APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC 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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/socionext-inc" target="_blank" data-smartkarma-citation="entities:36351:1" rel="noopener">Socionext (6526 JP)</a> is looking to raise up to US$285m in its Japan IPO.</li>
<li>Socionext is a fabless semiconductor provider in Japan. Sales and profitability has been on an overall uptrend, and design wins in earlier fiscal years should materialize in the coming periods. </li>
<li>However, the firm has generated a substantial portion of revenue from a related party and is reliant on a particular foundry for its front-end manufacturing.</li>
</ul>



Socionext (6526 JP) is looking to raise up to US$285m in its Japan IPO.
Socionext is a fabless semiconductor provider in Japan. Sales and profitability has been on an overall uptrend, and design wins in earlier fiscal years should materialize in the coming periods. 
However, the firm has generated a substantial portion of revenue from a related party and is reliant on a particular foundry for its front-end manufacturing.


Socionext Pre-IPO - Could Expect a Further Bump in Profitability, Although Some Hidden Risks Remain

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Equity Bottom-Up

<ul>
<li>Intel and Brookefield Asset Management recently announced that they intend to jointly invest US$30 billion into building Intel foundries in Arizona, leveraging on the US CHIPS Act.</li>
<li>Although inflation and declining consumer demand continue to affect all chipmakers, U.S. strategic objectives and policies will set Intel on a new growth trajectory and competitive position in our view.</li>
<li>A Long Intel/ Short Taiwan semiconductor strategy present a compelling opportunity. We prefer Long Intel vs. Short UMC, however, we expect Long Intel vs. Short TSMC to also be profitable.</li>
</ul>


Intel and Brookefield Asset Management recently announced that they intend to jointly invest US$30 billion into building Intel foundries in Arizona, leveraging on the US CHIPS Act.
Although inflation and declining consumer demand continue to affect all chipmakers, U.S. strategic objectives and policies will set Intel on a new growth trajectory and competitive position in our view.
A Long Intel/ Short Taiwan semiconductor strategy present a compelling opportunity. We prefer Long Intel vs. Short UMC, however, we expect Long Intel vs. Short TSMC to also be profitable.


US CHIPS Act: Long Intel Vs. Short TSMC or UMC?

Thematic (Sector/Industry)

<ul>
<li>We look at where Taiwan tech sits in the cycle and which companies appear better or worse placed to weather the coming inventory correction.</li>
<li>Semiconductor inventory to sales and gross margins near record levels, hardware metrics are high as well but less extreme.</li>
<li>Formosa SUMCO, Macronix, Nanya Technology, Hon Hai Precision, and Flexium appear ahead of the inventory correction curve and well-placed as long positions for the current phase of the cycle.</li>
</ul>


We look at where Taiwan tech sits in the cycle and which companies appear better or worse placed to weather the coming inventory correction.
Semiconductor inventory to sales and gross margins near record levels, hardware metrics are high as well but less extreme.
Formosa SUMCO, Macronix, Nanya Technology, Hon Hai Precision, and Flexium appear ahead of the inventory correction curve and well-placed as long positions for the current phase of the cycle.


Taiwan Tech: Who's Ahead of the Inventory Cycle?

Equity Long-Short Analyst

Pyari Menon

<ul>
<li>Relative underperformance of <a href="https://www.smartkarma.com/entities/intel-corp" target="_blank" data-smartkarma-citation="entities:16764:1" rel="noopener">Intel Corp (INTC US)</a>  versus <a href="https://www.smartkarma.com/entities/advanced-micro-devices-inc" target="_blank" data-smartkarma-citation="entities:19009:1" rel="noopener">Advanced Micro Devices (AMD US)</a>  over the last decade should reverse.  We discuss what it would take in the note.</li>
<li>Intel leads in number and quality of innovations versus AMD in core areas of Design and Manufacturing, but AMD's use of TSMC has been a huge part of AMD's outperformance</li>
<li>If Intel adapts to new realities and uses <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>  for next-gen products, outperformance versus AMD is highly likely otherwise given TSMC's very significant lead in manufacturing very doubtful. </li>
</ul>


