Daily BriefsTMT/Internet

TMT: Simplex Holdings, TSMC, Samsung Electronics Pref Shares, Asrock Inc and more

In today’s briefing:

  • TOPIX Inclusion: Simplex Holdings (4373 JP)
  • TSMC – First Details of Japanese Investment Emerge
  • Samsung Electronics Yearend Special Dividend Possibility Checkup
  • ASRock Inc. (3515 TT) 4Q21 Sales to Peak Again Raise FY21 Profit Forecast

TOPIX Inclusion: Simplex Holdings (4373 JP)

By Janaghan Jeyakumar, CFA

Japan-based systems integration company Simplex Holdings (4373 JP) was listed in the First Section (which will, in future, be named the “Prime Market”) of the Tokyo Stock Exchange (TSE) on 22nd September 2021.

When a company gets listed on the TSE First Section, it subsequently gets included in the TOPIX Index and as a result, TOPIX-tracking funds will have to purchase the stock during an Inclusion Event which presents interesting trading opportunities for active investors to generate sharp market-neutral returns in the space of few trading days. Alternatively, this can also be considered as a key point in time where short-term IPO investors could decide if they wanted to exit their positions by utilising this liquidity event.

Below is a look at the timeline and the parameters of the Inclusion Event and the potential trading opportunities surrounding it. 

TSMC – First Details of Japanese Investment Emerge

By Mio Kato

The Nikkei just reported that Sony was considering jointly investing in a new $7bn manufacturing facility with TSMC. These are the first details to emerge regarding the TSMC investment in Japan that has been a point of discussion since it first announced it was setting up a research centre here.

Samsung Electronics Yearend Special Dividend Possibility Checkup

By Sanghyun Park

3Q provision results

Samsung Electronics disclosed its provisional 3Q results in a regulatory filing. Its quarterly sales are 73 trillion won, and operating profit is 15.8 trillion won.

The operating profit is almost in line with the consensus of 15,831.1 billion won of the 22 local brokerages compiled by FnGuide, although the sales are slightly short of hitting the consensus, which I don’t think would be a big deal.

Hence, Samsung Electronics’ provisional earnings for this quarter were exactly within the market’s expectations, so they did not significantly affect the share price immediately after the announcement.

ASRock Inc. (3515 TT) 4Q21 Sales to Peak Again Raise FY21 Profit Forecast

By Masterlink Securities

ASRock’s short-term sales and share price are dragged down by work suspension in Vietnam. However, we expect evident sales recovery in Sep21, and 4Q21 GM is expected to return to normal levels as the work suspension should not severely affect the company’s GM in 3Q21-4Q21. Therefore, we forecast FY21 and FY22 EPS at NT$21.19 and NT$22.4, respectively. Given ASRock’s current share price of NT$163.5, and that the current valuation of 8x PER in 2021 and 7x PER in 2022 is still quite low, we reiterate BUY on the company with the target price raised from NT$192 to NT$211.

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