This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
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1. Guming Holdings IPO – Digestible Valuation from the Bottom End
- Guming Holdings (GUM HK) is looking to raise US$202m in its Hong Kong IPO. Guming Holdings (Guming) sells freshly-made beverages in China.
- Guming Holdings (Guming) sells freshly-made beverages in China. Guming focuses on the mid-priced freshly-made tea beverage market with product prices typically ranging between RMB10-18.
- In this note, we discuss our thoughts on valuation at the IPO price range.
2. LG CNS IPO: Trading Debut
- LG CNS (LGCNSZ KS) priced its IPO at KRW61,900 per share to raise gross proceeds of US$820 million. The shares will start trading on 5 February.
- We previously discussed the IPO in LG CNS IPO: The Bull Case, LG CNS IPO: The Bear Case and LG CNS IPO: Valuation Insights.
- Since the prospectus’s release, the peers have marginally re-rated. The valuation remains undemanding at the IPO price, and bullish grey market prices suggest a strong debut.
3. Guming Holdings (1364 HK) IPO: Valuation Insights
- Guming Holdings (GUM HK) (Good me), a freshly-made tea store brand, has launched an HKEx IPO to raise up to US$202 million.
- We previously discussed the IPO in Guming Holdings (Good Me) IPO: The Bull Case and Guming Holdings (Good Me) IPO: The Bear Case.
- There are five cornerstone investors. Our valuation analysis suggests that Guming is attractively valued at the IPO price range. Therefore, we would participate in the IPO.
4. LG CNS IPO Trading – Demand Aided by Domestics, Limited Lockup Undertaking
- LG CNS (LGCNSZ KS) raised around US$825m in its Korea IPO. LG CNS is a South Korean information technology company.
- LG CNS is a South Korean information technology company. The firm primarily provides comprehensive digital transformation services and solutions backed AI, big data, and cloud.
- In this note, we will talk about the demand for the deal and other trading dynamics.
5. LG CNS: First Day Trading Strategy Post IPO
- In this insight, we discuss the first day trading strategy of LG CNS which starts trading on 5 February.
- On the first day of trading, we believe LG CNS’s shares could trade at higher levels, overshooting its intrinsic valuations.
- We recommend investors to take some profits off the table if the share price shoots higher by 30% to 50%+ from the IPO price on the first day.
6. Guming IPO: The Good, The Bad and The Valuation. Is It Time to Sip or Skip?
- Guming Holdings (GUM HK) is offering 158.6 million shares in a price range of HK$8.68 to HK$9.94 in its Hong Kong IPO aiming to raise up to HK$1.58 Bn.
- Despite outperforming peers in revenue and profit growth, Guming is grappling with a bleak macro environment, operational slowdowns, and intensified competition.
- Guming Holdings (GUM HK) ‘s faltering operating metrics for last reporting period cast doubt on its near-term growth and profitability outlook—leaving investors to ask: Sip or skip?
7. ECM Weekly (3rd Feb 2025) – Seoul Guarantee, Dr Agarwal’s, Ather Energy, Hexaware, Visen Pharma
- 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, we had a look at the valuations for Dr. Agarwal’s Eye Hospital and Seoul Guarantee Insurance (031210 KS).
- On the placements front, given the holiday shortened week, there were no placements this week.
8. Trump Admin’s Tariff Headlines Obscure Suspension Of “De Minimis” Rule | Big Impact on SHEIN, Temu
- By executive order, President Trump suspended section 321 (“de minimis“) imports on Feb 4th
- Direct-To-Consumer imports valued at < US$800 may no longer enter the US duty-free
- Added cost and new paperwork burden (both borne by US consumers) to hit SHEIN, Temu
9. Whirlpool of India OFS Early Look – Another Large Selldown by Parent
- Whirlpool Corp (WHR US) is looking to raise about INR 46bn (US$530m) from selling a stake of about 31% in Whirlpool of India Limited (WHIRL).
- In an announcement released on Jan 30, 2025, the firm mentioned its ultimate parent’s intention to sell down its interest in WHIRL from 51% to 20% by mid-to-late 2025.
- In this note, we talk about the past deal performance and other deal dynamics.
10. Guming Holdings (Good Me) IPO Preview
- Guming Holdings (1364 HK) (Good Me) is getting ready to complete its IPO on the Hong Kong Exchange in February.
- At the high end of the IPO price range, the listing will raise about HK$1.58 billion (US$220 million).
- Guming is a ready-to-drink beverage company specializing in freshly made tea beverages.
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. India: Potential Free Float Changes & Passive Flows in February
- Companies in India have disclosed their shareholding pattern as of end-December in January. There are companies with significant float changes from end-September and/or end-June.
- The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
- Depending on the date that the shareholding was published, there could be 13 stocks with passive inflows from global trackers while 4 could see passive outflows in February.
2. FXI ETF: Potential Changes in the Year of the Snake
- There could be 1/2 changes to the iShares China Large-Cap (FXI) (FXI US) in March. Then there will be more changes as large Chinese companies list H-shares on the HKEX.
- Fast Entries and regular inclusion of newly listed H-shares will change the characteristics of the FXI and there could be further deviations from the Hang Seng China Enterprises Index (HSCEI INDEX).
- That will provide opportunities for index rebalance traders as well as volatility traders that are active on the iShares China Large-Cap (FXI) (FXI US) options.
3. Taiwan’s Yageo (2327 TT) Announces Hostile Tender on Shibaura Electronics (6957 JP) – I Have 🍿🍿
- Today, Taiwanese passive components maker Yageo Corporation (2327 TT) announced its Board had approved the launching of a Tender on Shibaura Electronics (6957 JP).
- It turns out YAGEO approached them in October, Shibaura stonewalled for 3mos, required an NDA to meet, and refused to budge. METI Corporate Takeover Guidelines were likely ignored.
