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

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Ingenuity

Our focus is exclusively on in-depth research & consulting in the broader semiconductor industry. We focus on the key players, namely Intel, Micron, Qualcomm, Apple, Samsung, NVIDIA, AMD, TSMC & Global Foundries - as well as some of the lesser known, but nonetheless critical, companies such as ASML (for EUV), Mellanox, Cavium, Xilinx etc. We specialise in their products, roadmaps, process technologies, competitive advantages & threats etc. We also help our clients understand the implications of new and emerging technologies, e.g. 3D X-Point, 3D NAND, Carbon Nanotubes, Autonomous Driving, Graphene, Silicon Photonics, Wafer-Level Optics, Artificial Intelligence, FPGA, GPU, ASIC etc. 

Semiconductor Analysis & Research

Equity Bottom-Up

<ul>
<li>The agreement helps Intel fill up some long-underutilised fab capacity at their Rio Rancho, New Mexico facility</li>
<li>Tower likely gets a bargain-basement opportunity to increase their percentage of 300mm wafer capacity</li>
<li>Tower's automotive business grew from 11% of revenues in 2022 to 19% of revenues in H1'23. Greater 300mm capacity will help them meet this demand once foundry starts to recover. </li>
</ul>


The agreement helps Intel fill up some long-underutilised fab capacity at their Rio Rancho, New Mexico facility
Tower likely gets a bargain-basement opportunity to increase their percentage of 300mm wafer capacity
Tower's automotive business grew from 11% of revenues in 2022 to 19% of revenues in H1'23. Greater 300mm capacity will help them meet this demand once foundry starts to recover. 


Intel's Deal With Tower Semi Is Basically A Rent-A-Fab Scheme

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

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

<ul>
<li>ARM IPO -- TSMC says will decide this week whether to participate. ARM is a company potentially without peers and enjoys support from Apple, Nvidia, AMD, and Samsung.</li>
<li>Elan, Yageo, ChipMOS top gainers in Taiwan -- Three of our Longs have done well most recently on high volume and little new public news.</li>
<li>Recent Dell &amp; HP results provide additional clarity on the coming AI PC wave.</li>
</ul>


ARM IPO -- TSMC says will decide this week whether to participate. ARM is a company potentially without peers and enjoys support from Apple, Nvidia, AMD, and Samsung.
Elan, Yageo, ChipMOS top gainers in Taiwan -- Three of our Longs have done well most recently on high volume and little new public news.
Recent Dell &amp; HP results provide additional clarity on the coming AI PC wave.


Taiwan Tech Weekly: TSMC to Decide on ARM This Week; Elan, Yageo, ChipMOS Flying; AI PC Wave Signals

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<ul>
<li>Our base case valuation of Arm Holdings is target price of US$36.3 per share, which represents 23% lower than the lower end of the IPO price range. </li>
<li>We estimate Arm's sales to reach US2,832 million in FY2024 (up 5.7% YoY) and US$3,038 million in FY 2025 (up 7.3% YoY). </li>
<li>Given the lack of upside, we have a NEGATIVE view of Arm Holdings. Our valuation sensitivity analysis suggests implied price of US$29.4 to US$43.9 per share. </li>
</ul>


Our base case valuation of Arm Holdings is target price of US$36.3 per share, which represents 23% lower than the lower end of the IPO price range. 
We estimate Arm's sales to reach US2,832 million in FY2024 (up 5.7% YoY) and US$3,038 million in FY 2025 (up 7.3% YoY). 
Given the lack of upside, we have a NEGATIVE view of Arm Holdings. Our valuation sensitivity analysis suggests implied price of US$29.4 to US$43.9 per share. 


Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> aims to raisebetween US$4.5-4.9bn via selling some of its stake in <a href="https://www.smartkarma.com/entities/arm-holdings-inc" target="_blank" data-smartkarma-citation="entities:21816:1" rel="noopener">ARM Holdings</a>' US IPO.</li>
<li>ARM develops and licences high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.</li>
<li>In our previous notes, we looked at the company’s past performance. In this note, we talk about valuation.</li>
</ul>



Softbank Group (9984 JP) aims to raisebetween US$4.5-4.9bn via selling some of its stake in ARM Holdings' US IPO.
ARM develops and licences high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.
In our previous notes, we looked at the company’s past performance. In this note, we talk about valuation.


ARM Holdings IPO - Thoughts on Valuation - Still Very Demanding

United States

Intel Corporation designs, manufactures, and sells computer components and related products.  The Company's major products include microprocessors, chipsets, embedded processors and microcontrollers, flash memory products, graphics products, network and communications products, systems management software, conferencing products, and digital imaging products.

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Intel Corp (INTC 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

Intel's Deal With Tower Semi Is Basically A Rent-A-Fab Scheme

Intel's recently announced "Capacity Corridor" deal with Tower help them fill up some long-underutilised fab capacity at their Rio Rancho, New...

William Keating

Taiwan Tech Weekly: TSMC to Decide on ARM This Week; Elan, Yageo, ChipMOS Flying; AI PC Wave Signals

Elan, Yageo, ChipMOS top gainers in Taiwan -- Three of our Longs have done well most recently on high volume and limited public developments.

Vincent Fernando, CFA

ARM Holdings IPO Valuation Analysis

Our base case valuation of Arm Holdings is target price of US$36.3 per share, which represents 23% lower than the lower end of the IPO price range.

Douglas Kim

ARM Holdings IPO - Thoughts on Valuation - Still Very Demanding

Softbank Group (9984 JP) aims to raisebetween US$4.5-4.9bn via selling some of its stake in ARM Holdings' US IPO. In this note, we provide our...

Sumeet Singh

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