Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

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

<ul>
<li>The US Commerce Department is likely to expand China restrictions for the sale of chips and chip manufacturing equipment.</li>
<li>Impact for major Taiwan-listed suppliers appears minimal so far; Inventec is one name with potential exposure.</li>
<li>Not Made in China: More signs of shift as Tata is preparing a JV with Wistron to produce iPhones and Taiwanese companies look to Southeast Asia and the USA.</li>
</ul>


The US Commerce Department is likely to expand China restrictions for the sale of chips and chip manufacturing equipment.
Impact for major Taiwan-listed suppliers appears minimal so far; Inventec is one name with potential exposure.
Not Made in China: More signs of shift as Tata is preparing a JV with Wistron to produce iPhones and Taiwanese companies look to Southeast Asia and the USA.


Taiwan Tech Weekly: US Restrictions on Tech Sales to China to Expand

President, Vision Research

Robert C Prather Jr

President

Vision Research

Vision Research was formed in 2004 with the vision of generating the best possible fundamental analysis and investment research for smid cap US equities. In 2008, we broadened our coverage to include mid/large cap US stocks.  After researching a  few ideas outside the US each year for a number of years, we launched a dedicated non-US equity product at the end of 2015.  This was followed by the introduction of a product focused on IPOs in mid-2017.

Fundamental Insight

<ul>
<li>Enterprise storage hardware market faces numerous headwinds and increasing commoditization</li>
<li>STaaS is cannibalistic, facing increasing competition, and decelerated in the MRQ</li>
<li>Each of the last 2 quarters have seen some meaningful, non-recurring revenues lead to PSTG beating estimates</li>
</ul>


Enterprise storage hardware market faces numerous headwinds and increasing commoditization
STaaS is cannibalistic, facing increasing competition, and decelerated in the MRQ
Each of the last 2 quarters have seen some meaningful, non-recurring revenues lead to PSTG beating estimates


Pure Storage (PSTG): Market Leader Facing Commoditization of Its Products

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Mapletree North Asia Commercial Trust / Equity Bottom-Up

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2022-06/reit%201.PNG' alt='Indicative timeline for Trust Scheme between MCT and MNACT' />
 </figure>
 <div class='content-caption'>Indicative timeline for Trust Scheme between MCT and MNACT</div>
<figure>
 <img src='https://api2.sgx.com/sites/default/files/2022-06/reit%202.PNG' alt='Geographical breakdown of MPACT' />
 </figure>
 <div class='content-caption'>Geographical breakdown of MPACT</div>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
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THE ongoing merger of Mapletree Commercial Trust (MCT) and Mapletree North Asia Commercial Trust (MNACT) is on track to create one of the top 10 largest Reits in Asia.

 
The merged entity, Mapletree Pan Asia Commercial Trust (MPACT) will have an estimated market capitalisation of over S$10 billion and will hold a diversified portfolio of 18 commercial assets across Singapore, China, Hong Kong, Japan and South Korea, with assets under management (AUM) of approximately S$17.1 billion.

 
The Reit managers believe that the merger will provide a pathway for growth by merging MCT, a Singapore-focused Reit, with MNACT, a ready and established platform that has scale and reach in North Asia.

 

MCT said that this will in turn bring about immediate financial benefits and access to attractive footholds into North Asia supported by established local operating teams with extensive experience and a strong track record.

 
Other key benefits cited by the Reits include enhanced financial flexibility to pursue more growth opportunities such as larger acquisitions and capital recycling opportunities, increased liquidity and index representation, enhanced geographic diversification, reduced single asset concentration and improved tenant diversification as well as immediate financial benefits in terms of distribution per unit (DPU) and net asset value (NAV) accretion on a historical pro forma basis.

 
Post-merger, MPACT will hold best-in-class assets such as Festival Walk in Hong Kong, Mapletree Business City and VivoCity in Singapore.

 

The Reit managers believe that together, these will improve overall cash flow stability and resilience through market cycles.

 
MPACT will host major tenants with global businesses such as Google, BMW, Seiko, HP Japan and NTT UD.

 
Together, the top 10 tenants by gross rental income (GRI) will contribute 23 per cent of its GRI post-merger. This is down from MCT’s 27.7 per cent and MNACT’s 37.7 per cent, reducing income concentration.

 
Unitholders of MCT and MNACT have voted in favour of the merger last month.

 
The merger will be effected through the acquisition by MCT of all the issued and paid-up units of MNACT by way of a trust scheme of arrangement.

 

During the election period, each MNACT unitholder is entitled to choose only one form of scheme consideration: scrip-only, cash-and-scrip or cash-only options. The cash-only consideration will be the default form of the scheme consideration.

 

Based on indicative dates announced by the Reit managers, the election period is expected to run from Jun 15 to 29 while the merged entity is expected to begin trading on Jul 29.

 
MNACT’s estimated date of delisting will be on Aug 3.

 

REIT Watch is a weekly column on The Business Times, <a href="https://www.businesstimes.com.sg/companies-markets/merger-of-mct-and-mnact-creates-pathway-for-growth">read </a>the original version.
</body></html>


      
    
    Indicative timeline for Trust Scheme between MCT and MNACT

      
    
    Geographical breakdown of MPACT


THE ongoing merger of Mapletree Commercial Trust (MCT) and Mapletree North Asia Commercial Trust (MNACT) is on track to create one of the top 10 largest Reits in Asia.