- This could set off a flurry of activity including competition, an auction, promises of dividends, and who knows what. It will be exciting but it’s not C&F.
4. Barito Renewables Energy (BREN IJ): Global Index Inclusion Likely This Month
- Barito Renewables Energy (BREN IJ) stock has gone through a series of gyrations as index inclusion was announced and then retracted due to the concentrated holding of the stock.
- With pre-IPO PE/VC investors selling some stock, the increase in float could result in the inclusion of Barito Renewables Energy (BREN IJ) in a global index later this month.
- The inclusion of the stock in the index will require passive trackers to buy just over 400m shares of the stock. That is over 14x ADV and will be impactful.
5. STAR50/STAR100 Index Rebalance Preview: One Is Meh; The Other Is👍
- With the review period complete, we forecast 3 changes for the SSE STAR50 (STAR50 INDEX) and 8 changes for the STAR100 Index. There are a few migrations between the indices.
- We estimate turnover of 3.8% for the SSE STAR50 (STAR50 INDEX) and 9.9% for the STAR100 Index. The estimated net round-trip trade is CNY 13bn (US$1.8bn).
- The forecast adds to the STAR50 INDEX have underperformed the forecast deletes. For the STAR100 Index outright changes, the forecast adds have outperformed the forecast deletes by a lot.
6. Kyocera (6971) – Changes Policies – Will Sell KDDI Faster and Buy Back Shares
- Today, in conjunction with the release of Q3 earnings, Kyocera Corp (6971 JP) announced a change in its Corporate Governance Code doc, a change in Cross-holding Policy, and Buyback Policy.
- Full-Year earnings guidance revision was non-salutary. Revs -1%, OP -69%, Net Profit -72% vs previous predictions from 30 October (those were -1.5%, -38.2%, -36.6% vs April guidance at the time).
- Based on this disappointment, they announced they would speed up the sale of crossholdings and buy back shares this year and over the following three years.
7. KOSPI200 Index Rebalance Preview: 6 Potential Changes in June; LG CNS Listing Could Increase That
- Halfway through the review period, there could be 6 changes for the Korea Stock Exchange KOSPI200 (KOSPI2 INDEX) in June. The LG CNS (LGCNSZ KS) listing could increase that number.
- The impact on the potential inclusions ranges from 2.1-26 days of ADV while the impact on the potential deletions varies from 5-11 days of ADV.
- The forecast adds have outperformed the forecast deletes over the last few months and the performance gap is near its widest point.
8. KRX New Deal Index Rebalance Preview: Smaller Deal Than Usual
- The review period for the March rebalance ended on 31 January, changes will be announced first week of March and implemented at the close of trading on 13 March.
- We forecast two changes for the Bio Index and one change for the Internet Index. Plus there will be capping changes for all indices.
- The largest flows will be in Samsung SDI, LG Energy Solution, POSCO Holdings, Alteogen, Naver Corp, Legochem Biosciences, Netmarble and Celltrion Inc.
9. Osaka Steel (5449) Large Buyback At a Discount Ruins Fun For Activists
- Osaka Steel (5449 JP) is 65% owned by Nippon Steel Corporation (5401 JP). They make a relatively simple set of steel products used by shipbuilders, construction companies, and warehouse builders.
- Activist Effissimo Capital went over 5% in October 2016 and is still a top holder. Activist Strategic Capital went over 5% in December 2023 and now owns 10+% of votes.
- The “hope” had been that Nippon Steel buy out minorities and Osaka Steel would be rescued from mediocre capital returns. That was not to be. Activists are disappointed.
10. Korea: 11 Potential Index Deletions in February
- There are 11 stocks (maybe 12) in Korea that could be deleted from a global index in February and that will result in large selling from passive trackers.
- With announcement in a week and implementation in just over 3 weeks, there is positioning in a lot of the names.
- With short selling still banned, positioning will not be as high as the passive selling and the stocks could still drop over the next few weeks.
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. Marko Kolanovic Is Back With a Warning for Stocks
- Recent tech stock sell-off causing market volatility
- Limited contagion to broader market, some stocks even up
- Potential for more impact as uncertainty around DeepSeek continues
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2. Steno Signals #183 – The Pain Trade is a Weaker USD, While China Could Surprise on the Upside
- Happy Sunday, everyone, and welcome to our weekly editorial on all things macro.
- Everyone I’ve spoken to today has asked me, “How would you go long the USD at the Wellington open?” That, in itself, says a lot about sentiment.
- I’m currently making my way home from the U.S. after meeting with a ton of investors over the past three days, and I’ve come away with the view that a weaker USD is now the pain trade.
3. The Tariff Effect: Economic Uncertainty Unpacked | The New Barbarians #006
- Equities opened down, with futures showing a decline across various markets
- January saw significant gains in gold and Bitcoin, outperforming equities
- European stocks surged 8.2% in a month, surprising many investors and challenging traditional market outlooks
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4. The Tariff Announcement That Shocked Financial Markets
- Trump announced 25% tariffs on Canada and Mexico, 10% tariffs on oil and China
- Tariffs are paid by US consumers at the point of entry, not fully equating to a 25% price increase
- Uncertainty about impact of tariffs on prices of goods like maple syrup and avocados
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5. Can the Stock Market Vigilantes Save the Bull?
- The current environment suggests that traders should adopt a strategy of “buy the dip and sell the rips”.
- The combination of negative surprises during earnings season and potential bearish policy announcements when the market is overbought will put downward pressure on stock prices.
- On the other hand, investors should trust the stock market vigilantes to activate the Trump Put in the event of a market downdraft.
