In today’s briefing:
- CES China Semiconductor Chips Index Rebalance: Four Changes in December
- Softbank Group (9984 JP) –The Masa Hurdles
- Appier (4180) Nearing A TSE Prime (And TOPIX) Announcement?
- End of Mandatory Lock-Up Periods for 58 Companies in Korea in December 2022
- FY3Q23: If It’s All Macro, Do You Buy the Dip?
- BLS International Services Ltd: Forensic Analysis
- Alibaba Health 1H: Cost Enhancements Support Margins but Sustainabaility Remains to Be Seen
- Marketingforce Management Pre-IPO Tearsheet
- Oracle: What To Expect As It Reports Q2 2023 Results
CES China Semiconductor Chips Index Rebalance: Four Changes in December
- There are 4 changes for the CES China Semiconductor Chips Index that will be implemented at the close on 9 December.
- Empyrean Technology, GalaxyCore, Shanghai Fudan Microelectronics and Shanghai Awinic Technology will replace Grinm Advanced Materials, Chengdu Corpro Technology, Shanghai Sinyang Smcndctr Mtls and Espressif Systems Shanghai in the index.
- Shanghai Fudan Microelectronics Group (688385 CH) will be added to the MSCI China Index at the close today and will also be added to the CSI 500 Index in December.
Softbank Group (9984 JP) –The Masa Hurdles
- Masayoshi’s debt with Softbank group is big, and due to the poor performance of SoftBank Vision Fund 2, Masa’s equity interest as a co-investor is now zero
- Internal hedge fund Northstar, in which Masa has a 33.3% stake, is in liquidation leaving Masa’s share of his Northstar debt to SoftBank at USD1.2bn
- SoftBank’s collateral on Masa debt includes the Vision Fund 2 equity, as well as SoftBank shares and other personal assets; we expect SoftBank’s NAV discount of c 25% to widen
Appier (4180) Nearing A TSE Prime (And TOPIX) Announcement?
- On 17 Feb 2022, Janaghan Jeyakumar, CFA wrote about Appier Group (4180 JP) suggesting it was a TOPIX inclusion candidate in the not-distant future.
- In mid-August 2022, he reiterated his opinion. Three days later, the company said they had applied for TSE Prime membership. We are coming up on the timing for an announcement.
- It would mean buying, but the shareholder structure is interesting, and intentions are not easy to read. But if they announce imminently, the calendar makes the event even more interesting.
End of Mandatory Lock-Up Periods for 58 Companies in Korea in December 2022
- We discuss end of the mandatory lock-up periods for 58 stocks in Korea in December 2022, among which 9 are in KOSPI and 49 are in KOSDAQ.
- These 58 stocks on average could be subject to further selling pressures in December and could underperform relative to the market.
- Among these 58 stocks, the top 5 market cap stocks include HYBE, Kakao Games, WCP, Sillajen, and Duksan Neolux.
FY3Q23: If It’s All Macro, Do You Buy the Dip?
- First ever ARR miss, and big initial guide down on FY2024 ARR growth: low 30s vs. 37% into the Q. Pretty shocking given Crowdstrike’s track record.
- Macro Macro Macro – deal close times pushed out for SMBs and Enterprise customers reworking timing of deal starts to match opex budgets.
- Stock is overly punished down 20% and trading at 9x forward sales for a platform consolidator with 30% FCF margins.
BLS International Services Ltd: Forensic Analysis
- BLS International Services (BLSIN IN) is engaged in business of providing outsourcing and administrative task of Visa, Passport and Consular services to various Diplomatic Missions across the world.
- BLS is troubled with several forensic discomforts. One should take into account the discomforts on the subsidiaries end and other linked entities like DSS Gulf Realtors.
- Other forensic setbacks include alarming bad debts, misstatement of operating cash flows and several grey areas pertaining to disclosure norms followed by the company.
Alibaba Health 1H: Cost Enhancements Support Margins but Sustainabaility Remains to Be Seen
- Alibaba Health reported 1HFY03/2023 results on Monday. Revenue increased 22.9% YoY to RMB11.5bn and reported an adjusted net profit of RMB350m vs net loss of RMB283m reported in 1HFY03/2022.
- Adjusted operating loss for the quarter decreased to RMB30m compared to RMB586m reported in the same quarter last year.
- Ali Health’s fulfilment and S&M costs were the highest among peers and cutting down these costs has helped the company reduce its operating losses.
Marketingforce Management Pre-IPO Tearsheet
- Marketingforce Management (MFM HK) is looking to raise about US$100m in its upcoming HK IPO. The deal will be run by CICC and CCB International.
- Marketingforce Management (MFM) is a domestic marketing and sales SaaS solution provider in China and considered the largest in terms of revenue in 2021, according to Frost & Sullivan.
- Through its Marketingforce platform, MFM delivers integrated cloud-based solutions that cover the entire marketing and sales management process of enterprises, from content and experience to strategy and management, amongst others.
Oracle: What To Expect As It Reports Q2 2023 Results
- Oracle’s share price drop presented a good opportunity for long-term shareholders to average down.
- Lagging analysts’ sentiment still presents an opportunity for future multiple repricing.
- Headwinds for profitability will likely be an issue for investors with short-term investment horizons.
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