Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

<ul>
<li>Signal #1 -- Micron's CFO warns that margins will be coming in lower than expected and inventories will remain elevated through FY2023E.</li>
<li>Signal #2 -- South Korea semiconductor inventories jump 28% MoM, 39.5% YoY.</li>
<li>Implications for memory chip manufacturers: Biased to Long Micron vs. Short Nanya.</li>
</ul>


Signal #1 -- Micron's CFO warns that margins will be coming in lower than expected and inventories will remain elevated through FY2023E.
Signal #2 -- South Korea semiconductor inventories jump 28% MoM, 39.5% YoY.
Implications for memory chip manufacturers: Biased to Long Micron vs. Short Nanya.


Memory Monitor: Latest Two Signals Show Inventory Problems Worsening; Long Micron Vs. Short Nanya

Taiwan Semiconductor (TSMC) - ADR / Equity Bottom-Up

<ul>
<li>The U.S. is reportedly working to implement China semiconductor restrictions with South Korean firms, after doing the same with Japanese and Dutch firms.</li>
<li>Nanya management sees a bottom for Memory prices in 1Q23E; we look at Long Micron vs. Short Nanya.</li>
<li>Firms are significantly expanding semiconductor capacity in Singapore, with the latest being Applied Materials and French firm Soitec.</li>
</ul>


The U.S. is reportedly working to implement China semiconductor restrictions with South Korean firms, after doing the same with Japanese and Dutch firms.
Nanya management sees a bottom for Memory prices in 1Q23E; we look at Long Micron vs. Short Nanya.
Firms are significantly expanding semiconductor capacity in Singapore, with the latest being Applied Materials and French firm Soitec.


Taiwan Tech Weekly: U.S. Pushing South Korea China Restrictions, Nanya Says Memory Bottom in 1Q23E

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<ul>
<li>Notable names that have proposed amendments to their articles of association for changing the dividend record date at this year's AGM include Hyundai Motor Group, POSCO Holdings, and Kakao Corp.</li>
<li>There were skeptical views on how much response local big-name companies would show to Korea FSC's plan. However, the response from large companies has been unexpectedly positive and aggressive.</li>
<li>We should consider the possibility that the preferred stock premium of companies whose dividend visibility has improved through this may continue to improve compared to those that have not.</li>
</ul>


Notable names that have proposed amendments to their articles of association for changing the dividend record date at this year's AGM include Hyundai Motor Group, POSCO Holdings, and Kakao Corp.
There were skeptical views on how much response local big-name companies would show to Korea FSC's plan. However, the response from large companies has been unexpectedly positive and aggressive.
We should consider the possibility that the preferred stock premium of companies whose dividend visibility has improved through this may continue to improve compared to those that have not.


Dividend Record Date Changes Already in Progress in Korea: Trading Ramifications

Equity Long-Short Analyst

Pyari Menon

Thematic (Sector/Industry)

<ul>
<li>The three companies we write about this week are <a href="https://www.smartkarma.com/entities/nike-inc-cl-b" target="_blank" data-smartkarma-citation="entities:6658:1" rel="noopener">Nike (NKE US)</a> , <a href="https://www.smartkarma.com/entities/capital-one-financial-corp" target="_blank" data-smartkarma-citation="entities:255:1" rel="noopener">Capital One Financial (COF US)</a> and <a href="https://www.smartkarma.com/entities/under-armour-inc" target="_blank" data-smartkarma-citation="entities:11401:1" rel="noopener">Under Armour (UAA US)</a> </li>
<li>For the thirteen weeks since inception ended 17 Feb the combined innovation portfolio was +2.4%, versus DJIA +0.2%, S&amp;P500 +2.9%, Nasdaq +5.8%, Russell2000 +5.2%, MSCI-ACWI-ETF +4.3%, all in US$ terms</li>
<li>This week the large-cap portfolio underperformed on a mini <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-sp-adr" target="_blank" data-smartkarma-citation="entities:8587:1" rel="noopener">Taiwan Semiconductor (TSMC) - ADR (TSM US)</a> sell-off while <a href="https://www.smartkarma.com/entities/10x-genomics-inc-class-a" target="_blank" data-smartkarma-citation="entities:35564:1" rel="noopener">10X Genomics (TXG US)</a> was strong in the small caps group. </li>
</ul>


The three companies we write about this week are Nike (NKE US) , Capital One Financial (COF US) and Under Armour (UAA US) 
For the thirteen weeks since inception ended 17 Feb the combined innovation portfolio was +2.4%, versus DJIA +0.2%, S&amp;P500 +2.9%, Nasdaq +5.8%, Russell2000 +5.2%, MSCI-ACWI-ETF +4.3%, all in US$ terms
This week the large-cap portfolio underperformed on a mini Taiwan Semiconductor (TSMC) - ADR (TSM US) sell-off while 10X Genomics (TXG US) was strong in the small caps group. 


