TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Capital Markets

GLOBALFOUNDRIES  / Equity Capital Markets

<p>We offer some thoughts on Global Foundries coming IPO. We admire the strategic pivot the company took two years ago, and think there is alot to like here. The proposed $25-30B valuation does seem a bit high given TSMC trades at 13x forward EBITDA and this would be closer to 20x. Maybe they should see if Intel is still interested...</p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

We offer some thoughts on Global Foundries coming IPO. We admire the strategic pivot the company took two years ago, and think there is alot to like here. The proposed $25-30B valuation does seem a bit high given TSMC trades at 13x forward EBITDA and this would be closer to 20x. Maybe they should see if Intel is still interested...Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

Global Foundries: Some Thoughts on the IPO

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<div class="content-highlight">
<p>It was announced that <a href="https://biz.chosun.com/industry/company/2021/10/09/3RSJJ472C5DHPKNURGL4YSJCFE/?utm_source=naver&amp;utm_medium=original&amp;utm_campaign=biz" target="_blank" rel="noopener">Hong Ra-Hee</a> (wife of the late Samsung Chairman Lee Gun-Hee) will sell about 1.43 trillion won worth 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>in order to pay for inheritance taxes. This represents 19.94 million shares at 71,500 won per share of Samsung Electronics.</p>
<p>In addition to Hong Ra-Hee's sale of Samsung Electronics, her daughters Lee Bu-Jin and Lee Seo-Hyun will sell 0.73 trillion won worth of <a href="https://www.smartkarma.com/entities/samsung-sds-co-ltd" target="_blank" data-smartkarma-citation="entities:509:1" rel="noopener">Samsung Sds (018260 KS)</a> and <a href="https://www.smartkarma.com/entities/samsung-life-insurance-co-ltd" target="_blank" data-smartkarma-citation="entities:510:1" rel="noopener">Samsung Life Insurance (032830 KS)</a>. Thus, the total amount of Samsung Group related shares (including Samsung Electronics) to be sold in this sale is about 2.2 trillion won ($1.8 billion).</p>
<p>The stake sale of Samsung Electronics could be quickly absorbed by the market while the sale sales of Samsung SDS and Samsung Life Insurance could take more time to digest. In addition, this will be a recurring event every year for the next five years with the Lee family continuing to sell down their stakes in Samsung Electronics and other Samsung affiliates in order to pay off the exorbitant amount of inheritance taxes. We believe that there could be continued concerns about this inheritance tax sale of Samsung SDS, Samsung Life Insurance, and Samsung Electronics which could further pressure these stocks negatively in the near term. </p>
</div>


It was announced that Hong Ra-Hee (wife of the late Samsung Chairman Lee Gun-Hee) will sell about 1.43 trillion won worth of Samsung Electronics (005930 KS) in order to pay for inheritance taxes. This represents 19.94 million shares at 71,500 won per share of Samsung Electronics.
In addition to Hong Ra-Hee's sale of Samsung Electronics, her daughters Lee Bu-Jin and Lee Seo-Hyun will sell 0.73 trillion won worth of Samsung Sds (018260 KS) and Samsung Life Insurance (032830 KS). Thus, the total amount of Samsung Group related shares (including Samsung Electronics) to be sold in this sale is about 2.2 trillion won ($1.8 billion).
The stake sale of Samsung Electronics could be quickly absorbed by the market while the sale sales of Samsung SDS and Samsung Life Insurance could take more time to digest. In addition, this will be a recurring event every year for the next five years with the Lee family continuing to sell down their stakes in Samsung Electronics and other Samsung affiliates in order to pay off the exorbitant amount of inheritance taxes. We believe that there could be continued concerns about this inheritance tax sale of Samsung SDS, Samsung Life Insurance, and Samsung Electronics which could further pressure these stocks negatively in the near term. 


Lee Family to Sell 2.2 Trillion Won Worth of Samsung Group Affiliates to Pay for Inheritance Tax

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Samsung Electronics Pref Shares / Event-Driven

<h2>3Q provision results</h2><p>Samsung Electronics disclosed its provisional 3Q results in a regulatory filing. Its quarterly sales are 73 trillion won, and operating profit is 15.8 trillion won.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/234/203/original/2.png?1633710725" class="editor-image img-responsive" data-smartkarma-image-id="234203"></figure><p>The operating profit is almost in line with the consensus of 15,831.1 billion won of the 22 local brokerages compiled by FnGuide, although the sales are slightly short of hitting the consensus, which I don't think would be a big deal.</p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/234/204/original/3.png?1633711857" class="editor-image img-responsive" data-smartkarma-image-id="234204"></figure></section><div class="content-caption"></div>
<p>Hence, Samsung Electronics' provisional earnings for this quarter were exactly within the market's expectations, so they did not significantly affect the share price immediately after the announcement.</p>
<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/234/205/original/1.png?1633712016" class="editor-image img-responsive" data-smartkarma-image-id="234205"></figure></section></section>

