Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

On the 12th September, <a href="https://www.smartkarma.com/entities/7661" target="_blank" data-smartkarma-citation="entities:7661:1">Unisem (M) (UNI MK)</a>'s CEO controlling shareholders and CEO John Chia, together with <a href="https://www.smartkarma.com/entities/20708" target="_blank">Tianshui Huatian Technology Co, Ltd. (002185 CH)</a> (TSHT) (the Joint Offerors) announced a <a href="http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=89524&amp;name=EA_GA_ATTACHMENTS" target="_blank">pre-conditional takeover</a> at RM3.30/share, an 11.1% premium to last close, in an RM1.82bn deal.
Three of the four pre-conditions have now been cleared, with just SAFE's outbound approval remaining. Given guidelines handed down last year which encourage transactions in industries such as high-tech businesses and advanced manufacturing enterprises, this approval should be straightforward.
A binding offer will be subject to a 50% acceptance condition. The Joint Offerors' interest - mainly Chia and his family - hold 24.28%.
A quirk of the collaboration agreement between the Joint Offerors is that TSHT’s holding into Unisem, assuming the Offer completes and the agreement remain in place, is maintained at a 10% gap above Chia &amp; family members. It is the intention of the Joint Offerors to maintain Unisem's listing and not exercise its right to compulsory acquisition.
Dividends declared and paid will be netted off the Offer price. The ex-date for the <a href="http://disclosure.bursamalaysia.com/FileAccess/viewHtml?e=2902163" target="_blank">RM0.02/share second interim dividend</a> is the 21 November.
There is still the risk a firm Offer is not tabled. However, the recent approvals from <a href="http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=90786&amp;name=EA_GA_ATTACHMENTS" target="_blank">China’s Gansu Department of Commerce and from the NDRC</a> would indicate this Offer is on track to become binding. This also potentially suggests an earlier completion, well ahead of the long-stop date of mid-March under the pre-conditional offer.
The deal is trading at a gross spread of 5.8%, having gained 4% in the past two days. This looks a decent entry point here.

On the 12th September, Unisem (M) (UNI MK)'s CEO controlling shareholders and CEO John Chia, together with Tianshui Huatian Technology Co, Ltd. (002185 CH) (TSHT) (the Joint Offerors) announced a pre-conditional takeover at RM3.30/share, an 11.1% premium to last close, in an RM1.82bn deal.
Three of the four pre-conditions have now been cleared, with just SAFE's outbound approval remaining. Given guidelines handed down last year which encourage transactions in industries such as high-tech businesses and advanced manufacturing enterprises, this approval should be straightforward.
A binding offer will be subject to a 50% acceptance condition. The Joint Offerors' interest - mainly Chia and his family - hold 24.28%.
A quirk of the collaboration agreement between the Joint Offerors is that TSHT’s holding into Unisem, assuming the Offer completes and the agreement remain in place, is maintained at a 10% gap above Chia &amp; family members. It is the intention of the Joint Offerors to maintain Unisem's listing and not exercise its right to compulsory acquisition.
Dividends declared and paid will be netted off the Offer price. The ex-date for the RM0.02/share second interim dividend is the 21 November.
There is still the risk a firm Offer is not tabled. However, the recent approvals from China’s Gansu Department of Commerce and from the NDRC would indicate this Offer is on track to become binding. This also potentially suggests an earlier completion, well ahead of the long-stop date of mid-March under the pre-conditional offer.
The deal is trading at a gross spread of 5.8%, having gained 4% in the past two days. This looks a decent entry point here.

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

Globetronics Technology / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/10571" target="_blank" data-smartkarma-citation="entities:10571:1">Globetronics Technology (GTB MK)</a> does not only make sensors for smartphones and tablets, it also manufacture quartz crystal timing device and LED. The company currently makes laser powered auto headlights for <a href="https://www.smartkarma.com/entities/21689" target="_blank" data-smartkarma-citation="entities:21689:1">OSRAM Licht AG (OSR GR)</a>, supplying to BMW and Audi and is very likely to set the new standards for auto industry headlights. 
The company supplies around one-third of Epson's total requirement (( <a href="https://www.smartkarma.com/entities/16793" target="_blank" data-smartkarma-citation="entities:16793:1">Seiko Epson (6724 JP)</a> produces around 50% of the digital timing device globally) and in turn supplies 16.5% to the global demand for digital timing device that can be found in cars, gadgets, computers etc. 
<a href="https://www.smartkarma.com/entities/10265" target="_blank" data-smartkarma-citation="entities:10265:1">Inari Amertron (INRI MK)</a> may trade at a premium to Globetronics and Unisem due to a bigger market capitalization and a much higher liquidity but the valuation premium may shrink as Globetronics' exposure to a potentially new blockbuster product (laser powered auto headlights) will give a boost to the earnings and its trading multiple should be higher as well. 
<table class="table table-striped">
<tbody>
<tr>
<td></td>
<td style="text-align: right;">
 Dec-31-2015</td>
<td style="text-align: right;">
 Dec-31-2016</td>
<td style="text-align: right;">
 Dec-31-2017</td>
<td style="text-align: right;">LTM Jun-30-2018</td>
</tr>
<tr>
<td>Revenue Growth YoY (%)</td>
<td style="text-align: right;">-3%</td>
<td style="text-align: right;">-37%</td>
<td style="text-align: right;">41%</td>
<td style="text-align: right;">65%</td>
</tr>
<tr>
<td>PER</td>
<td>                                  25.64</td>
<td>                                  27.33</td>
<td>                                  58.83</td>
<td>                                  23.36</td>
</tr>
</tbody>
</table>

Globetronics Technology (GTB MK) does not only make sensors for smartphones and tablets, it also manufacture quartz crystal timing device and LED. The company currently makes laser powered auto headlights for OSRAM Licht AG (OSR GR), supplying to BMW and Audi and is very likely to set the new standards for auto industry headlights. 
The company supplies around one-third of Epson's total requirement (( Seiko Epson (6724 JP) produces around 50% of the digital timing device globally) and in turn supplies 16.5% to the global demand for digital timing device that can be found in cars, gadgets, computers etc. 
Inari Amertron (INRI MK) may trade at a premium to Globetronics and Unisem due to a bigger market capitalization and a much higher liquidity but the valuation premium may shrink as Globetronics' exposure to a potentially new blockbuster product (laser powered auto headlights) will give a boost to the earnings and its trading multiple should be higher as well. 





  Dec-31-2015

  Dec-31-2016

  Dec-31-2017
LTM  Jun-30-2018


Revenue Growth YoY (%)
-3%
-37%
41%
65%


PER
                                  25.64
                                  27.33
                                  58.83
                                  23.36




Globetronics (GTB): Not Only Sensors but Also Laser Powered Auto Headlights

Malaysia

Unisem (M) Berhad manufactures semiconductor devices.  The Company provides turnkey solutions to its customers in wafer grinding, packaging and testing of integrated circuits, tape and reel, and dropship services. Unisem also provides packaging and testing wide range of leadframe packages.

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Unisem (M) (UNI MK)

Mind The Gap as TSHT Closes In On Unisem

On the 12th September, Unisem (M) (UNI MK)'s CEO controlling shareholders and CEO John Chia, together with Tianshui Huatian Technology Co, Ltd....

David Blennerhassett

Globetronics (GTB): Not Only Sensors but Also Laser Powered Auto Headlights

Globetronics Technology (GTB MK) does not only make sensors for smartphones and tablets, it also manufacture quartz crystal timing device and LED....

Henry Soediarko

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