, though there have been some big hiccups along the way.
- Forecasting the index changes and impacts has been important, but timing (especially momentum/value regime changes) and hedge selection have also been major factors affecting the returns of the strategy.
- As passive AUM continues to increase, we expect focus on the strategy to continue in 2025 with market players taking different approaches to trading the potential and announced index changes.
2. TIP Customized Taiwan Select High Dividend Index Rebalance: US$3.2bn Trade with BIG Impact
- There are 8 changes a side for the TIP Customized Taiwan Select High Dividend Index in December. The TIP Taiwan Select High Dividend ETF (00919TW) has an AUM of US$9.3bn.
- Estimated one-way turnover is 17.2% and that will result in a round-trip trade of US$3.2bn. All adds and deletes have over 5x ADV to trade from passive trackers.
- The rebalance will be implemented over 8 trading days and the ETF started trading some stocks late last week and the rest from 17 December.
3. HSCI Index Rebalance Preview and Stock Connect: Potential Changes in March 2025
- We see 32 potential and close adds and 44 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.
- We expect 29 stocks to be added to Southbound Stock Connect following the rebalance while 31 stocks could be deleted from the trading link and become Sell-only.
- There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.
4. PCOMP Index Rebalance Preview: Two Changes Likely in February
- The review period for the February rebalance of the Philippines Stock Exchange PSEi Index (PCOMP INDEX) ends in two weeks.
- There could be two changes for the index with passive trackers needing to trade between 23-64x ADV in the stocks.
- The passive buying is a lot larger than the passive selling, there will be funding outflows for the other index constituents; some stocks will have over 1x ADV to trade.
5. MV Global Junior Gold Miners Index Rebalance: Big Flow in Some Stocks
- No constituent changes for the VanEck Vectors Junior Gold Miners ETF (GDXJ US) in December. But there are a lot of float and capping changes.
- Estimated one-way turnover is 2.6% resulting in a round-trip trade of US$269m. There are 8 stocks with over 1x ADV to trade from passive trackers.
- Stocks with the largest flows are Evolution Mining, Pan American Silver, Westgold Resources, B2Gold, Alamos Gold, Harmony Gold Mining, Eldorado Gold, K92 Mining, IAMGOLD, Endeavour Silver and Emerald Resources.
6. Sony To Buy 7+% Stake in Kadokawa (9468 JP) For ¥50bn, Ending Near-Term Hopes of Takeover
- Today, Kadokawa (9468 JP) announced it would sell ¥50bn of shares to Sony (6758 JP) in a 3rd Party Allotment to cement a Strategic/Capital Alliance. Sony will own 10% at ¥4,146/share.
- 40% of proceeds is to “create and develop new IP”, 60% is to “enhance global IP distribution”; both over 5yrs. Given ¥108bn of net cash/securities, this is a garbage reason.
- Kadokawa shares have gained 44% in a month since Reuters carried an “Exclusive” article saying Sony was in talks to acquire Kadokawa. This is defensive entrenchment. The result will disappoint.
7. A Passive Flow Trading Event that Sparked Wild Price Action in Korea Is Happening Again
- This event drew significant attention, causing unusual price action. From Sept 20 to Nov 29, corrections in the deletions far outpaced the KOSPI, with the trend holding across key checkpoints.
- We’re watching 4 stocks: Kumho Petro, Lotte Chemical, Posco DX, and EcoPro Materials. SK Bioscience and Enchem are close, with small price moves likely pushing them out.
- Based on past rebalancing patterns, proactive positions on these names could trigger strong price action. All except Enchem have listed futures and solid volume, making trading conditions favorable.
8. KRX Value-Up Index Rebalance Results and Estimated Passive Impact
- KRX updated the Value-Up Index with five new names: KB Financial, Hana Financial, KT Corp, SK Telecom, and Hyundai Mobis, with Mobis replacing JB Financial, surprising the market.
- This is the first rebalancing, packed into one day, so expect notable price action. Reverse moves could also follow Thursday as pre-positioned trades unwind, so monitor price action closely.
- Even after Thursday’s rebalancing, half of the funds, especially from the National Pension Service, will flow into high-yield stocks, likely driving significant price moves through early next year.
9. 7&I (3382 JP) – Share Price Dipping Deeper Means Dipping Toes Deeper
- Seven & I Holdings (3382 JP) shares are in a lull here. Winter doldrums without news as the Ito consortium gets its ducks in a row and 7&i sells York.
- Alimentation Couche-Tard (ATD CN) is waiting patiently. They have the ability to wait, and to fund, and pay up.
- An article/show is causing a dip today on top of last week’s weakness. This is a dip to buy.
10. SET50 Index Rebalance: Four Changes; Cal Comp🚀
- There will be 4 changes for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) at the close on 30 December.
- All changes are in line with our forecasts and there appears to be positioning in all the stocks.