3Q provision resultsSamsung Electronics disclosed its provisional 3Q results in a regulatory filing. Its quarterly sales are 73 trillion won, and operating profit is 15.8 trillion won.The operating profit is almost in line with the consensus of 15,831.1 billion won of the 22 local brokerages compiled by FnGuide, although the sales are slightly short of hitting the consensus, which I don't think would be a big deal.

Hence, Samsung Electronics' provisional earnings for this quarter were exactly within the market's expectations, so they did not significantly affect the share price immediately after the announcement.


Samsung Electronics Yearend Special Dividend Possibility Checkup

Semiconductors, Memory and SSDs Specialist, Objective Analysis

Jim Handy

Semiconductors, Memory and SSDs Specialist

Objective Analysis

Objective Analysis offers third-party independent market research and data for the semiconductor industry and investors in the semiconductor industry.

Semiconductors, Memory and SSDs

Thematic (Sector/Industry)

<p>August semiconductor revenues set new records worldwide and in nearly every region.  This is a continuation of a growth trend that has been playing out since the end of 2019, with each month setting new records since December of last year.</p>

August semiconductor revenues set new records worldwide and in nearly every region.  This is a continuation of a growth trend that has been playing out since the end of 2019, with each month setting new records since December of last year.

August Semiconductor Revenues Break Records Once Again

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Quantitative Analysis

<p>This insight provides the output, and an overview of our, machine learning-driven, proprietary GEM screening model, which takes a three-pronged approach to find the best medium-term long ideas within the top100 largest stocks in the MSCI GEM Index. </p><p>The model is based on 1) a typical quantitative multifactor screening model, enhanced by two Artificial Intelligence Technology-based approaches using 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model. </p><p>This model, which has been developed and tweaked over the past 3 years (and implemented in its current state for 17 months), has a solid real-world performance track record, which I set out in the detail below. </p><p>Notable new entrants to the top decile this month include the beaten-down Chinese tech names such as <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> , and <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> as well as two Brazilian large caps in <a href="https://www.smartkarma.com/entities/vale-sa-7721577f-6c6a-4536-a829-92551c2bcd7f" target="_blank" data-smartkarma-citation="entities:27725:1" rel="noopener">Vale SA (VALE3 BZ)</a> and <a href="https://www.smartkarma.com/entities/ambev-sa" target="_blank" data-smartkarma-citation="entities:24454:1" rel="noopener">Ambev SA (ABEV3 BZ)</a>.</p><table class="table table-striped">
<colgroup>
<col>
<col>
<col>
<col>
<col>
</colgroup>
<tbody>
<tr>
<td style="text-align: center; width: 48pt;">rank</td>
<td style="width: 169pt;">Name</td>
<td style="width: 119pt;">Sector</td>
<td style="width: 95pt;">Location</td>
<td style="text-align: center; width: 48pt;">prev.</td>
</tr>
<tr>
<td style="text-align: center;">1</td>
<td>
<a href="https://www.smartkarma.com/entities/new-oriental-education-technology-group" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education &amp; Technology Group (9901 HK)</a> </td>
<td>Consumer Discretionary</td>
<td>China</td>
<td style="text-align: center;">10</td>
</tr>
<tr>
<td style="text-align: center;">2</td>
<td>
<a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a> </td>
<td>Communication</td>
<td>China</td>
<td style="text-align: center;">5</td>
</tr>
<tr>
<td style="text-align: center;">3</td>
<td>
<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> </td>
<td>Information Technology</td>
<td>Korea (South)</td>
<td style="text-align: center;">16</td>
</tr>
<tr>
<td style="text-align: center;">4</td>
<td>
<a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> </td>
<td>Information Technology</td>
<td>China</td>
<td style="text-align: center;">91</td>
</tr>
<tr>
<td style="text-align: center;">5</td>
<td>
<a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> </td>
<td>Consumer Discretionary</td>
<td>China</td>
<td style="text-align: center;">34</td>
</tr>
<tr>
<td style="text-align: center;">6</td>
<td>
<a href="https://www.smartkarma.com/entities/vale-sa-7721577f-6c6a-4536-a829-92551c2bcd7f" target="_blank" data-smartkarma-citation="entities:27725:1" rel="noopener">Vale SA (VALE3 BZ)</a> </td>
<td>Materials</td>
<td>Brazil</td>
<td style="text-align: center;">38</td>
</tr>
<tr>
<td style="text-align: center;">7</td>
<td>
<a href="https://www.smartkarma.com/entities/ambev-sa" target="_blank" data-smartkarma-citation="entities:24454:1" rel="noopener">Ambev SA (ABEV3 BZ)</a> </td>
<td>Consumer Staples</td>
<td>Brazil</td>
<td style="text-align: center;">35</td>
</tr>
<tr>
<td style="text-align: center;">8</td>
<td>
<a href="https://www.smartkarma.com/entities/ambev-sa" target="_blank" data-smartkarma-citation="entities:24454:1" rel="noopener">Ambev SA (ABEV3 BZ)</a> </td>
<td>Communication</td>
<td>China</td>
<td style="text-align: center;">43</td>
</tr>
<tr>
<td style="text-align: center;">9</td>
<td>
<a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a> </td>
<td>Financials</td>
<td>China</td>
<td style="text-align: center;">23</td>
</tr>
<tr>
<td style="text-align: center;">10</td>
<td>
<a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> </td>
<td>Consumer Discretionary</td>
<td>China</td>
<td style="text-align: center;">79</td>
</tr>
<tr><td colspan="5" style="text-align: left;">Source: FactSet financial data and analytics, my estimates and calculations, Tensorflow, Keras, Google Colaboratory, pandas</td></tr>
</tbody>
</table><p><em>As usual, please feel free to reach out for the full output table, any questions, clarifications needed or suggestions. </em></p>

