Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

Taiwan Semiconductor (TSMC) - ADR / Event-Driven

<ul>
<li>The upcoming rebalance of the MVIS US Listed Semiconductor 25 Index will be implemented on 15 September. There are no constituent changes, but there are float and capping changes.</li>
<li>The <a href="https://www.smartkarma.com/entities/vaneck-vectors-semiconductor" target="_blank" data-smartkarma-citation="entities:32807:1" rel="noopener">VanEck Vectors Semiconductor (SMH US)</a> ETF tracks the index and has an AUM of US$9.7bn.</li>
<li>Estimated one-way turnover is 5.9% resulting in a one-way trade of US$595m. The stocks are extremely liquid, the impact on the stock in terms of ADV to trade is small.</li>
</ul>


The upcoming rebalance of the MVIS US Listed Semiconductor 25 Index will be implemented on 15 September. There are no constituent changes, but there are float and capping changes.
The VanEck Vectors Semiconductor (SMH US) ETF tracks the index and has an AUM of US$9.7bn.
Estimated one-way turnover is 5.9% resulting in a one-way trade of US$595m. The stocks are extremely liquid, the impact on the stock in terms of ADV to trade is small.


MVIS US Listed Semiconductor 25 Index Rebalance: Upweight for TSMC

Founder/CEO of ROK Advisory, ROK Advisory LLC

Ken S. Kim

Founder/CEO of ROK Advisory

ROK Advisory LLC

ROK is an independent research advisory firm. We guide you to minimize the information gap between foreign and local investors in Northeast Asia with a focus in Korea, Taiwan and Japan.

Independent Research Advisory Firm

Equity Bottom-Up

<ul>
<li>Local press states that <a href="https://www.smartkarma.com/entities/samsung-electronics-pref-shares" target="_blank" data-smartkarma-citation="entities:23591:1" rel="noopener">Samsung Electronics Pref Shares (005935 KS)</a>sold shares as they look to invest in their future capex</li>
<li>The capex amount for 2023 will be around 40-50 trillion KRW and it doesn't seem like W3 trillion is a needle mover</li>
<li>With a new 3 year shareholder return plan, I would think maybe cash is needed to secure ammunition for M&amp;A</li>
</ul>


Local press states that Samsung Electronics Pref Shares (005935 KS)sold shares as they look to invest in their future capex
The capex amount for 2023 will be around 40-50 trillion KRW and it doesn't seem like W3 trillion is a needle mover
With a new 3 year shareholder return plan, I would think maybe cash is needed to secure ammunition for M&amp;A


Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Thematic (Sector/Industry)

<ul>
<li>Q2'23 revenues for the top 5 WFE players amounted to ~$22 billion down ~10% QoQ and essentially flat YoY.</li>
<li>While WFE spending as a whole will decline 20% YoY, ASML &amp; AMAT are outperforming, LRCX &amp; TEL are underperforming with KLAC somewhere in between.</li>
<li>Increased China WFE spending on legacy tools is helping offset ongoing declines from memory and Logic/Foundry</li>
</ul>


Q2'23 revenues for the top 5 WFE players amounted to ~$22 billion down ~10% QoQ and essentially flat YoY.
While WFE spending as a whole will decline 20% YoY, ASML &amp; AMAT are outperforming, LRCX &amp; TEL are underperforming with KLAC somewhere in between.
Increased China WFE spending on legacy tools is helping offset ongoing declines from memory and Logic/Foundry


Semiconductor WFE. China Spending Spree Offsets Memory & Logic Declines

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>During 4QFY03/2023 results release, Nikon announced a medium-term target of revenues of ¥700bn, OPM of 10%+ and ROE of 8%+ by the end of FY2025E (FY ended 31st March 2026).</li>
<li>Our analysis (with conservative assumptions) suggests that the company could easily achieve its medium-term target despite the company expecting to see its earnings declining in FY03/2024E.</li>
<li>Nikon is trading at a discount to its Japanese peers Canon and Konica Minolta and we think the market is clearly undervaluing the company as a pure-play Imaging products player.</li>
</ul>


During 4QFY03/2023 results release, Nikon announced a medium-term target of revenues of ¥700bn, OPM of 10%+ and ROE of 8%+ by the end of FY2025E (FY ended 31st March 2026).
Our analysis (with conservative assumptions) suggests that the company could easily achieve its medium-term target despite the company expecting to see its earnings declining in FY03/2024E.
Nikon is trading at a discount to its Japanese peers Canon and Konica Minolta and we think the market is clearly undervaluing the company as a pure-play Imaging products player.


Nikon: A Reality Check on Nikon’s Medium-Term Management Plan

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

<ul>
<li>We visited Micron's advanced A3 semiconductor fab in Taichung, Taiwan last Friday. Micron is committed to expanding leading edge capacity in Taiwan.</li>
<li>Memory names rallied sharply at the end of last week after SK Hynix affirmed that 1Q23 was the cycle bottom and AI-driven DRAM demand was accelerating its recovery.</li>
<li>We reiterate our Nanya Long trade and believe it can now run further given improving industry signals. Nanya presents pure-play exposure to a DRAM turn-around accelerated by AI demand.</li>
</ul>


We visited Micron's advanced A3 semiconductor fab in Taichung, Taiwan last Friday. Micron is committed to expanding leading edge capacity in Taiwan.
Memory names rallied sharply at the end of last week after SK Hynix affirmed that 1Q23 was the cycle bottom and AI-driven DRAM demand was accelerating its recovery.
We reiterate our Nanya Long trade and believe it can now run further given improving industry signals. Nanya presents pure-play exposure to a DRAM turn-around accelerated by AI demand.


Memory Monitor: Our Site Visit to Micron's A3 Fab in Taiwan; AI Accelerating the Cycle Recovery

Netherlands

ASML Holding N.V. develops, produces, and markets semiconductor manufacturing equipment, specifically machines for the production of chips through lithography. The Company services clients worldwide.

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ASML Holding NV (ASML US)

MVIS US Listed Semiconductor 25 Index Rebalance: Upweight for TSMC

No constituent changes, but there are float/capping changes. Estimated one-way turnover is 5.9% resulting in a one-way trade of US$595m. Stocks are...

Brian Freitas

Is Samsung M&A About to Happen?

We have been awaiting for a M&A announcement from Samsung Electronics for years. Is this the time to do it? Why it would make sense that M&A...

Ken S. Kim

Semiconductor WFE. China Spending Spree Offsets Memory & Logic Declines

WFE spend to drop 20% YoY, ASML & AMAT are outperforming, LRCX & TEL are underperforming, KLAC somewhere in between. Increased China WFE spend...

William Keating

Nikon: A Reality Check on Nikon’s Medium-Term Management Plan

As Nikon is reporting earnings soon, this insight would help readers have a quick glance at the company's last quarter earnings and whether Nikon...

Shifara Samsudeen, ACMA, CGMA

Memory Monitor: Our Site Visit to Micron's A3 Fab in Taiwan; AI Accelerating the Cycle Recovery

Memory names rallied sharply at the end of last week after SK Hynix affirmed that 1Q23 was the cycle bottom and AI-driven DRAM demand was...

Vincent Fernando, CFA

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