- Cal Comp Electronics Thailand (CCET TB) will have the largest passive buying a percentage of free float and could be the stock to watch.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Macro and Cross Asset Strategy on Smartkarma.
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1. 2025 High Conviction Idea: The Case for a Rotation Out of India into Hong Kong – Part 1
- Risk reward favours this shift in allocation between these markets.
- Short to mid-term concerns on the Indian market warrant this strategic change
- Slowing revenue growth and less government spending leading to decelerating profits which is not yet reflected in market multiples
2. The Drill – The China Meltdown Is Ruining the Upbeat Trends in Manufacturing
- Happy Tuesday, and welcome back to our weekly commodity editorial, where we keep you updated each and every week on what’s going on in the world of commodities, energy, and the like!
- It’s hard to talk about commodities without talking about China these days, as we have seen a complete reversal in the Chinese macro scene after we scouted last week for the best commodity plays should the Chinese stimulus come through.
- After all, they used the same wording as they did back in 2008, and it was wise of markets to “cry wolf,” as China would need to publish actual stimulus plans and their size before markets chased the story.
3. A Hindenburg Omen in an Oversold Market
- What happens when an ominously sounding Hindenburg Omen occurs when the market is oversold? The notoriously unreliable Omen is said to have called “ten of the last three market corrections”.
- The market’s reaction to the FOMC decision added to the risk-off market tone. The Fed marked down the number of 2025 quarter-point rate cuts from four to two.
- Four of the five components of our Bottom Spotting Model have flashed buy signals. Two or more simultaneous buy signals have been good long entry points for traders.
4. Steno Signals #176 – Will 2025 be 2007 or 2021 all over again?
- Welcome to my weekly editorial, where I assess the big-picture macro landscape, explore potential risks, and identify the next narrative for traders.
- Last week, I kept getting pings, rings, and dings from traders eager to discuss whether inflation is poised to make a comeback following the fourth consecutive hot inflation report in the U.S. Admittedly, we’re trending around 3.5% inflation on an annualized basis, which doesn’t look great amidst a cutting cycle.
- Consequently, the market has started repricing the inflation outlook, with the near-term (2-year) outlook once again outpacing the 10-year inflation outlook in inflation swaps.
5. Positioning Watch – Everything you need to know about Fixed Income positioning before we enter 2025
- Hello everyone, and welcome back to our weekly positioning update – this week with a strong focus on the moves we are seeing in Fixed Income and forward-pricing at the moment and the subsequent positioning as we head into 2025.
- Markets continue to lean bearish on the Eurozone while upbeat on the US in equity terms, and likely for good reasons as macro data hasn’t given any good arguments as to why one should be upbeat on the Eurozone, and the signs we are getting on European growth in our nowcasts have yet to show up in actual releases – for now, it’s mainly the less China sensitive countries like Spain, Portugal and Greece that are performing macro-wise while Germany, France and Italy suffer.
- GDP growth is surprisingly strong in the first 3 whilst very weak in the latter 3, and given the latter’s weighting in European equity indices, it makes sense why we are seeing hedge funds being long consumer staples, health care and other defensives while scaling down bets on cyclical equities.
6. Walker’s Weekly: Dr. Jim’s Summary of Key Global Macro Developments – 20 Dec 2024
- US and China treasury yields highlight inflation control challenges, with the Fed’s rate cut fueling market uncertainty.
- Asia’s mixed monetary decisions saw Japan hold rates, while the Philippines’ cuts worsened currency pressures.
- China’s retail sales remain resilient despite lower growth expectations, contrasting with declining real sales in the US.
7. Speadbites: Food for Credit Market Thought as We Head Into the Holidays
- Global credit ecosystem remains stable, similar to 2024 outlook
- Tight spreads and low all-in yields support demand in credit markets
- Concerns about non-cash accrual companies in private credit portfolios and potential impact on risk distribution from public to private markets, but overall sentiment remains positive for credit markets.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
8. T.R.U.M.P | Dec 19, 2024
- According to Webster the word of the year is Polarization.
- Oxford have Brain Rot and Cambridge have Manifest. Collins have Brat, which was apparently ‘made famous by a Chari XCX album’ (me neither).
- Personally, just as Cozzy Livs (cost of living) was my favourite in 2023, this year really deserves to be ‘Word Salad’, although without Kamala it is unlikely to reappear anywhere near as much.
9. Thailand: Policy Rate Held At 2.25% (Consensus 2.25%) in Dec-24
- The Bank of Thailand unanimously maintained the policy rate at 2.25%, aligning with consensus expectations, citing alignment with economic potential and inflation within target expectations.
- Economic growth projections for 2024–2025 remain steady, but uneven sectoral recovery, particularly in manufacturing and SMEs, presents ongoing risks to sustainable recovery.
