In today’s briefing:
- EQD | Tencent (700 HK): Buy Calendar Spreads into Earnings
- 2023 High Conviction: Naver Corp – “The Genius Turtle”
- Sino-American Silicon Products: Increasing Concerns About a Global Semiconductor Downturn
- Foxconn Offers Cash and Rides to Lure Back Runaway Workers
- Hon Hai 3Q22 Results Call: Indicates COVID Issue Manageable, Maintains LT Margin Expansion Target
- Intel Corp: New Launches & Other Drivers
- Paycom Software: Major Drivers
- Shopify Inc: New Offerings For Merchants & Other Drivers
- Taiwan Semiconductor Manufacturing Co Ltd (TSM US): TSS Target Achieved in 3 Days (+13.4%)
- Advanced Micro Devices (AMD): New Launches & Other Drivers
EQD | Tencent (700 HK): Buy Calendar Spreads into Earnings
- Tencent are due to report earnings next week on Nov 16th
- Implied vols are bid up into the event causing an inverted term structure
- We see an opportunity to buy long calendar spreads to play a reversion in vol surface
2023 High Conviction: Naver Corp – “The Genius Turtle”
- Naver Corp (035420 KS) (market cap of 28.9 trillion won or $20.9 billion) is our 2023 high conviction play.
- In this report, we provide a deep-dive analysis of Naver Corp and why we believe this stock has an attractive upside of 30%+ by the end of 2023.
- Having followed the company for many years, I often like to think of Naver as“The Genius Turtle.”
Sino-American Silicon Products: Increasing Concerns About a Global Semiconductor Downturn
- Our NAV analysis suggests a target price of 146.5 TWD for Sino-American Silicon Products (SAS), representing a lack of upside from current price.
- Sino-American Silicon Products’ stake in Global wafers represents 109% of SAS’s current market cap.
- Two major risk factors on SAS include concerns about a global semiconductor sector downturn combined with increasing hostile political conflict between China and Taiwan.
Foxconn Offers Cash and Rides to Lure Back Runaway Workers
- Apple Inc. supplier Foxconn Technology Group is trying all means including higher pay to lure runaway workers back to its Zhengzhou factory
- Starting Nov. 1, Foxconn’s Zhengzhou factory offered an allowance of 400 yuan ($55) a day to any workers showing up for work this month, up from the regular attendance allowance of 100 yuan
- It’s not clear how many workers left the factory, but online photos showed hundreds of workers waiting to board buses to their hometowns.
Hon Hai 3Q22 Results Call: Indicates COVID Issue Manageable, Maintains LT Margin Expansion Target
- Hon Hai Precision Industry (2317 TT) reported 3Q22 EPS of NT$2.80 yesterday, below consensus estimates of NT$2.95, partly due to gross margin falling QoQ.
- The company emphasized that 4Q22E could be impacted by Zhengzhou issues, but would be short-term in nature. It still aims to achieve a 10% gross margin by 2025.
- EV business continues to expand and shares are trading near lower-end of their recent trading range.
Intel Corp: New Launches & Other Drivers
- Intel continues to face growing economic headwinds and delivered no growth in its revenues on a sequential basis.
- The service share of the company is tracking in line with its expectations, and against its product roadmap.
- The company launched its 13th Generation Intel Core processor family, which is led by the 13th Generation Intel Core i9-13900L.
Paycom Software: Major Drivers
- Paycom delivered a good quarterly result in a rather turbulent environment for tech stocks.
- Moreover, Paycom’s core offering, BETI is at the core of its automation approach since it helps businesses and employees succeed in payroll.
- Strong demo leads are generated by their efforts, and their target markets strongly respond to their new brand campaign.
Shopify Inc: New Offerings For Merchants & Other Drivers
- In a rather tumultuous market environment for technology stocks, Shopify did management to deliver an all-around beat in the recent quarter.
- The outsized pace of the offline growth on Shopify continued as it acquired 8 new merchants with more than 20 locations each.
- The management launched new tools along with Shopify Markets for merchants who are in search of expanding to new markets.
Taiwan Semiconductor Manufacturing Co Ltd (TSM US): TSS Target Achieved in 3 Days (+13.4%)
- The development of TSS has been a life’s work. We are pleased to acknowledge that our second TSS publication on Smartkarma produced an impressive and rapid result.
- On 7 November we determined that the new interim downtrend low below 59.51 had failed and would likely produce a minimum 6-8% correction in 1-2 weeks.
- TSM US subsequently produced a 13.4% gain in the following 3 days. Job done! Chart and further details attached.
Advanced Micro Devices (AMD): New Launches & Other Drivers
- AMD’s Q3 results were well below Wall Street expectations because of weaker PC demand and significant inventory reduction measures taken throughout the PC supply chain.
- As server OEMs continued to resolve match set concerns, OEM sales in the enterprise sector decreased sequentially.
- AMD’s Xilinx FPGA and networking data center products saw good sales thanks to strong demand from cloud and financial customers.
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