Relative underperformance of Intel Corp (INTC US)  versus Advanced Micro Devices (AMD US)  over the last decade should reverse.  We discuss what it would take in the note.
Intel leads in number and quality of innovations versus AMD in core areas of Design and Manufacturing, but AMD's use of TSMC has been a huge part of AMD's outperformance
If Intel adapts to new realities and uses TSMC (2330 TT)  for next-gen products, outperformance versus AMD is highly likely otherwise given TSMC's very significant lead in manufacturing very doubtful. 


Long Intel/Short AMD; Analysis of Technical Publications Suggests TSMC Will Play a Critical Role

Asia biased macro & technical analysis, Untying The Gordian Knot

Untying The Gordian Knot

Asia biased macro & technical analysis

A differentiated process with a primary focus on Asia. Technical Analysis as core and Macro drivers that could bring the view to fruition & changes that could make the idea fall apart. The objective is to be the best in class, hence corner shop.

Technical Analysis

<ul><li>While much focus has been on EURO/USD cross, Asian currencies haven’t seen that much focus due to range-bound markets.</li><li>That is until two weeks ago when the USD/YEN breakout caught the imagination and became the centre of all things foreign exchange. Bonds &amp; short-term interest rates have been the macro focus of 2022.</li><li>The extent to which US bond yields have risen signals that the bond sell-off is not about to end despite the inverted yield curve. It is likely to cause more pain for EM countries.</li></ul>

While much focus has been on EURO/USD cross, Asian currencies haven’t seen that much focus due to range-bound markets.That is until two weeks ago when the USD/YEN breakout caught the imagination and became the centre of all things foreign exchange. Bonds &amp; short-term interest rates have been the macro focus of 2022.The extent to which US bond yields have risen signals that the bond sell-off is not about to end despite the inverted yield curve. It is likely to cause more pain for EM countries.

Taiwan

ASE Technology Holding Co., Ltd. offers assembly and testing services. The Company provides outsourced assembly, semiconductor testing, semiconductor packaging, and other related services. ASE Technology Holding operates in Taiwan.

MediaTek Inc. is a fabless semiconductor company for wireless communications and digital multimedia solutions. The company provides SOC system solutions for wireless communications, high-definition TV, optical storage, DVD and Blu-ray products.

United Microelectronics Corporation designs, manufactures, and markets integrated circuits (ICs) and related electronic products.  The Company's main products are consumer electronic ICs, memory ICs, personal computer peripheral ICs, and communication ICs.

eMemory Technology, Inc. develops and provides logic non-volatile memory (LogicNVM) technology. The company licenses its intellectual property to semiconductor foundries, integrated devices manufacturers (IDMs), and fabless design houses around the world.

Nanya Technology Corp. manufactures and markets dynamic random access memories (DRAMs).  The Company sells its products in Taiwan and exports worldwide.

Realtek Semiconductor Corp. designs, tests, and distributes integrated circuits which are used in consumer electronics, computer systems and peripherals, and communication network hardware.  The Company also provides technical counseling and systems software services.

Global Unichip Corporation designs and produces a wide variety of silicon chips.

Novatek Microelectronics Corporation designs, manufactures, and markets integrated circuits (ICs).  The Company's products are used in telecommunication, computer peripherals, and LCD (liquid crystal display) drivers.

Vanguard International Semiconductor Corporation offers integrated circuit foundry services.  The Company manufactures 0.18um logic, mixed-signal, analog, high voltage, low power, CMOS RF, flash, embedded memory, and bipolar CMOS DMOS semiconductors.

Tokyo Electron Limited manufactures and sells industrial electronics products, such as semiconductor manufacturing machines, computer system, and electronic components.  The Company products are sold in US, Taiwan, and others as well as in Japan.