6. China-U.S. Trade War Next To Talks?
- Negotiating will likely start in spring, but negotiating will be tough as the U.S. wants a phase 2 deal with new objectives to boost U.S. exports and penalties
- China will likely be quick to make concessions on needed agricultural imports and illegal Fentanyl from China, but slow to concede on the idea of penalties.
- It will be a volatile road to an eventual deal in late H1 or early H2.
7. A Long-Term Sell Signal?
- Breadth indicators are flashing early cautionary signals for U.S. equities, but these signals can often be early in calling a major market top.
- A review of other indicators on different investing dimensions are either benign or cautious.
- We interpret this as the warning of a possible major market top in Q1 or Q2. Investors should monitor risk appetite indicators for tactical signs to turn cautious.
8. The Drill – Oil down and precious metals UP.. The short USD trade in Geopolitics
- Welcome to this week’s The Drill, which I will be authoring by myself moving forward.
- This means a continued focus on commodities and energy, but also an increased dosage of geopolitics as many of you have wished for.
- Each week, we’ll cover a couple of key topics as well as provide you with a sneak peak into our data models and what they have to say on commodities.
9. Global FX & Equities: Dollar/ equity linkages and the upcoming tariff announcement
- Concerns about the end of US equity exceptionalism could lead to potential weakness in the dollar
- Deepseek model challenges US exceptionalism in tech and could impact equity markets
- Despite volatility, US equity market still strong, but potential for more bouts of volatility ahead
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10. The Week That Was in ASEAN@Smartkarma – Alfamart’s Guidance, Indonesia’s Pragmatism, and Thai Banks
- The past week saw insights on Sumber Alfaria Trijaya (AMRT IJ, SLB Development (SLB SP), Japfa Ltd (JAP SP), Hyphens Pharma International (HYP SP), and Bund Center Investment (BTE SP).
- There was also a macro insight on Singapore, an Indonesia Strategy Insight, and a bank screener looking at Thai Banks from Victor Galliano.
- The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated substantive, and actionable insights, macro and equity bottom, from across Southeast Asia.
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. DeepSeek R1. Ahem, This Is Awkward..
- DeepSeek’s R1 is a game changer that’s taken the world by storm. It’s a fantastic accomplishment by a Chinese team and a huge endorsement of the open source approach
- US competitors have egg on their faces now, but they will adapt. Competition is always a good thing & the future of AI just got a whole lot brighter
- Last night’s selloff was a Chinese New Year gift. Just accept it. Happy CNY to all!
2. Taiwan Tech Weekly: How Apple Helped TSMC Become #1; Also Morris Chang Comments on TSMC ADR Premium
- PC Monitor: Snapdragon’s Surge, AMD’s Gains, Intel’s Test; Long Asus & Dell
- Memory Monitor: Is DeepSeek a Problem for SK Hynix & Micron’s HBM DRAM Growth?
- TSMC (2330.TT; TSM.US): Earthquake Impact Limited; Setting Newest Production Line Not Viable in US.
3. Memory Monitor: Is DeepSeek a Problem for SK Hynix & Micron’s HBM DRAM Growth?
- SK Hynix Expects 100% HBM Revenue Growth in 2025E After a Massive 2024 — Which Means Traditional DRAM Doesn’t Matter as Much Anymore
- DeepSeek Market Fears — A Problem for HBM & Enterprise SSD Memory?
- AI Industry Opportunities Are Not a Fixed Size Pie — Will DeepSeek Impact HBM DRAM TAM? Why We Don’t Think So
4. PC Monitor: Snapdragon’s Surge, AMD’s Gains, Intel’s Test; Long Asus & Dell
- Recent U.S. Market Weakness Appears to Have Been More Focused on Falling Sentiment for Server Businesses, Not PCs
- CES 2025 Showed Qualcomm Chips Gaining Momentum in PCs, While AMD Continued Aggressive Competition — Intel Under Pressure
- PC Maker Universe to Experience Decent Revenue Growth in 2025E — Structural Long Asustek & Dell
5. Taiwan Dual-Listings Monitor: Dramatic Spreads Open Up After DeepSeek Rout & Taiwan Market Closure
- TSMC: 10.8% Premium; Taiwanese Investors Likely to Be Less Shocked by DeepSeek News?
- UMC: -7.3% Discount; The Latest Extreme Discount Cannot Be Sustained
- ASE: -10.2% Discount; This Extreme Discount Also Cannot Be Sustained
6. ASML. Strong Finish For 24, Robust Outlook For 25 With AI As Key Growth Driver
- ASML reported Q424 revenues of €9.3 billion, marginally above the high end of the guided range, up 24% QoQ and up 28.5% YoY.
- Full year 2024 revenue amounted to €28.3 billion, up 2.7% YoY and a modest improvement on the previously forecasted zero growth
- Guided full year 2025 revenues to be in the $30-$35 billion range, representing a 15% YoY increase at the midpoint.
7. Apple Supply Chain Monitor: Latest AAPL Results — Taiwan Suppliers Well Placed for Monday Re-Open
- Apple 1Q25 Results — Overall Price-Supportive for Taiwan Supplier Share Prices When the Taiwan Market Re-Opens Monday
- Why Zhen Ding Technology Holding (4958 TT) and Kinsus Interconnect Tech (3189 TT) Could Be in a Favorable Position Relative to Apple’s AI Trajectory
- Increasingly sophisticated Apple products require significantly more complex PCBs & interconnect solutions, especially as advanced packaging has become a key enabler of high-performance computing.
8. Semiconductor’s Over-Dependency on AI
- A new AI platform named DeepSeek threatens today’s Large Language Model status quo
- Certain chip companies have become over-dependent on AI, including Nvidia, Samsung, SK hynix, and Micron, and their stock has tumbled
- It’s too early to tell what will occur over the long term
9. Intel Q424. It’s A Journey, Not A Destination
- Q424 revenues of $14.3 billion which was $500 million above the guided midpoint, down 7% YoY but up 7.5% QoQ.
