In today’s briefing:
- Taiwan Dual-Listings: TSMC & UMC Nice Setup Opportunities, Chunghwa Rare Deep Discount
- Singtel: Demand Surge
- Intel Vs. TSMC Monitor: TSMC Outperformed Too Much Too Soon?
- Bilibili (9626 HK): 3Q22, Growth Accelerated, Loss Shrank, 38% Upside
- Nanya Technology: Inventory Risk, A 10% Downside Trade Is Still Available
- Twitter’s Banks Are Stuck With Largest Chunk Of Unsold LBO Debt
- Is TSE Being Too Strict with the Honor Students and Too Lenient with the Underdogs?
Taiwan Dual-Listings: TSMC & UMC Nice Setup Opportunities, Chunghwa Rare Deep Discount
- TSMC — Trading near parity, decent setup opportunity at the current level.
- UMC — Trading at a discount, another decent setup opportunity.
- Chunghwa Telecom — Rare opportunity here, trading at a steep discount compared to the tight historical range.
Singtel: Demand Surge
- Sentiment switch for Singtel after surge in buying among Asia Ex-Japan funds
- New positions from Fullerton Asia Focus, Jupiter Asian Fund and Fullerton Asia Growth & Income head a total of 14 funds opening exposure between 01/31/2022 and 10/31/2022.
- Follows broader rotation in to key Singapore names despite heavy selling in Sea Ltd.
Intel Vs. TSMC Monitor: TSMC Outperformed Too Much Too Soon?
- Intel has eked out a small outperformance vs. TSMC most recently, and we believe there is more to come.
- Events appear to be in Intel’s favor in the near-term.
- TSMC has outperformed by a historically extreme amount in just three weeks.
Bilibili (9626 HK): 3Q22, Growth Accelerated, Loss Shrank, 38% Upside
- The revenue growth rate rose for the first time in one year and a half.
- Also, operating loss shrank for the first time in one year and a half.
- We believe the stock has an upside of 38% for year end 2023.
Nanya Technology: Inventory Risk, A 10% Downside Trade Is Still Available
- Nanya Tech shares have dropped, but there’s still a 10% trading sell from these levels.
- The company had dramatically outperformed the Taiwan market and Memory chip peers, yet is heading into weakening end-demand with inventory levels at multi-year highs.
- We see the potential for inventory write-downs and a negative operating margin in the coming quarters. Meanwhile, opportunities for near-term good news appear limited.
Twitter’s Banks Are Stuck With Largest Chunk Of Unsold LBO Debt
- Twitter’s banks are stuck with 30% of total US LBO debt unsold debt.
- The banks already had lost more than $500 million on Twitter’s LBO debt even before the deal closed. They could sell it even at 50-60 cents on the dollar.
- The trouble with Elon aggressively blowing up Twitter is that it’s banks probably won’t take his calls when Twitter needs more cash—which it probably will in the near future.
Is TSE Being Too Strict with the Honor Students and Too Lenient with the Underdogs?
- There are 236 companies with a trading unit of more than 500,000 yen, while there are 967 companies with a trading unit of less than 50,000 yen on the TSE.
- It’s fair to amend the law to abolish the share unit system, but changing the law takes time. It’s also unclear why “between 50,000 yen and 500,000 yen” is appropriate.
- While TSE still allows 300 companies that don’t meet the listing criteria to be listed on prime market, TSE requires companies with higher stock prices to increase their administrative burden.
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