This insight provides the output, and an overview of our, machine learning-driven, proprietary GEM screening model, which takes a three-pronged approach to find the best medium-term long ideas within the top100 largest stocks in the MSCI GEM Index. The model is based on 1) a typical quantitative multifactor screening model, enhanced by two Artificial Intelligence Technology-based approaches using 2) a Deep Neural Network model, and 3) a Recurrent Neural Network model. This model, which has been developed and tweaked over the past 3 years (and implemented in its current state for 17 months), has a solid real-world performance track record, which I set out in the detail below. Notable new entrants to the top decile this month include the beaten-down Chinese tech names such as Xiaomi Corp (1810 HK), Alibaba Group (9988 HK), Tencent (700 HK) , and JD.com Inc. (9618 HK) as well as two Brazilian large caps in Vale SA (VALE3 BZ) and Ambev SA (ABEV3 BZ).









rank
Name
Sector
Location
prev.


1

New Oriental Education &amp; Technology Group (9901 HK) 
Consumer Discretionary
China
10


2

NetEase (9999 HK) 
Communication
China
5


3

Samsung Electronics (005930 KS) 
Information Technology
Korea (South)
16


4

Xiaomi Corp (1810 HK) 
Information Technology
China
91


5

Alibaba Group (9988 HK) 
Consumer Discretionary
China
34


6

Vale SA (VALE3 BZ) 
Materials
Brazil
38


7

Ambev SA (ABEV3 BZ) 
Consumer Staples
Brazil
35


8

Ambev SA (ABEV3 BZ) 
Communication
China
43


9

Ping An Insurance (H) (2318 HK) 
Financials
China
23


10

JD.com Inc. (9618 HK) 
Consumer Discretionary
China
79

Source: FactSet financial data and analytics, my estimates and calculations, Tensorflow, Keras, Google Colaboratory, pandas

As usual, please feel free to reach out for the full output table, any questions, clarifications needed or suggestions. 

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 (SMSN LI)

Global Foundries: Some Thoughts on the IPO

We offer some thoughts on Global Foundries coming IPO. We admire the strategic pivot the company took two years ago. Valuation seems high though,...

Aaron Gabin

Lee Family to Sell 2.2 Trillion Won Worth of Samsung Group Affiliates to Pay for Inheritance Tax

It was announced that Hong Ra-Hee and her two daughters plan to sell about 2.2 trillion won worth of Samsung Group related shares to pay for...

Douglas Kim

Samsung Electronics Yearend Special Dividend Possibility Checkup

This is a follow-up insight on the possibility of Samsung Electronics' yearend special dividend for this year after Samsung disclosed the interim...

Sanghyun Park

August Semiconductor Revenues Break Records Once Again

Once again the semiconductor market has set a new revenue record. Just-reported August revenues make it the highest month in history. There's no...

Jim Handy

Screening for GEMs: October 2021

This insight provides an overview of our, machine learning-driven, proprietary GEM screening model, based on a Multifactor model, a Deep Neural...

Wium Malan, CFA

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