In today’s briefing:
- Asian Equities: Southbound Monthly – June Acceleration; Old Getting Sold, Dividends the New Darling
- DigiPlus Interactive (PLUS PM): Six Billion Peso Buy Back To Counter Negative News
- Taiwan Dual-Listings Monitor: Spreads Near Record Highs After U.S. Market Holiday
- Rio Tinto Sees Royal Gold Snap-Up Horizon Copper, Which Has a Controlling 25% Stake in Entree
- ASML Downgrades, Semi Production Equipment Demand
- Protean EGov: Navigating the PAN 2.0 Headwind and Charting a Diversified Future
- Australian Broker Call *Extra* Edition – Jul 07, 2025
- Shanghai Conant Optical (2276 HKG): Lens of Strong Fundamentals Makes the Growth Optics Visible
- Taiwan Tech Weekly: US Targets Malaysia & Thailand; Wind Power Fuels Taiwan’s AI Infrastructure Push
- FAST RETAILING (9983 JP) | Q3 Preview: Upside Risk into Print, But Tariff Narrative Still Overhangs
Asian Equities: Southbound Monthly – June Acceleration; Old Getting Sold, Dividends the New Darling
- The US$10.23bn net inflow through the Southbound Stock Connect in June marked a near-doubling from the May slump (US$5.85 bn), though it’s still lower than the 15-month average (US$12.1 bn).
- Investors bought high dividend yield SOEs heavily (e.g. China Construction Bank), and sold Tencent, Xiaomi, Alibaba. Healthcare companies – Innovent Biologics and CSPC Pharma were bought, underscoring investors’ defensive stance.
- Investors’ dividend yield fascination seems unabated. Some technology stocks (Tencent) do not seem overbought. Despite large buying, EV and ecommerce heavyweights (Meituan) are declining. Investors’ appetite in them could slump.
DigiPlus Interactive (PLUS PM): Six Billion Peso Buy Back To Counter Negative News
- The DigiPlus Interactive (PLUS PM) share price has slipped from a peak of 65 Pesos on June 17th to under 30 Pesos/share as gaming restriction proposals dampen sentiment.
- The bill proposed by Senator Gatchalian prohibits e-wallets, imposes high minimum cash-ins, and stricter advertising regulations. In addition, the Finance department is proposing a tax on online gaming.
- The stock now trades at 8.3x PE FY25e. The company has announced a buyback of 6 billion pesos (5% of outstanding shares on current market capitalization).
Taiwan Dual-Listings Monitor: Spreads Near Record Highs After U.S. Market Holiday
- TSMC: +26.3% Premium; Near Record High After U.S. 4th of July Holiday
- UMC: +4.7% Premium; One of the Highest Levels in History — Short
- ASE: +4.6% Premium; Wait for More Extreme Level Before Going Long or Short
Rio Tinto Sees Royal Gold Snap-Up Horizon Copper, Which Has a Controlling 25% Stake in Entree
- Royal Gold Inc (RGLD US) launched a cash takeover bid of 2 CAD/share (85% premium) on Horizon Copper.
- Recall, Horizon Copper (HCU CN) has a 25% controlling stake in Entree Resources (ETG CN).
- Rio Tinto PLC (RIO LN)is too bureaucratic to counterbid as the CEO transition paralyses the organization.
ASML Downgrades, Semi Production Equipment Demand
- ASML has been underperforming for 18 months. Recent downgrades are a delayed recognition of reality. ASML’s management goals for 2030 (10% revenue growth Cagr) are ok (plausible)
- But growth is slowing fast in 2H25-1H26. Growth should re-accelerate in 2H26 as the impact of China and Mature node lower spending, multiple delays (Intel, Samsung) is fading away.
- The stock is getting cheaper, but lacks catalysts for another 2-3 quarters. Trading at 25x forward PEx, that’s reasonable given the firm’s intrinsic qualities.
Protean EGov: Navigating the PAN 2.0 Headwind and Charting a Diversified Future
- Protean’s exclusion from the PAN 2.0 project raises concerns about potential long-term revenue loss, especially as tax services contribute significantly to its current business.
- Protean’s strategic diversification into pension services, digital identity solutions, and international markets positions it well for long-term growth, reducing reliance on tax services.
- With INR800 crore in cash reserves and zero debt, Protean is financially resilient, allowing it to invest in new growth areas, making it attractive for long-term investors despite short-term volatility.
Australian Broker Call *Extra* Edition – Jul 07, 2025
- Extra Edition of the Broker Call Report
Shanghai Conant Optical (2276 HKG): Lens of Strong Fundamentals Makes the Growth Optics Visible
- Shanghai Conant Optical (2276 HK) to utilize proceeds from its January placement for the research, development, design and manufacturing of lenses and vision solutions for smart glasses and XR headsets.
- The company will construct an automated RX resin lens production line with a focus on high-end customized lenses, at a cost of $4M, to be funded by internal accruals.
- The company declared that based on the preliminary assessments, it expects its 1H25 net profit to increase by 30% mainly due to strong volume growth and higher ASP.
Taiwan Tech Weekly: US Targets Malaysia & Thailand; Wind Power Fuels Taiwan’s AI Infrastructure Push
- US Eyes New AI Chip Restrictions on Malaysia and Thailand
- Chip and AI Boom Driving Taiwan’s Offshore Wind Expansion — Local Stocks to Watch
- China Set to Become World’s Largest Semiconductor Foundry Hub by 2030 — But One Needs to Consider Leading Edge Capacity vs. Mature Capacity
FAST RETAILING (9983 JP) | Q3 Preview: Upside Risk into Print, But Tariff Narrative Still Overhangs
- Q3 earnings risk skewed to upside: we forecast sales/OP of ¥857b/¥171b vs. Street’s ¥826b/¥152b.
- Domestic Uniqlo trends strong; international segment likely resilient despite Inditex’s headline miss.
- Tariff impact likely reiterated but remains a FY26 issue, not a near-term earnings swing factor.
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