Applied Materials, Inc. develops, manufactures, markets, and services semiconductor wafer fabrication equipment and related spare parts for the worldwide semiconductor industry.  The Company's customers include semiconductor wafer and integrated circuit manufacturers, flat panel liquid crystal displays, solar photovoltaic cells and modules and other electronic devices manufacturers.

QUALCOMM, Inc . manufactures digital wireless communications equipment.  The Company licenses its code division multiple access (CDMA) and orthogonal frequency division multiplexing access intellectual property to other companies, and produces CDMA-based integrated circuits; and produces equipment and software used to track workers and assets; and software for wireless content enablement.

Broadcom Inc. designs, develops, and supplies semiconductor and infrastructure software solutions. The Company offers storage adapters, controllers, networking processors, motion control encoders, and optical sensors, as well as infrastructure and security software to modernize, optimize, and secure the most complex hybrid environments. Broadcom serves customers worldwide.

KLA-Tencor Corporation manufactures yield management and process monitoring systems for the semiconductor industry.  The Company's systems are used to analyze product and process quality at critical steps in the manufacture of circuits and provide feedback so that fabrication problems can be identified. KLA-Tencor operates sales, service, and application centers worldwide.

Lam Research Corporation manufactures, markets, and services semiconductor processing equipment used in the making of integrated circuits.  The Company's products are used to deposit special films on a silicon wafer and etch away portions of various films to create a circuit design.  Lam sells its products around the world.

Monolithic Power Systems Inc specializes in high-performance, integrated power solutions. The Company provides small, highly energy efficient, easy-to-use power solutions for systems found in industrial applications, telecom infrastructures, cloud computing, automotive, and consumer applications.

ON Semiconductor Corporation supplies analog, standard logic, and discrete semiconductors for data and power management. The Company's products include integrated circuits, and analog ICs. ON also offers discrete semiconductors in a variety of surface mount and standard packages.

Lasertec Corporation develops, designs, manufactures and markets photomask inspection systems to make semiconductor devices, confocal scanning laser microscopes and liquid crystal display (LCD) inspection systems.

Microchip Technology Incorporated designs, manufactures, and markets microcontrollers, related mixed-signal and memory products, and application development systems for high-volume embedded control applications. The Company also designs, develops, and markets linear/mixed-signal, power management, and thermal management products.

Taiwan Semiconductor Manufacturing Company, Ltd. manufactures and markets integrated circuits. The Company provides the following services: wafer manufacturing, wafer probing, assembly and testing, mask production, and design services. TSMC's ICs are used in computer, communication, consumer electronics, automotive, and industrial equipment industries.

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Taiwan Semiconductor (TSMC) (2330 TT)

Socionext Pre-IPO - Could Expect a Further Bump in Profitability, Although Some Hidden Risks Remain

Socionext (6526 JP) is looking to raise up to US$285m in its Japan IPO. Socionext is a fabless semiconductor provider in Japan.

Clarence Chu

US CHIPS Act: Long Intel Vs. Short TSMC or UMC?

Intel plans to invest US$30bn into building foundries in the US. This could set Intel on a new growth trajectory and creates an opportunity for a...

Vincent Fernando, CFA

Taiwan Tech: Who's Ahead of the Inventory Cycle?

We look at where Taiwan tech sits in the cycle and which companies appear better or worse placed to weather the coming inventory correction.

Vincent Fernando, CFA

Long Intel/Short AMD; Analysis of Technical Publications Suggests TSMC Will Play a Critical Role

We analyze the relative innovation strengths of Intel and AMD in design and manufacture and how much ahead TSMC is in manufacturing innovations...

Pyari Menon

A powder keg

While much focus has been on EURO/USD cross, Asian currencies haven’t seen that much focus due to range-bound markets. That is until two weeks ago...

Untying The Gordian Knot

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