- Global economic uncertainties, credit growth trends, and the efficacy of government debt-relief programmes in supporting domestic demand and financial stability will influence future policy decisions.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
10. Monday Macro: Bumper Crystal Ball Time, Plus the US Equity Bulls Are Still Rampaging
- Over the last week, the FTSE ALL World equities index stalled slightly, losing 0.8% in value, with the FTSE ALL Share index losing a tad more, down a smidgeon under 1%.
- Tech stocks again outperformed, sending the Nasdaq 1.5% higher and taking the index to over 20,000 for the first time ever.
- The S&P 500 edged 0.5% lower, and the Russell 2000 ended the week 2% down. The Magnificent 7 hit new highs as the market-broadening trend evaporated.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Tech Hardware and Semiconductor on Smartkarma.
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1. Taiwan Tech Weekly: TSMC 2NM Yield Jump Rumors; Seeing Taiwan’s Starlink Alternative Firsthand in KS
- TSMC’s N2 Progress Sparks Buzz Amid Yield Improvement Rumors; If True Then 2nm Will Become Even More Successful Than 3nm
- Hon Hai & TASA Showcase Homegrown Space Technologies Including an Alternative to Starlink
- Himax: Buyback Program Lifts Shares; Auto Display Controllers, AR Displays & WLO for AI Progressing
2. Intel Ex-CEO Calls For 24 Hours Of Prayer & Fasting For Intel’s Remaining 100k Employees
- Pat Gelsinger took to X to invite us to join him in 24 hours of “praying and fasting” for Intel’s 100k employees to help them navigate “this difficult period”
- This is an unprecedented move never before seen in the semiconductor world, albeit we suspect that IBM may have dabbled in something similar to resurrect their 2nm process prowess
- This coming Thursday is the proposed date. Don’t expect miracles, this could take until the following Monday for the full impact to manifest itself in terms of share price appreciation
3. Taiwan Dual-Listings Monitor: TSMC Spread At Decent Short Level; UMC Short Interest Rises Again
- TSMC: +23.5% Premium; Decent Level to Short Relative to Historical Trading Range
- UMC: +0.1% Premium; Middle of the Historical Trading Range; Short Interest Rises Again
- ASE: +3.5% Premium; Near Middle of Recent Range, Wait for Better Levels
4. AMD’s Lisa Su Named Time CEO Of The Year
- AMD’s Lisa Su has been honoured as Time’s CEO of the year, a fitting tribute to a leader who pulled off what many thought to be impossible
- Despite flawless execution and carving out a brand new $5 billion market segment within AI Acceleration, AMD’s share prices is down 44% from its 52 week high
- AMD will ultimately face headwinds from Arm but, for the time being, their growth will come from continuing to take market share from Intel and building on their Instinct platform
5. Himax: Buyback Program Lifts Shares; Auto Display Controllers, AR Displays & WLO for AI Progressing
- Last Week: Himax Buyback Program Announced; Likely a Strong Use of Cash
- Himax Strengthening Automotive Display Leadership; Progress with Korea Display Companies
- Himax LCOS Microdisplay Technology Deepening Entrenchment in Designs of Major AR Glasses Players — Maintain Structural Long Rating.
6. Mediatek: Apple Watch Win Highlights Smartwatch Market Opportunity; Apple Supply Chain Breakthrough
- Mediatek’s Apple Watch Win Highlights Smartwatch Market Opportunity; Breakthrough Into Apple’s Supply Chain
- MediaTek’s Role in Apple Watch Connectivity; Mediatek’s TSMC Relationship to Provide a Lasting Advantage
- Mediatek Rallied But Remains Below Highs; Significant Upside Remains — Maintain Structural Long
7. MediaTek (2454.TT): D9400 Success Will Extend into 2025. Prepare to Re-Qualify IPad and IWatch.
- Although the outlook for 1Q25 might be somewhat negative, we believe that it is a reasonably typical result.
- We understand that MediaTek did not succeed in qualifying its Apple iPad and iWatch CPUs originally, but we believe it is now preparing for a re-qualification process.
- Looking ahead to 2025, we anticipate a more favorable outlook for MediaTek.
8. Nidec (6594 JP): India & Nvidia Point the Way Forward
- Shipping the first water-based cooling systems for servers equipped with Nvidia’s new Blackwell GPUs and building two new motor factories in India.
- Moving beyond excessive dependence on China while restructuring operations to reduce costs. Sales short of 1H guidnce, but operating profit up.
- Share price down 30% since May and close to its 52-week low. Selling at 17.5x this fiscal year’s EPS guidance, the lowest P/E multiple in a decade.
9. Intel. Laser Focus & No More Meaningless Life-Time Value Foundry Deal Updates
- Laser focus, transparency and adoption of a “say do” approach to measuring success are now the order of the day at Intel
- Data Center roadmap not in good shape and if IFS can’t deliver, MJ won’t hesitate to outsource DC products to TSMC alongside existing Client products.
