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.

Thematic (Sector/Industry)

<p>This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. </p><p><strong><em>Companies mentioned this week:</em></strong></p><p><a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a>, <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>, <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a>, <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a>, <a href="https://www.smartkarma.com/entities/hyundai-mobis-co-ltd" target="_blank" data-smartkarma-citation="entities:6089:1" rel="noopener">Hyundai Mobis (012330 KS)</a></p>

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. Companies mentioned this week:Meituan (3690 HK), TSMC (2330 TT), Sony Corp (6758 JP), Samsung Electronics (005930 KS), SK Hynix (000660 KS), Hyundai Motor Co (005380 KS), Hyundai Mobis (012330 KS)

Global Emerging Markets Weekly: 15 October 2021

Latest News from the World’s Leading Innovators

Granite Bay Capital

An innovation focussed investment company

Granite Bay Capital is an innovation focussed investment company with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity.

<h2>Headline Developments</h2><p>At 90, William Shatner became the oldest person to ever reach space, telling Blue Origin’s Jeff Bezos “what you have given me is the most profound experience” that “I hope I never recover from”.  I’m sure Bezos also breathed a huge sigh of relief because if anything happened to Captain Kirk there would have been one hell of a reaction from Star Trek fans!</p><p>Microsoft (MSFT) and Nvidia (NVDA) have trained the world’s most advanced AI-powered language model, Megatron-Turing Natural Language Generation (MT-NLP), containing 530 billion parameters to achieve unmatched accuracy across natural language tasks such as reading comprehension and commonsense reasoning.</p>

Headline DevelopmentsAt 90, William Shatner became the oldest person to ever reach space, telling Blue Origin’s Jeff Bezos “what you have given me is the most profound experience” that “I hope I never recover from”.  I’m sure Bezos also breathed a huge sigh of relief because if anything happened to Captain Kirk there would have been one hell of a reaction from Star Trek fans!Microsoft (MSFT) and Nvidia (NVDA) have trained the world’s most advanced AI-powered language model, Megatron-Turing Natural Language Generation (MT-NLP), containing 530 billion parameters to achieve unmatched accuracy across natural language tasks such as reading comprehension and commonsense reasoning.

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

<div>
<p>PHC Holdings and its shareholders raised around US$645m, via selling a mix of primary and secondary shares in its Japan IPO. The company is backed by KKR (48.7% stake pre-listing), Mitsui (21.5%), Life Science Institute (13.4%) and Panasonic (11.5%).</p>
</div>
<div>We have covered the various aspects of the deal in our earlier notes:</div>
<div>
<ul>
<li>
<a href="https://www.smartkarma.com/insights/phc-holdings-pre-ipo-many-companies-rolled-into-one" target="_blank" rel="noopener"> PHC Holdings Pre-IPO - Many companies rolled into one</a><a href="https://www.smartkarma.com/insights/phc-holdings-pre-ipo-peer-comparison" target="_blank" rel="noopener"></a>
</li>
<li>
<a href="https://www.smartkarma.com/insights/phc-holdings-pre-ipo-peer-comparison" target="_blank" rel="noopener"> PHC Holdings Pre-IPO - Peer Comparison</a> </li>
<li><a href="https://www.smartkarma.com/insights/phc-holdings-pre-ipo-thoughts-on-valuation" target="_blank" rel="noopener">PHC Holdings Pre-IPO - Thoughts on Valuation, and</a></li>
<li><a href="https://www.smartkarma.com/insights/phc-holdings-ipo-should-have-cut-the-price-not-just-the-size" target="_blank" rel="noopener">PHC Holdings IPO - Should Have Cut the Price, Not Just the Size</a></li>
</ul>
<p>In this note, we will talk about the trading dynamics.</p>
</div>


PHC Holdings and its shareholders raised around US$645m, via selling a mix of primary and secondary shares in its Japan IPO. The company is backed by KKR (48.7% stake pre-listing), Mitsui (21.5%), Life Science Institute (13.4%) and Panasonic (11.5%).

We have covered the various aspects of the deal in our earlier notes:



 PHC Holdings Pre-IPO - Many companies rolled into one


 PHC Holdings Pre-IPO - Peer Comparison 
PHC Holdings Pre-IPO - Thoughts on Valuation, and
PHC Holdings IPO - Should Have Cut the Price, Not Just the Size

In this note, we will talk about the trading dynamics.


PHC Holdings IPO Trading - Needs to Start Acting like One Company to Move Higher

Research from Drawbridge Research, Drawbridge Research

Drawbridge Research

Research from Drawbridge Research

The team at Drawbridge Research believes that to take advantage of market mispricing a first principles understanding must be obtained on what a company fundamentally does, the purpose that gives that company a reason to exist, and how that company executes on serving its purpose and function.

Once a first principles understanding is obtained, we believe it becomes possible to discern real world fact from market fiction. A fundamental understanding, coupled with this separation, allows for an evaluation of a company’s inherent value that is not biased by market sentiment.