- Forecasted Q125 revenues of $12.2 billion at the midpoint, down $500 million YoY and down 15% QoQ
- Transition to EUV abysmally slow, Falcon Shores cancelled, Clearwater Forest delayed, GMs will see some improvement or mixed improvement in 2026.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
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1. Dr Agarwal’s Healthcare IPO – RHP Updates & Quick Thoughts on Peer Comp and Valuation
- Dr Agarwal’s Health Care Ltd (8140044Z IN) is looking to raise about US$350m in its India IPO. The deal is downsized from an earlier reported size of around US$480m.
- Dr Agarwal’s Health Care is a healthcare/hospital chain in India providing eyecare services, including surgeries; consultations, diagnoses, non-surgical treatments; and sells opticals, contact lens, accessories and eyecare related pharmaceutical products.
- Previously, we have looked at the company’s past performance. In this note, we provide a summary of its RHP updates and share our quick thoughts on peer comparison and valuation.
2. Infinity Natural Resources (INR): Sector Sentiment Sours, Exercise Caution on IPO
- While this company is well-positioned in its sector and has a prudent growth strategy and balance-sheet flexibility, the short term “sector winds” are now blowing in a different direction.
- Venture Global (VG) debuted last Friday with a major price cut and a more disappointing debut.
- Our sources state that the official message regarding the deal is that the offering is multiple-times oversubscribed from long-only and energy-dedicated funds.
3. SailPoint IPO Valuation Analysis: Paying Debt With IPO Proceeds and $1B+ ARR in FY26
- SailPoint, a founder-led provider of identity security for the modern enterprise, aims to raise up to $1B to pay off debt.
- The company ended last quarter at $813M of implied ARR and I see a clear path to $1B+ ARR in FY26 ended Jan 30, 2026.
- I believe SailPoint may consider IPO at valuation above take-private transaction of ~$6.9B in 2022. The company is expected to go public in February.
4. Maze Therapeutics Inc. (MAZE): Kidney Disease Biotech IPO Garnering Attention from Sector Investors
- The company is performing an abbreviated four-day roadshow and has gained momentum with interest from sector-dedicated investors.
- According to our sources, the deal was considered oversubscribed at launch from a mix of new and existing investors.
- Typically, the biotech IPOs that are eager to come out of the gates in January have fared overwhelmingly better than those that trickle out later in the year.
5. SGIC IPO Valuation Analysis
- Our base case valuation of Seoul Guarantee Insurance is target price of 32,463 won per share, which is 2.1% higher than the high end of the IPO price range.
- All in all, we are not particularly impressed with SGIC’s lack of top-line sales growth and worsening operating profit and margins in 1Q-3Q 2024.
- Despite the much lower IPO price range and a promise for higher shareholder returns, we remain Negative on this IPO.
6. ECM Weekly (27th Jan 2025) – CATL, HDB Financial, Dr Agarwal’s, Eco-Shop, Vikran, Sanil, Timee
- 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, we had a look at the possible A/H listing for Contemporary Amperex Technology (CATL) (300750 CH), along with a few large IPOs in India .
- On the placements front, while there weren’t any large deals launched, we did look at the lockup expiry for Timee Inc (215A JP) and Sanil Electric (062040 KS).
7. Smithfield Foods, Inc. (SFD): Price Sensitivity Emerges in Another IPO
- Sources have stated that the deal is experiencing “pushback” from the buy-side on the price.
- Fresh on the mind of IPO investors is the underperforming energy deal, Venture Global (VG)
- Price sensitivity in the deal is a stark signal to exercise caution on this IPO at this time
8. Doosan Enerbility: Thoughts on the IPO of Doosan Skoda Power
- Doosan Skoda Power is getting ready to complete an IPO on the Prague Stock Exchange. The IPO is aiming to gather up to 2.53 billion crowns, or about US$105.5 million.
- Post IPO, Doosan Power System plans to maintain a 67% ownership. Doosan Enerbility (034020 KS) owns a 100% stake in Doosan Power Systems.
- If Doosan Skoda Power is valued at 8.3 billion crowns and if we annualize the company’s net profit to 473 billion in 2024, this would suggest a P/E of 17.5x.
9. Smithfield Foods Inc (SFD): IPO Opens with Heavy Selling Pressure, Closes Below Issue
- The company priced a downsized transaction of 26.08mm shares (down from 34.8mm) at $20.00 (original range $23-$27) and opened at $21.05 for a gain of 5.3% at first trade.
- A broken IPO usually hurts the psyche of the IPO market in the short term.
- The healthcare space will be looking to give IPOs a boost during the second half of the week with much stronger deals set to debut.
10. Metsera Inc (MTSR): Obesity Drug Biotech Order Book Is “Hot”; Set for Friday IPO Debut
- The GLP-1 market has experienced a recent boom and Metsera is capitalizing on this with a well-times IPO.
- According to our sources, the deal is well-oversubscribed with the books closing Wednesday at 4pm for a Friday debut.
- The company is seeking a mega valuation of$1.8b if priced at the high-end of the range. An IPO valuation at these levels would put the company in “rare-company”.
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. Fast Retailing (9983) Capping Decision This Week – Single or Double Dose?
- Unless Fast Retailing (9983) underperforms Nikkei 225 by 10% by Friday close, there will be a capping exercise at the next Nikkei 225 Rebalance at the end of March 2025.
- The evolution of tech stock movement in Japan in the next day or three is important to watch. There will be effects.
- The setup very near-term could be pretty interesting, and worth watching.
2. Guotai Junan/Haitong Sec Merger: The Many Index Flows Around the Corner
- Haitong Securities (H) (6837 HK) and Haitong Securities (A) (600837 CH) shares will stop trading after 5 February following the merger with Guotai Junan Securities (2611 HK).