The Innovations Portfolio - Week Thirteen

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>Samsung C&amp;T announced the cancellation of its entire treasury shares over the next five years. It has 24.7 million shares of common shares (accounting for 13.2% of common shares outstanding).</li>
<li>We like a pair trade between Samsung C&amp;T (go long) and Samsung Electronics (go short). Samsung C&amp;T's share cancellation is likely to have a positive impact on its shares.</li>
<li>The recent sell-down of most of its shares in TSMC by Berkshire Hathaway is also likely to be viewed negatively by some investors in Samsung Electronics. </li>
</ul>


Samsung C&amp;T announced the cancellation of its entire treasury shares over the next five years. It has 24.7 million shares of common shares (accounting for 13.2% of common shares outstanding).
We like a pair trade between Samsung C&amp;T (go long) and Samsung Electronics (go short). Samsung C&amp;T's share cancellation is likely to have a positive impact on its shares.
The recent sell-down of most of its shares in TSMC by Berkshire Hathaway is also likely to be viewed negatively by some investors in Samsung Electronics. 


A Pair Trade Between Samsung C&T and Samsung Electronics Amid Big Share Cancellation at Samsung C&T

South Korea

Samsung Electronics Co., Ltd. manufactures a wide range of consumer and industrial electronic equipment and products such as semiconductors, personal computers, peripherals, monitors, televisions, and home appliances including air conditioners and microwave ovens. The Company also produces Internet access network systems and telecommunications equipment including mobile phones.

Samsung Electronics Pref Shares (005935 KS)

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Samsung Electronics Pref Shares (005935 KS)

Memory Monitor: Latest Two Signals Show Inventory Problems Worsening; Long Micron Vs. Short Nanya

Signal #1 -- Micron's CFO warns that margins will be coming in lower than expected and inventories will remain elevated through FY2023E.

Vincent Fernando, CFA

Taiwan Tech Weekly: U.S. Pushing South Korea China Restrictions, Nanya Says Memory Bottom in 1Q23E

Firms are also significantly expanding semiconductor capacity in Singapore, with the latest being Applied Materials and French firm Soitec.

Vincent Fernando, CFA

Dividend Record Date Changes Already in Progress in Korea: Trading Ramifications

We currently see more swift and active progress in changing dividend record dates, signaling a shift in dividend arbitrage trading patterns and...

Sanghyun Park

The Innovations Portfolio - Week Thirteen

For the thirteen weeks since inception ended 17 Feb the combined innovation portfolio was +2.4%, versus DJIA +0.2%, S&P500 +2.9%, Nasdaq +5.8%,...

Pyari Menon

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Memory Monitor: Latest Two Signals Show Inventory Problems Worsening; Long Micron Vs. Short Nanya

Signal #1 -- Micron's CFO warns that margins will be coming in lower than expected and inventories will remain elevated through FY2023E.

Vincent Fernando, CFA

Taiwan Tech Weekly: U.S. Pushing South Korea China Restrictions, Nanya Says Memory Bottom in 1Q23E

Firms are also significantly expanding semiconductor capacity in Singapore, with the latest being Applied Materials and French firm Soitec.

Vincent Fernando, CFA

Dividend Record Date Changes Already in Progress in Korea: Trading Ramifications

We currently see more swift and active progress in changing dividend record dates, signaling a shift in dividend arbitrage trading patterns and...

Sanghyun Park

The Innovations Portfolio - Week Thirteen

For the thirteen weeks since inception ended 17 Feb the combined innovation portfolio was +2.4%, versus DJIA +0.2%, S&P500 +2.9%, Nasdaq +5.8%,...

Pyari Menon

A Pair Trade Between Samsung C&T and Samsung Electronics Amid Big Share Cancellation at Samsung C&T

We like a pair trade between Samsung C&T (go long) and Samsung Electronics (go short). Samsung C&T's share cancellation is likely to have a...

Douglas Kim