This approach requires significant qualitative research coupled with a detailed understanding of company financial accounts to understand what attributes drive and protect profitability. These two parts of Drawbridge’s research approach are not viewed separately by the research team but instead as two interdependent parts of a broad, exhaustive, and complete investment research process.

Price is equally paramount. This means that a company must be priced at a level where it offers significant growth in value, as our goal is to achieve outsized returns, not to simply collect quality companies. In addition to the upside potential, a company must be attractively priced enough to ensure the preservation of capital in the case our thesis turns out to be wrong.

Equity Bottom-Up

<p>This is the third and final part of our three part series on Sony Group. In this note we look at Sony’s Gaming and Network Services (G&amp;NS) segment and the fundamental pillars supporting its profitability. By doing this we uncover that the business is dependent on the technical competitiveness and the catalogue of game titles available on PlayStation, Sony’s console platform. We look at the primary known threat to the business’s profitability, which is cloud gaming. Breaking down how cloud gaming is technically achieved we are able to compare the technical limitations and advantages of both console based and cloud based gaming. Through this we can determine whether cloud gaming posses a disruptive threat as a substitute to Sony’s entrenched console platform, or if instead cloud gaming can be viewed as a complimentary service supporting further growth. In regard to the PlayStation business, we also analyse the current heightened level of deal activity in the game development space. Consolidation amongst game developers and increased ownership by the platform operators is seen as being indicative of a maturing gaming industry. Given this we look at Sony’s level of investment in gaming software to ascertain whether the company’s consistently strong performance over the past 2 decades in the home console market has allowed the company to gain a critical mass of IP and third party titles on its platform to continue attracting gamers.</p><p>Final comments outline how the company’s subsidiaries are effectively collaborating to create value no other company can, and why this second layer of value creation is being missed. The research note then concludes the series by valuing Sony via a sum of the parts valuation and valuing the financial business at the implied valuation Sony paid in early 2020.</p>

This is the third and final part of our three part series on Sony Group. In this note we look at Sony’s Gaming and Network Services (G&amp;NS) segment and the fundamental pillars supporting its profitability. By doing this we uncover that the business is dependent on the technical competitiveness and the catalogue of game titles available on PlayStation, Sony’s console platform. We look at the primary known threat to the business’s profitability, which is cloud gaming. Breaking down how cloud gaming is technically achieved we are able to compare the technical limitations and advantages of both console based and cloud based gaming. Through this we can determine whether cloud gaming posses a disruptive threat as a substitute to Sony’s entrenched console platform, or if instead cloud gaming can be viewed as a complimentary service supporting further growth. In regard to the PlayStation business, we also analyse the current heightened level of deal activity in the game development space. Consolidation amongst game developers and increased ownership by the platform operators is seen as being indicative of a maturing gaming industry. Given this we look at Sony’s level of investment in gaming software to ascertain whether the company’s consistently strong performance over the past 2 decades in the home console market has allowed the company to gain a critical mass of IP and third party titles on its platform to continue attracting gamers.Final comments outline how the company’s subsidiaries are effectively collaborating to create value no other company can, and why this second layer of value creation is being missed. The research note then concludes the series by valuing Sony via a sum of the parts valuation and valuing the financial business at the implied valuation Sony paid in early 2020.

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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.

Taiwan Semiconductor (TSMC) / Equity Bottom-Up

<p>The <a href="https://asia.nikkei.com/Business/Tech/Semiconductors/Sony-considering-investment-in-TSMC-s-first-chip-plant-in-Japan" target="_blank" rel="noopener">Nikkei just reported</a> that Sony was considering jointly investing in a new $7bn manufacturing facility with TSMC. These are the first details to emerge regarding the TSMC investment in Japan that has been a point of discussion since it first announced it was setting up a research centre here.</p>

The Nikkei just reported that Sony was considering jointly investing in a new $7bn manufacturing facility with TSMC. These are the first details to emerge regarding the TSMC investment in Japan that has been a point of discussion since it first announced it was setting up a research centre here.

TSMC – First Details of Japanese Investment Emerge

Japan

Sony Corporation manufactures audio, home video game consoles, communications, key device and information technology products for the consumer and professional markets.  The Company's other businesses include music, pictures, computer entertainment, and online businesses.

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Sony Corp (6758 JP)

Global Emerging Markets Weekly: 15 October 2021

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity...

Wium Malan, CFA

Weekly Innovation Review (WIRE) #53

At 90, William Shatner became the oldest person to ever reach space, telling Blue Origin’s Jeff Bezos “what you have given me is the most profound...

Granite Bay Capital

PHC Holdings IPO Trading - Needs to Start Acting like One Company to Move Higher

PHC Holdings and its shareholders raised around US$645m, via selling a mix of primary and secondary shares in its Japan IPO. In this note, we will...

Sumeet Singh

Sony Part 3: State of Play

In this note we look at Sony’s Gaming and Network Services (G&NS) segment and the fundamental pillars supporting its profitability.

Drawbridge Research

TSMC – First Details of Japanese Investment Emerge

Sony is considering jointly investing in a new $7bn manufacturing facility with TSMC. These are the first details to emerge regarding the TSMC...

Mio Kato

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