- There will be small buying in Guotai Junan Securities (2611 HK) at the close on 5 February and there should be more buying in the A-shares and H-shares in March.
- There will also be a stock added to the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) to bring the number of index constituents back to 300.
3. Fast Retailing (9983 JP): Double Capping & The Reverse Funding Trade
- With 3 days left in the review period, Fast Retailing (9983 JP) has a 11.29% weight in the Nikkei 225 (NKY INDEX). That means double capping in March.
- If Fast Retailing (9983 JP) underperforms the other index stocks by 1.8% from now to the close on 31 January, there will only be a single level of capping.
- Double capping will result in big selling on Fast Retailing (9983 JP) and big inflows into the other index constituents. Smaller impact for single level capping.
4. Sigma Healthcare (SIG AU): Shareholders Approve Merger; Passives Could Start Buying in Two Weeks
- Sigma Healthcare (SIG AU) and Chemist Warehouse (CWG) shareholders have approved the merger with 99.86% and 100% of the votes cast in favour.
- The Second Court Hearing is on 3 February and the merger will be implemented on 12 February, which is when the passive buying could commence.
- Sigma Healthcare has continued to trade higher on a record margin and sales expansion for CWG and expected passive buying that could top A$3bn over the next few months.
5. 3D Launches Partial Tender Offer on NTT UD REIT (8956)
- Seemingly out of the blue, Singapore-based activist investment fund 3D Investment Partners has launched a partial tender offer at a small premium on NTT UD REIT Investment Corporation (8956 JP).
- 3DIP currently owns 2.2% and at maximum, will own 15.00% of the REIT units outstanding less treasury units. It intends to own the units for “pure investment purposes.”
- “Shareholder” structure is different for J-REITs vs companies. And this J-REIT has an interesting future possibility. But…
6. Solactive Global Uranium & Nuclear Components Index Rebalance: DeepSeek Led Selloff & 1 Delete
- Solactive has announced the constituent changes for the Global Uranium & Nuclear Components Index. There is only 1 delete with implementation at the close on 31 January.
- As expected, GoviEx Uranium (GXU CN) will be deleted from the index and there will be a bunch of capping changes, especially for non-pure play stocks.
- Estimated one-way turnover is 5.8% resulting in a round-trip trade of US$386m. There are many stocks with multiple days of ADV to trade.
7. Indian Renewable Energy (IREDA IN) QIP: Index Implications
- IREDA has announced a Qualified Institutional Placement (QIP) of a maximum of INR 50bn as long as the Government of India’s holding does not drop by more than 7%.
- There will be passive buying at the time of settlement of the QIP shares while the increase in float will bring the stock closer to inclusion in another global index.
- With the stock close to index inclusion level and down 37% from its peak, there could be positioning in the stock for passive inflows.
8. PCOMP Index Rebalance: AREIT, CBC to Replace NIKL, WLCON
- As forecast, Areit (AyalaLand REIT) (AREIT PM) and China Banking (CBC PM) will replace Nickel Asia (NIKL PM) and Wilcon Depot (WLCON PM) in the Philippines Stock Exchange PSEi Index.
- Passive trackers will need to buy between 14-44 days of ADV in the adds while selling between 17-54 days of ADV in the deletes.
- The stocks have already moved a lot over the last few months and positioning has built up over that period. There could still be outperformance ahead of the passives trading.
9. Global Foods Creators (7559) – Another Stupidly Cheap MBO With Rigged DCF
- Today after the close, Global Food Creators (7559 JP) announced that the CEO would sell his 1.23% of the company into an MBO by a company he set up.
- The family company which owns 27%, and he would fund the takeover of the other 73% with 1% equity taken from his share sale, and 99% bank loans.
- The TOB is at 0.65x book for a cash-rich company. Liquidate the cash and the rest is being taken over at 0.33x book. Aaaaargh.
10. EQD | DeepSeek’s New AI: Price Supports and Broader Implications for META, NVDA, S&P 500, Nasdaq 100
- News that DeepSeek’s latest AI release appears to be superior to latest OpenAI’s ChatGPT in most (if not all) of the benchmark tasks have apparently shaken markets today.
- DeepSeek may be able to beat its competitors (including other AI developed by other US companies like Meta Platforms (META US) ), using lower cost chips and less data.
- Tech companies like NVIDIA Corp (NVDA US) are falling hard (like -12%) in pre-market, and so are the US Indices. Let’s see where support for reversal rallies can be found.
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. How Oaktree’s Howard Marks Spots a Market Bubble
- Howard Marks correctly called the dot com bubble in the early 2000s
- The 1990s were a placid period for credit investors but a hot time for equity investors
- Being too far ahead of your time in predicting market trends can be painful and indistinguishable from being wrong
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2. Steno Signals #182 – Cutting Through the Trump Noise: A Massive Uniform Move Is Happening
- Happy Sunday, and welcome to my weekly editorial on everything macro and markets.
- We are now at the final innings of the inauguration week, and oh boy did it surprise and entertain right about everyone (including me).
- From full-blown tariffs from the get-go being the base case, a Trump meme coin being launched into the week and a government sponsored Bitcoin reserve (or at least a clear reference to the crypto space during his first week) to barely any mentioning of crypto, no immediate tariffs on China and very accommodative policies on the fiscal side, which makes the 3% deficit target proposed by Scott Bessent look unrealistic at best.