- Gaudi is not a mass market product, Falcon Shores won’t be great either but we will listen, learn, iterate and fail quickly. Watch out NVIDIA !
This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
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1. Sanrio (8136 JP): The Current Playbook
- Since the announcement of the US$840 million secondary offering, Sanrio (8136 JP)’s shares have been down 3.9% from the undisturbed price of JPY5,160 per share (26 November).
- It is instructive to look at recent large Japanese placements to understand the potential trading pattern. So far, Sanrio’s shares have followed the pattern of previous large placements.
- The offering will likely be priced on 10 December. The average large Japanese placement tends to generate positive returns.
2. Paradigm Biopharmaceuticals (PAR AU): Fund Raising Amidst Pipeline Progress Raises Conviction
- Paradigm Biopharmaceuticals (PAR AU) has requested a trading halt to the ASX pending an announcement in relation to a capital raising. Normal trading will resume on Monday, December 9, 2024.
- Assuming quarterly cash burn rate of A$7M, Paradigm’s cash balance should provide a runway through mid-Q3FY25. The company is in a dire need to raise fund.
- With lead drug being in late-stage trial and having huge market potential, Paradigm seems to be an attractive biotech investment opportunity. Recently, optimism is growing surrounding Paradigm’s lead drug candidate.
3. Vishal Mega Mart IPO – Showcasing the Wrong Peers, Somewhat Limited Upside
- Vishal Mega Mart is planning to raise around US$950m through its upcoming IPO in India.
- Vishal Mega Mart Limited (VMM), is a one-stop retail destination. As per the company it targets middle and lower-middle income consumers across India
- We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.
4. Mao Geping Cosmetics IPO Trading – Highest Demand for This Year
- Mao Geping Cosmetics raised around US$345m in its Hong Kong IPO.
- Mao Geping Cosmetics (MGC) operates in the premium beauty segment. Operating via its two brands, MAOGEPING and Love Keeps, MGC offers a wide range of color cosmetics and skincare products.
- We have looked at the company’s past performance in our previous notes. In this note, we will talk about the trading dynamics.
5. IGI (India) IPO – Unique Exposure but Questionable Acquisition, and 4x Returns for PE in 18 Months
- International Gemmological Institute (India) Limited (IGII) is looking to raise about US$500m in its upcoming India IPO.
- IGI India is part of the International Gemmological Institute (IGI) group. As of 22nd August 2024, IGI India handled operations of the IGI business in India and Türkiye.
- In this note, we will look at the company’s past performance and talk about the IPO valuations.
6. LG CNS IPO Valuation Analysis
- According to our valuation analysis, it suggests a base case implied market cap of 7.9 trillion won for LG CNS, representing target price of 81,095 won per share.
- Therefore, our base case valuation target price of 81,095 won is 31% higher than the high end of the IPO price range.
- We estimate LG CNS to generate sales of 5.99 trillion won (up 6.8% YoY) and net profit of 356.1 billion won (up 7.1% YoY) in 2024.
7. ECM Weekly (9th Dec 2024) – Goodman, Auckland Airport, Kioxia, MNC, DIY, Vishal Mega, Mao Geping
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, the deal flow doesn’t seem to be slowing down much into the year end. The coming two weeks will see some of the past IPOs listing.
- On the placements front, Goodman Group (GMG AU)‘s block trade was hogging all of the limelight this week.
8. LG Electronics India IPO Preview
- LG Electronics India is getting ready to complete an IPO in India in the next several months. The IPO offering size is expected to be about US$1.8 billion.
- LG Electronics (066570 KS) plans to sell 101.8 million shares, accounting for about 15% of the post-offer paid up equity capital shares of LG Electronics India.
- If LGEI is valued at US$13 billion, then an 85% of this stake would be worth US$11.1 billion, which would be worth more than LG Electronics’s own market cap.
9. 2025 (“Year of the Snake”) Major IPOs Pipeline in Korea
- This is our 10th “Annual Edition of the Major Korean IPOs Pipeline Preview” at Smartkarma.
- This insight will feature 50 of the biggest potential IPOs in Korea in 2025.
- These 50 IPOs in Korea are likely to represent more than 80% of all capital raised through IPOs in Korea next year.
10. LG Electronics India Pre-IPO Tearsheet
- LG Electronics (066570 KS) is looking to raise US$1.5bn+ via part-selling its stake in LG Electronics India IPO. The deal will be run by MS, JPM, Axis, BofA and Citi.
- LG Electronics India (LGEI) was the market leader in India in major home appliances and consumer electronics (excluding mobile phones) in terms of volume in 1Q25, as per Redseer Report.
- LGEI has been the number one player in this industry for 13 consecutive years (CY11-CY23) as per the value market share in the offline channel in India, as per Redseer.