In today’s briefing:
- Korea: Short Selling Is Back in March; Trade Ideas
- Pentamaster (1665 HK) Breaks Ahead Of Vote. Yet Pricing IS Fair
- Naspers & Prosus Sell off on JET Acquisition, Discounts Oversold Lifting Buyback Accretion
- Taiwan Tech Weekly: Trump’s New China Chip Restrictions; Foxconn & Honda Alliance?; TSMC & Intel
- [Alert] Sell Sandisk Spin-off
- Dozn IPO Preview
- Xiaomi: 3 Option Hedges for Extreme Price & Volatility Environment
- Where Is the Nasdaq 100 Headed Next?
- Twilio Inc.: How Is The Management Capitalizing On AI Integration & Product Cross-Selling Opportunities?
- [NetEase (NTES US, BUY, TP US$122) TP Change]: C4Q24 Review: Getting Ready for Accelerated Growth
Korea: Short Selling Is Back in March; Trade Ideas
- Since short selling was banned in November 2023, short interest has plunged in Korea as shorts were covered. Markets have not done much over the last 16 months though.
- Foreign investor holdings have dropped from 32.05% in July to 28.57%. The top 25 stocks bought by foreign investors outperformed the top 25 stocks sold by 128% in 16 months.
- There will be trade opportunities across indices, pref/ords, index migrations and deletions, potential market upgrades and overvalued stocks being sold.
Pentamaster (1665 HK) Breaks Ahead Of Vote. Yet Pricing IS Fair
- Back on the 19th December 2024, Pentamaster Corp (PENT MK) announced an Offer, by way of a Scheme, to take out its pseudo dual-listed twin, Pentamaster International (1665 HK).
- The Offer Price was HK$1.00/share – including a HK$0.07/share dividend – a 45.3% premium to last close, but arguably more like a 61% premium to undisturbed.
- The Court Meeting is the 28th February. Shares are down 15%+ in recent days. On no news. Not a great look.
Naspers & Prosus Sell off on JET Acquisition, Discounts Oversold Lifting Buyback Accretion
- Yesterday morning, Prosus announced the acquisition of Just Eat Takeaway for $4.3bn.
- Naspers and Prosus sold off sharply on the news, ending the day down 7.7% and 7.8%, respectively.
- Naspers’ discount widened by 2.8 percentage points to 44.2% and Prosus’ discount widened by 3.1 percentage points to 39.8%.
Taiwan Tech Weekly: Trump’s New China Chip Restrictions; Foxconn & Honda Alliance?; TSMC & Intel
- Trump Adminstration Gearing Up to Further Restrict China’s Access to Chip Technology — Could Restrict Servicing of Existing Equipment
- Foxconn and Honda: Could This Be a New Alliance in EV Manufacturing?
- TSMC (2330.TT; TSM.US): Will TSMC Work on Intel Foundry Services? There Are Three Paradoxes…
[Alert] Sell Sandisk Spin-off
Today, investors received shares in the new SanDisk spin-off.
Shares are currently slightly up due to buying pressure ahead of the stock being added to the S&P 600 index effective tomorrow.
SanDisk is trading at 1.1x revenue which is a reasonable valuation (Xioxia, Sandisk’s JV partner, trades at 1.3x LTM revenue).
Dozn IPO Preview
- Dozn is getting ready to complete its IPO in Korea in March 2025. The company plans to offer 2.5 million shares in this IPO.
- The IPO price range is from 10,250 won to 12,500 won per share and the offering amount ranges from 26.2 billion won to 31.2 billion won.
- Founded in 2017, Dozn is emerging as a prominent business-to-business (B2B) digital solution service provider in Korea.
Xiaomi: 3 Option Hedges for Extreme Price & Volatility Environment
- Xiaomi has had a remarkable rally, ranking at the 99th percentile for all previous 1-month price changes.
- Implied vols have surged along with price with 1M, 2M and 3M implied vols all ranking above the 95th over the past 4 years.
- We recommend how to manage risk and positioning given the extreme price and implied vol dynamics.
Where Is the Nasdaq 100 Headed Next?
- The Nasdaq-100 INDEX started to pull back last week, this is the second week down in a row and the index is very oversold according to our tactical model.
- The DAILY model signals extreme oversold conditions, a reversal is imminent. The WEEKLY model is also oversold but still leaves room for further downside…
- A possible scenario is a DAILY bounce (1 or 2 days up) followed by more WEEKLY downside (another 1-2 weeks down). This insight wil analyze only the WEEKLY model.
Twilio Inc.: How Is The Management Capitalizing On AI Integration & Product Cross-Selling Opportunities?
- Twilio Inc. presented a compelling performance in the fourth quarter of 2024, showcasing its evolution and strategic progress.
- The company reported $1.195 billion in revenue, marking an 11% increase year-over-year, achieving consecutive quarters of double-digit growth.
- This quarter was particularly notable as it was Twilio’s first to achieve GAAP operating profitability, ahead of its initial target, underscoring the firm’s focus on balanced growth and profitability.
[NetEase (NTES US, BUY, TP US$122) TP Change]: C4Q24 Review: Getting Ready for Accelerated Growth
- NetEase reported C4Q24 rev., GAAP op. profit and GAAP net inc. in line/3.9%/27% vs. our est., and in line/9.3%/27% vs. cons.
- We see NetEase entering a new phase of product-driven revenue growth, driven by rebounding mobile and accelerating PC game growth;
- We raise TP to US$122 and keep NTES as our TOP PICK in gaming sector.
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