3. Ep. 252: Jay Pelosky on How US Equities Could Underperform Rest of the World
- Jay Peloski, founder of TPW Advisory and former top-ranked analyst at Morgan Stanley, discusses the tripolar framework of regional integration and competition between Europe, Asia, and the Americas
- Europe faces challenges with common taxation and revenue creation, Asia is increasingly integrated around China, and the Americas have not fully leveraged North America integration and engagement with South America
- Regional competition is seen in key areas such as AI, climate, and defense, with each region vying for economic influence and competitive advantage amid global shifts and challenges
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4. Generative AI, LLMs, & the Evolution of Product Teams w/ Dr. Thársis Souza | The New Barbarians #005
- Mark has 15 years of experience delivering new technology products in a variety of companies and holds a PhD in Computer Science from UCL University of London
- He is the author of the book Taming LLMs and the creator of Podcastify AI
- Mark recapped recent events in the markets, discussed taming LLMs and creating robotic podcasts, and highlighted the success of Bitcoin ETFs
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5. The Drill: The commoditization of AI is here
- Let’s start with DeepSeek.
- The trajectory toward singularity may be accelerating faster than previously forecasted.
- With barriers to entry for AI development rapidly lowering and efficiency gains fueling greater demand rather than less, it seems inevitable that this trend will reshape the AI landscape.
6. Overview #14 – The Emperor Has No Clothes Moment
- A review of recent events/data impacting our investment themes or outlook
- The narrative change around US tech spending on AI has potentially positive implications for Chinese technology shares
- India sets the stage for interest rate cuts and the budget cuts taxes for the middle classes to boost consumption
7. EM Fixed Income Focus: What we know (or don’t) after Week 1
- EM markets reacting to executive orders and remarks from President Trump, particularly focused on tariffs
- EM currencies have shown some strength due to lack of tariff implementation so far
- Market relief since the inauguration, but uncertainty remains around tariff policy and other domestic issues
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8. Mexico faces a deficit – and Donald Trump
- President Claudia Sheinbaum took office in October, inheriting a delicate economic situation from her popular predecessor Andres Manuel Lopez Obrador.
- Many lower income people in Mexico are benefiting from higher wages and government social programs, but others, particularly middle and higher income earners, feel stagnant economic growth and uncertainty due to US tariff threats.
- The relationship between Mexico and the US, along with Sheinbaum’s plans and the ability to attract outside investment, will be key factors in Mexico’s economic growth under her leadership.
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9. Get Ready For Another Shock to Housing Affordability
- Inflation, particularly in housing costs, has been a big theme in recent American life.
- Despite the Fed raising interest rates to fight inflation, rent price growth has been moderating.
- Multifamily housing developers are feeling the strain of higher interest rates and a lack of supply due to decreased activity in the market.
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10. The Shift Of Supply Chains From China To Southeast Asia
- China’s rise as a global manufacturing hub was fueled by WTO accession in 2001, supported by export-friendly policies, low-cost labor, and rapid infrastructure development.
- A 1994 currency devaluation and a shift to value-added goods boosted productivity as labor costs increased.
- Since the mid-2010s, rising costs and geopolitical factors have driven supply chains to Southeast Asia.
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. UMC. Now I’m Interested…
- UMC reported Q424 revenues of NT$60,386 million, flat sequentially and in line with guidance.
- For the full year 2024, revenues amounted to NT$232,303 million, representing an increase of 4.4% YoY.
- Share price at a 4 year low and the outlook is still tepid, but almost $6 billion CapEx invested during the downturn years will pay dividends in the coming years..
2. Taiwan Dual-Listings Monitor: TSMC Spread Down But Still Extreme; UMC Rare ADR Discount Level
- TSMC: +23.9% Premium; Fallen But Remains in Historically Extreme Territory
- UMC: -3.6% Discount; Good Level to Go Long the ADR Spread
- ASE: +0.3% Premium; Can Consider Going Long the Spread at Current Level
3. UMC (2303.TT; UMC.US): Earthquake Alters 1Q25 Outlook; 2025 Growth Expected to Low Single Digits YoY
- Shipment: expected to decrease by mid-single-digits QoQ ASP: Remains flat in USD/NTD appreciation may lead to decline for 1Q25 sales.
- UMC’s addressable market in 2025 will grow in the low-single-digits YoY, driven by a moderate recovery in consumer applications in mature nodes.
- 1Q25 consumer will grow QoQ thanks to higher DTV, DDI, Wi-Fi, and STB demand. Other applications will decline QoQ.
4. Taiwan Tech Weekly: UMC Results Ahead; Nvidia & TSMC Partner for Silicon Photonics Technology
- UMC Results This Week; Insight Into Supply/Demand Environment for More Mature Semiconductor Segments
- Nvidia and TSMC Announce Partnership in Silicon Photonics Technology — Will Enable More Energy-Efficient AI
- TSMC 4Q24 Results Signal Multi-Year Market Share Gains; Margin Strength; Sustainable Industry Growth
5. Silicon Motion: Memory Controllers Emerging as Strategic Pillar for Global HPC and AI Leadership
- What is PCIe 5.0 and Why SIMO is Poised to Expand Market Share with PCIe 5.0
- PCIe 5.0 and Beyond — Importance for Enterprise HPC and AI Data Centers
- Looking Ahead: MaxLinear Arbitration in 2H25E — We Believe SIMO Likely to Win Its Termination Fee Plus Additional Award for Additional Damages
6. Stargate. It’s Not All About You Microsoft. Or You Either Elon
- President Donald Trump announced the Stargate Project, a new company which intends to invest $500 billion over four years building new AI infrastructure for OpenAI in the United States.
- Elon Musk is miffed, Microsoft says they “approved” the project and have a new Right of First Refusal agreement in place with OpenAI.
- Stargate is exclusively for OpenAI and the press release states that its mission is to provide a strategic capability to protect the national security of America and its allies.
