Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>Lee family plans to sell additional 2.6 trillion won worth of Samsung Group companies as part of their fourth installment of inheritance taxes. </li>
<li>This inheritance tax share sale is likely to have a negative impact on Samsung Electronics, Samsung C&amp;T, Samsung SDS, and Samsung Life Insurance. </li>
<li>This may be just a coincidence but the regulators announced today a temporary ban on stock short selling which should help the Lee family to unload their shares. </li>
</ul>


Lee family plans to sell additional 2.6 trillion won worth of Samsung Group companies as part of their fourth installment of inheritance taxes. 
This inheritance tax share sale is likely to have a negative impact on Samsung Electronics, Samsung C&amp;T, Samsung SDS, and Samsung Life Insurance. 
This may be just a coincidence but the regulators announced today a temporary ban on stock short selling which should help the Lee family to unload their shares. 


Lee Family to Sell 2.6 Trillion Won in Samsung Companies to Pay for Inheritance Taxes

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.

Equity Capital Markets

Samsung Electronics / Equity Capital Markets

<ul>
<li>KEB Hana Bank, on behalf of the Lee family, is looking to raise up to US$1.6bn via selling 0.5% of <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a> </li>
<li>The deal appears to be somewhat well flagged, however, the timing could have been much better.</li>
<li>In this note, we will run the deal through our ECM framework and talk about the recent updates.</li>
</ul>


KEB Hana Bank, on behalf of the Lee family, is looking to raise up to US$1.6bn via selling 0.5% of Samsung Electronics (005930 KS) 
The deal appears to be somewhat well flagged, however, the timing could have been much better.
In this note, we will run the deal through our ECM framework and talk about the recent updates.


Samsung Electronics Placement - Somewhat Well Flagged but Could Have Timed It Better

Technology / Semiconductor / Internet Research

Nicolas Baratte

Equity Bottom-Up

<ul>
<li>Tier-2 commodity Memory is a lousy business, which requires high Capex and R&amp;D, generates very low Free Cash Flows. DRAM is more sustainable than NAND as peak margins are higher. </li>
<li>Kioxia only makes NAND, has a high market share (16%) but is a Tier-2 supplier with a roadmap lagging SK Hynix by ~2 years, and a high exposure to Consumer. </li>
<li>The Memory cycle has recovered, probably close to peak earnings. That’s why stocks have been declining (Micron, Hynix).  Part 2 will cover financials (there's a bad surprise) and valuations. </li>
</ul>


Tier-2 commodity Memory is a lousy business, which requires high Capex and R&amp;D, generates very low Free Cash Flows. DRAM is more sustainable than NAND as peak margins are higher. 
Kioxia only makes NAND, has a high market share (16%) but is a Tier-2 supplier with a roadmap lagging SK Hynix by ~2 years, and a high exposure to Consumer. 
The Memory cycle has recovered, probably close to peak earnings. That’s why stocks have been declining (Micron, Hynix).  Part 2 will cover financials (there's a bad surprise) and valuations. 


What Is Kioxia? And Should You Bother? Part 1: Why NAND Is so Hard (And Not Attractive)

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

Taiwan Semiconductor (TSMC) / Equity Bottom-Up

<ul>
<li>September 2024 revenues of NT$251.87 billion, an increase of 0.4% MoM and an increase of 39.6% YoY.</li>
<li>Year to date revenue through September 2024 now totals NT$2,025.85 billion, an increase of 31.9% YoY.</li>
<li>Anticipating Q4 revenue forecast of $25.7 billion, up 10% QoQ. This would mean full year 2024 revenues of $88.8 billion, a 28.3% YoY increase</li>
</ul>


September 2024 revenues of NT$251.87 billion, an increase of 0.4% MoM and an increase of 39.6% YoY.
Year to date revenue through September 2024 now totals NT$2,025.85 billion, an increase of 31.9% YoY.
Anticipating Q4 revenue forecast of $25.7 billion, up 10% QoQ. This would mean full year 2024 revenues of $88.8 billion, a 28.3% YoY increase


