In today’s briefing:
- Hang Seng Internet & IT Index (HSIII): Methodology Change & Impact
- Near-Term Flows to Watch on Mandatory Treasury Share Cancellation in Korea
- At the US-Korea Summit, Samsung’s Next Move Could Reshape the US Chipboard
- Intel Announces the Potential for Further Dilution by the US Govt Unless It Keeps Fabs
- 2025 High Conviction: Newborn Town (9911.HK) – Deep Value – China’s Global Social Apps Expansion
- Netskope IPO Preview: A Hot Cybersecurity Play Is On Deck
- BTCS, Inc: Powering the Future of the Decentralized Economy with Ethereum
- DallasNews Faces Competing Bids Amidst Shareholder and Corporate Governance Tensions
Hang Seng Internet & IT Index (HSIII): Methodology Change & Impact
- Last evening, Hang Seng announced a methodology change for the Hang Seng Internet & Information Technology Index (HSIII Index) with implementation in two phases.
- The capping methodology will be updated at the September rebalance and the turnover and sector requirements will be updated at the December rebalance.
- The updated capping scheme increases turnover and flow in September, while there could be one constituent change for the index at the December rebalance.
Near-Term Flows to Watch on Mandatory Treasury Share Cancellation in Korea
- Dems likely to push 3rd package in Q4; near-term flows chasing treasury stock cancellation theme, with locals screening >₩1tn mkt cap, >10% treasury shares of float.
- Little pushback on mandatory treasury cancellations; debate focused on timeline — grace period vs. immediate rollout — highlighting how much leeway government may grant differing governance structures.
- Too early for governance plays; near-term momentum flows likely in names with highest treasury stock relative to float, where cancellation is expected to hit flows hardest.
At the US-Korea Summit, Samsung’s Next Move Could Reshape the US Chipboard
- Samsung has scaled back its Texas fab plans from 44 billion to 37 billion, but the summit may bring a top-up with Intel and Amkor partnerships.
- Intel is shifting glass substrate patents to an Arm-like royalty model backed by SoftBank’s 2 billion stake and a 10 percent US government holding.
- Samsung’s partnership would show alignment with US semiconductor policy at a time when subsidies and political backing matter as much as technology.
Intel Announces the Potential for Further Dilution by the US Govt Unless It Keeps Fabs
- Semi-Cap names outperforming an otherwise dreary tape after TSMC announces no Chinese equipment in its 2nm lines for fear of US reprisals
- Yields rose on concerns it’s going to be a ‘one and done’ situation after September cuts
- Trend Micro looking interesting after rebounding off the lows yesterday – with OTC prints possibly pointing to a seller getting cleaned up after 2-months of woeful price action
2025 High Conviction: Newborn Town (9911.HK) – Deep Value – China’s Global Social Apps Expansion
- Newborn is a rare HK listed name entirely focused on overseas, monetising social networking apps across MENA and Southeast Asia, giving investors concentrated exposure to the China-to-overseas growth theme.
- Stock trades at low-teens PE while revenues and profits grow above twenty-five percent CAGR, leaving a big valuation disconnect and plenty of room for re-rating compared to global peers.
- The product matrix strategy means older apps provide cash, newer apps drive rapid scale, while a pipeline of apps ensures continuous replacement growth and resilience across user segments and geographies.
Netskope IPO Preview: A Hot Cybersecurity Play Is On Deck
- Netskope Inc., a VC-backed cybersecurity leader and provider of enterprise network security platform that helps customers apply zero trust principles to protect sensitive data, filed to go public.
- The Santa Clara-based Netskope has raised a significant amount of equity and debt. According to Crunchbase, the company has raised ~$1B in equity across many rounds of funding.
- With 30%+ ARR growth, improving profitability and leadership position, I expect a strong interest around high-profile Netskope IPO.
BTCS, Inc: Powering the Future of the Decentralized Economy with Ethereum
- We are initiating coverage of BTCS, Inc. (NASDAQ: BTCS), a pioneer in the blockchain technology sector since 2014. BTCS stands for Blockchain Technology Consensus Solutions, which is what it does for Ethereum, not Bitcoin (BTC).
- BTCS is a US-based blockchain technology company focused on blockchain infrastructure, with its primary operations currently focused on the Ethereum network.
- Its core focus is on driving scalable growth through a diverse range of blockchain-focused technological solutions, emphasizing Ethereum infrastructure, including block building and validator node operations.
DallasNews Faces Competing Bids Amidst Shareholder and Corporate Governance Tensions
- DALN announced a merger with Hearst Communications at $15/share, a 275% premium to the pre-announcement price.
- Alden Global Capital, owning 10% of DALN, made a competing bid of $18.50/share, which was ignored.
- DALN’s financial struggles include declining print circulation and advertising revenues, despite cost-saving measures and asset sales.
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