7. United Microelectronics 4Q24 Results: Intel Partnership On Track and Is A Key Model for UMC’s Future
- UMC Misses 4Q24 Expectations — Gross Margin Dips with Flat QoQ Revenue
- UMC Guides for 40% Reduction in Capex Budget — We Believe Signals Strategic Shift to Less Capex Intensive Business Model
- Intel 12nm Partnership Remains on Track and is Key Business Model for Future; UMC Sees Improvement in Consumer Electronics Industry Inventories
8. TSMC (2330.TT; TSM.US): Earthquake Impact Limited; Setting Newest Production Line Not Viable in US.
- Taiwan experienced an earthquake on January 21st, and the tremors are still ongoing.
- Dr. CC Wei, Chairman of TSMC, explained the establishment of over 10,000 additional Standard Operating Procedures (SOPs) at the U.S. Fab.
- The yield at TSMC’s Arizona fab is about 4% higher than at their Tainan fab, marking a record for initial production.
9. Novatek (3034.TT): Rush Orders Received and Beneficial from Chinese Household Electronic Demand.
- Novatek Microelectronics Corp (3034 TT) 1Q25 demand has surged abruptly, with a likely 5% quarter-over-quarter shipment increase.
- China’s substantial demand is capable of supporting a Fabless leader like Novatek.
- The unexpected demand surge in 1Q25 has greatly benefited Novatek .
10. Vanguard (5347.TT): 1Q25 Outlook Could See a Flat QoQ; Shipments for DDIC and PMIC Are Increasing.
- Usually, the 1st quarter of each year should show a decline for foundry companies, but Vanguard Intl Semiconductor (5347 TT)‘s 1Q25 results could be relatively flat quarter-over-quarter.
- Vanguard Intl Semiconductor (5347 TT)‘s demand for Display Driver IC (DDIC) is on the rise, surpassing the growth seen in Power Management IC (PMIC).
- Despite the potential increase in shipments in 1Q25, the rise in lower-margin products, such as 8″ DDICs for large panels, is notable.
This weekly newsletter pulls together summaries of the top ten most-read Insights across Equity Capital Markets on Smartkarma.
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1. Korea’s Financial Regs Drop New IPO Allocation and Delisting Rules: What It Means and What to Expect
- We might see a liquidity crunch post-listing, with tighter regulations and mandatory holding drying up liquidity, causing more volatile price swings.
- Big local players with heavy lock-ups will take a large allocation, creating significant overhang risk at the six-month mark. Stronger IPO eligibility boosts costs, pushing funds toward riskier trades.
- Overall, this feels like a quick fix. Rather than focusing on long-term market improvements, we should focus on the new pricing patterns likely to emerge in the short term.
2. HKEx Consultation Paper – What Matters for ECM Investors
- Stock Exchange of Hong Kong issued a consultation paper titled Proposals to Optimise IPO Price Discovery and Open Market Requirements with new mechanisms proposed for the IPO in the future.
- In this note, we summarize key points for ECM investors and analyze the impact from a historical perspective the impact for ECM investors.
- We are of the view that overall the changes will benefit ECM investors by reallocating a portion of the profits from cornerstone investors.
3. Smithfield Foods (SFD): Terms Set for WH Group’s Spin-Off
- Spin-Off of WH Group’s could raise up to $939 million if priced at the high-end of the range
- The IPO is set to price on Monday January 27th for a Tuesday, January 28th debut
- Flash numbers revealed sales for the three months ended December 29, 2024 will range from $3,873 million to $3,953 million (prev. year $3,998 million)
4. Details of New IPO System Improvement Measures in Korea
- The FSC announced the details of its new IPO system improvement measures in Korea on 21 January.
- New rules will discourage the rampant first day trading of Korean IPOs. In 74 out of 77 IPOs in 2024, institutional investors were “net sellers” on the listing date.
- Rather, the new rules will encourage the investors to take more longer term approach to investing in Korean IPOs.
5. Venture Global Inc. (VG): IPO Terms Slashed by 40% in Reworking of Deal
- The company reduced the range from $40-$46 to $23-$27 and increased the amount of shares offered by the company from 50.0mm shares –> 70.0mm shares.
- It is highly unusual that the underwriting lineup, company and buy-side was so misaligned on valuation leading to this massive slashing of the deal.
- The deal is considered “oversubscribed” with several significant anchor orders placed following the reworking of terms.
6. Guming Holdings (Good Me) IPO: The Bull Case
- Guming Holdings (GUM HK) (Good me), a freshly-made tea store brand, is pre-marketing an HKEx IPO to raise US$300 million, according to press reports.
- Guming is China’s largest mid-priced freshly-made tea store brand and the second largest freshly-made brand across all price ranges, regarding GMV in 2023.
- The bull case rests on a rising market share, strong franchisee profitability, top-tier revenue growth, high margins, cash generation and a strong balance sheet.
7. Sichuan Biokin (百利天恒) H-Listing: Impressive Clinical Results so Far
- Sichuan Biokin is looking at a A-H listing and is looking to raise up to USD 500 million.
- In this note we look at the company’s fundamentals briefly including its heavyweight product BL-B01D1. We also examine its deal with BMS.
- The stock has performed well on Shanghai STAR board since its A share listing.
8. Pre-IPO Guming Holdings (PHIP Updates) – Some Points Worth the Attention
- Due to intense competition, freshly-made beverage market has shown signs of saturation after rapid growth in previous years. Guming is currently in a bottleneck period. Future performance growth will decline.
- Due to a decrease in consumption, we have seen the price war in this industry. We think Guming’s profit margin performance will decline in the future if it reduces prices.
- Guming’s valuation should be higher than Nayuki Holdings (2150 HK) and Sichuan Baicha Baidao Industrial (2555 HK) due to larger revenue scale/higher net profit margin, but lower than MIXUE.
9. HDB Financial Services Pre-IPO – The Negatives – Performance Has Been Slipping
- HDB Financial Services is looking to raise around US$1.5bn in its upcoming India IPO.