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

<ul>
<li>The rally of the Asia Tech sector (+24% YTD) is highly concentrated in a handful of stocks. TSMC is up 64% but Samsung is down -22% YTD. </li>
<li>With the exception of AI, end-demand isn’t great. Smartphone up 8% but below 2019-21 level. PC flattish. x86 Server flattish. Telecom capex declining. Automotive electronics declining.   </li>
<li>AI is the most disruptive trend since Cloud in 2010. Years of increasing Capex are in front of us. But short-term, stocks are properly valued to rich, growth is slowing.</li>
</ul>


The rally of the Asia Tech sector (+24% YTD) is highly concentrated in a handful of stocks. TSMC is up 64% but Samsung is down -22% YTD. 
With the exception of AI, end-demand isn’t great. Smartphone up 8% but below 2019-21 level. PC flattish. x86 Server flattish. Telecom capex declining. Automotive electronics declining.   
AI is the most disruptive trend since Cloud in 2010. Years of increasing Capex are in front of us. But short-term, stocks are properly valued to rich, growth is slowing.


All Is Not Well in Tech Sector, AI Growth Slows, TSMC Expensive. Samsung, SK Hynix More Attractive.

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.

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Samsung Electronics (SMSD LI)

Lee Family to Sell 2.6 Trillion Won in Samsung Companies to Pay for Inheritance Taxes

After the market close on 10 January, it was reported that the Lee family will sell a total of 2.8 trillion won worth of Samsung Group related...

Douglas Kim

Samsung Electronics Placement - Somewhat Well Flagged but Could Have Timed It Better

KEB Hana Bank, on behalf of the Lee family, is looking to raise up to US$1.6bn via selling 0.5% of Samsung Electronics (005930 KS)

Sumeet Singh

What Is Kioxia? And Should You Bother? Part 1: Why NAND Is so Hard (And Not Attractive)

Tier-2 NAND memory supplier Kioxia faces challenges with high Capex and R&D costs, low Free Cash Flows, and lagging behind technology leader SK...

Nicolas Baratte

TSMC Q324 Earnings Preview

September 24 revenues of NT$251.87 billion, +0.4% MoM & +39.6% YoY. YTD revenue NT$2,025.85 billion, +31.9% YoY. Anticipating FY2024 revenues of...

William Keating

All Is Not Well in Tech Sector, AI Growth Slows, TSMC Expensive. Samsung, SK Hynix More Attractive.

Difficult juncture for Asia Tech. Consumer and Enterprise segments are flattish; stocks have underperformed. AI is the only growth driver, growth...

Nicolas Baratte

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52-week Range

Market Cap (USDm)

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Dividend (Yield)

Lee Family to Sell 2.6 Trillion Won in Samsung Companies to Pay for Inheritance Taxes

After the market close on 10 January, it was reported that the Lee family will sell a total of 2.8 trillion won worth of Samsung Group related...

Douglas Kim

Samsung Electronics Placement - Somewhat Well Flagged but Could Have Timed It Better

KEB Hana Bank, on behalf of the Lee family, is looking to raise up to US$1.6bn via selling 0.5% of Samsung Electronics (005930 KS)

Sumeet Singh

What Is Kioxia? And Should You Bother? Part 1: Why NAND Is so Hard (And Not Attractive)

​Tier-2 NAND memory supplier Kioxia faces challenges with high Capex and R&D costs, low Free Cash Flows, and lagging behind technology leader SK...

Nicolas Baratte

TSMC Q324 Earnings Preview

September 24 revenues of NT$251.87 billion, +0.4% MoM & +39.6% YoY. YTD revenue NT$2,025.85 billion, +31.9% YoY. Anticipating FY2024 revenues of...

William Keating

All Is Not Well in Tech Sector, AI Growth Slows, TSMC Expensive. Samsung, SK Hynix More Attractive.

Difficult juncture for ​Asia Tech. Consumer and Enterprise segments are flattish; stocks have underperformed. AI is the only growth driver, growth...

Nicolas Baratte

Tier-2 NAND memory supplier Kioxia faces challenges with high Capex and R&D costs, low Free Cash Flows, and lagging behind technology leader SK...

Difficult juncture for Asia Tech. Consumer and Enterprise segments are flattish; stocks have underperformed. AI is the only growth driver, growth...