 
The merged entity, Mapletree Pan Asia Commercial Trust (MPACT) will have an estimated market capitalisation of over S$10 billion and will hold a diversified portfolio of 18 commercial assets across Singapore, China, Hong Kong, Japan and South Korea, with assets under management (AUM) of approximately S$17.1 billion.

 
The Reit managers believe that the merger will provide a pathway for growth by merging MCT, a Singapore-focused Reit, with MNACT, a ready and established platform that has scale and reach in North Asia.

 

MCT said that this will in turn bring about immediate financial benefits and access to attractive footholds into North Asia supported by established local operating teams with extensive experience and a strong track record.

 
Other key benefits cited by the Reits include enhanced financial flexibility to pursue more growth opportunities such as larger acquisitions and capital recycling opportunities, increased liquidity and index representation, enhanced geographic diversification, reduced single asset concentration and improved tenant diversification as well as immediate financial benefits in terms of distribution per unit (DPU) and net asset value (NAV) accretion on a historical pro forma basis.

 
Post-merger, MPACT will hold best-in-class assets such as Festival Walk in Hong Kong, Mapletree Business City and VivoCity in Singapore.

 

The Reit managers believe that together, these will improve overall cash flow stability and resilience through market cycles.

 
MPACT will host major tenants with global businesses such as Google, BMW, Seiko, HP Japan and NTT UD.

 
Together, the top 10 tenants by gross rental income (GRI) will contribute 23 per cent of its GRI post-merger. This is down from MCT’s 27.7 per cent and MNACT’s 37.7 per cent, reducing income concentration.

 
Unitholders of MCT and MNACT have voted in favour of the merger last month.

 
The merger will be effected through the acquisition by MCT of all the issued and paid-up units of MNACT by way of a trust scheme of arrangement.

 

During the election period, each MNACT unitholder is entitled to choose only one form of scheme consideration: scrip-only, cash-and-scrip or cash-only options. The cash-only consideration will be the default form of the scheme consideration.

 

Based on indicative dates announced by the Reit managers, the election period is expected to run from Jun 15 to 29 while the merged entity is expected to begin trading on Jul 29.

 
MNACT’s estimated date of delisting will be on Aug 3.

 

REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - Merger of MCT and MNACT creates pathway for growth

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Capital Markets

Hewlett Packard Enterprise  / Equity Capital Markets

<ul><li>Hewlett Packard Enterprises delivered a below par result with revenues and earnings well below Wall Street expectations.</li><li>The recent macroeconomic environment has presented strategic challenges to businesses worldwide including Hewlett Packard.</li><li>Despite the inflationary pressures, Hewlett Packard maintained non-GAAP gross margins of 34%, thanks to disciplined execution and timely pricing actions.</li></ul>

Hewlett Packard Enterprises delivered a below par result with revenues and earnings well below Wall Street expectations.The recent macroeconomic environment has presented strategic challenges to businesses worldwide including Hewlett Packard.Despite the inflationary pressures, Hewlett Packard maintained non-GAAP gross margins of 34%, thanks to disciplined execution and timely pricing actions.

Hewlett Packard Enterprise Co.: The Servers Upside & Other Drivers

<ul><li>Hewlett Packard has commenced its fiscal year 2022 on a positive note though building strong momentum across its cloud business.</li><li>The demand for its differentiated edge-to-cloud portfolio remains strong, with order growth up 20% year over year.</li><li>A major point of concern for Hewlett Packard remains its slow top-line growth in the single digits which is significantly lower than its cloud peers and also a reason why the company trades at a significantly lower valuation.</li></ul>

Hewlett Packard has commenced its fiscal year 2022 on a positive note though building strong momentum across its cloud business.The demand for its differentiated edge-to-cloud portfolio remains strong, with order growth up 20% year over year.A major point of concern for Hewlett Packard remains its slow top-line growth in the single digits which is significantly lower than its cloud peers and also a reason why the company trades at a significantly lower valuation.

Hewlett Packard Enterprise Co.: Financial & Price Forecasts

United States

Hewlett Packard Enterprise Company provides information technology solutions. The Company offers enterprise security, analytics and data management, applications development and testing, data center care, cloud consulting, and business process services. Hewlett Packard Enterprise serves customers worldwide.

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Hewlett Packard Enterprise (HPE US)

Taiwan Tech Weekly: US Restrictions on Tech Sales to China to Expand

Also more signs of shift as Tata is preparing a JV with Wistron to produce iPhones and Taiwanese companies look to Southeast Asia and the USA.

Vincent Fernando, CFA

Pure Storage (PSTG): Market Leader Facing Commoditization of Its Products

Market share losses are likely occurring and the "recurring revenue STaaS" story may be decelerating amidst competition, pricing pressure, and...

Robert C Prather Jr

REIT Watch - Merger of MCT and MNACT creates pathway for growth

THE ongoing merger of Mapletree Commercial Trust (MCT) and Mapletree North Asia Commercial Trust (MNACT) is...

Singapore Exchange Ltd (SGX)

Hewlett Packard Enterprise Co.: The Servers Upside & Other Drivers

Hewlett Packard Enterprises delivered a below par result with revenues and earnings well below Wall Street expectations. The recent macroeconomic...

Baptista Research

Hewlett Packard Enterprise Co.: Financial & Price Forecasts

Hewlett Packard has commenced its fiscal year 2022 on a positive note though building strong momentum across its cloud business. The demand for...

Baptista Research

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