- HDBFS is a leading retail-focused non-banking financial company (NBFC) in India, in terms of total gross loan book size, according to the CRISIL Report.
- In this note, we talk about the not-so-positive aspects of the deal.
10. Guming (Good Me) IPO: Key Facts and Financials at First Glance
- Guming Holdings (GUM HK), a leading player in China’s freshly-made branded beverage sector, is widely expected to launch its IPO soon.
- Guming’s Good Me brand is China’s largest mid-priced freshly-made tea store brand in terms of store count as well as GMV.
- Guming reported robust revenue and profit growth for first nine months of 2024 led by new store openings, although same-store sales declined due to rising competition and weak consumer spending.
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. ZTO Express (2057 HK): On Track for Double (Maybe Triple) Index Inclusion
- With improved liquidity, ZTO Express Cayman (2057 HK) could be added to the HSCEI INDEX early March and then to a global index a couple of weeks later.
- ZTO Express Cayman (2057 HK) is a lower probability inclusion to the Hang Seng Index (HSI INDEX) given the index committee discretion. Inclusion would further increase the impact.
- The stock has had a big drawdown recently and the potential index inclusion and passive demand provide a low-risk entry point into the stock, especially hedged with its peers.
2. Kokusai Electric (6525 JP): Lock-Up Expiry, Index Deletion, Index Inclusion – It’s All Happening
- The lock-up on KKR HKE ends next week, Kokusai Electric (6525 JP) should be deleted from a global index end-February and could be added to the NKY INDEX in March.
- There has been a buildup of shorts in Kokusai Electric (6525 JP) as the stock has underperformed the Philadelphia Stock Exchange Semiconductor Index (SOX INDEX) by a lot.
- The global index deletion in February could provide an entry point into a long position ahead of the announcement of the Nikkei 225 (NKY INDEX) changes in March.
3. CATL (300750 CH): Index Inclusion Post H-Share Listing
- Contemporary Amperex Technology (CATL) (300750 CH) has announced plans for an H-share listing with media reports indicating a raise of at least US$5bn. Shareholders have approved the issuance.
- CATL (300750 CH) was designated as a Chinese Military Company earlier this year by the U.S. Department of Defense but is still not on the NS-CMIC list.
- The CATL (300750 CH) H-shares should get Fast Entry to the global indices and iShares China Large-Cap (FXI US) ETF. Inclusion in the HSCEI and HSI will take longer.
4. Solactive Global Uranium & Nuclear Components Index Rebalance Preview: Potential Changes Next Week
- Based on prices and turnover from 22 January, there could be one deletion from the index in January. Plus there will be capping and float changes.
- There are four stocks that meet the inclusion criteria, but all are non-pure play companies, and the index is already at the limit of 15 non-pure play companies.
- Estimated one-way turnover is 6.8% resulting in a round-trip trade of US$506m. There are many stocks with multiple days of ADV to trade.
5. Shinko Electric (6967) – All Approvals In, JIC Says “Mid-Feb” So Cash Is 19-21 March?
- JIC gave an official statement yesteday about the expected start of its Shinko Electric Industries (6967 JP) Tender Offer. A later-than-expected start has people asking questions.
- It has traded tighter since the SAMR approval news (I warned on 16 Dec it was coming and the next day it closed 6.6% gross).
- Below I discuss the language of the Conditions Precedent which would allow a MAC.
6. J&T Global Express (1519 HK): Global Index Inclusion Coming Up
- J&T Global Express (1519 HK) listed in October 2023 and was added to one global index in June 2024 and to the HSCEI INDEX in September 2024.
- J&T Global Express (1519 HK) could be added to a global index in February and there will be a big passive buying impact. The company is also buying back stock.
- J&T Global Express (1519 HK) has underperformed its peers over the past year and the index inclusion could help in closing some of that gap.
7. NIFTY NEXT50 Index Rebalance Preview: 7 Potential Changes in March
- With 10 trading days left in the review period, there could be 7 changes (including 2 migrations) for the NSE Nifty Next 50 Index (NIFTYJR INDEX) in March.
- Estimated one-way turnover is 15.9% resulting in a one-way trade of INR 52bn (US$600m). All forecast changes, bar one, have over 1.5x ADV to trade from passive trackers.
- All the forecast deletes are F&O members while two adds are not. NSE Indices could revisit the index membership criteria especially given the launch of futures on the index.
8. Taiwan: Potential Global Index Changes; Last Review Day Today
- There could be 2 adds and 2 deletes for Taiwan in a global index in February. Today is the last trading day ahead of the CNY holidays.
- Passive trackers will need to trade between US$76m to US$370m of the stocks and impact will vary between 3.2x-7x ADV to trade.
- Shorts are small in the potential adds and there has been short covering recently, while there has been a big increase in shorts for one of the potential deletes.
9. Henlius (2696)’s Fail Sets (Another) Bad Precedent
- The question was asked in Henlius (2696 HK): So, When Was The Last Time A PE/VC Outfit Blocked A Deal? Well, now we have one as LVC inexplicably blocked.
- It didn’t appear to make economic rationale for LVC to crash the party – knowing they would do so, and not bother to reduce their position accordingly.
- In tandem with the TCM (570 HK) debacle, it sets another bad precedent for future/existing Hong Kong events. Expect spreads for HK arbs to widen. And Henlius to crater.
10. Tsuruha (3391) – Welcia (3141) Future Merger Ratio – Pounding the Table
- In late December, a Jiji article said Tsuruha & Welcia would look to integrate by end-2025, now that they no longer need SEC approval. Odd language, but we’ll take it.
- That means we look to what might happen between here and there. The companies will hire Legal and Financial Advisors, wait until both report FY, then start negotiating.
- What has been the long-term trend and the trend of the last two years is different. It’s worthwhile looking at valuations and expectations to decide how to trade. It’s good.