Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li><em>The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.</em></li>
<li>Last week saw NORTHBOUND net SELL RMB 11.8bn of A-shares. NORTHBOUND bought utilities and raw materials and sold everything else, especially consumer names. Appliances remain on the sell side.</li>
<li>It is notable that net flows as a percentage of value traded are clearly "short gamma", which is to say, sector underperformers are being sold, not bought. </li>
</ul>


The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net SELL RMB 11.8bn of A-shares. NORTHBOUND bought utilities and raw materials and sold everything else, especially consumer names. Appliances remain on the sell side.
It is notable that net flows as a percentage of value traded are clearly "short gamma", which is to say, sector underperformers are being sold, not bought. 


Mainland Connect NORTHBOUND Flows (To 28 June 2024): BIG Consumer Name Selling Again

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

Equity Bottom-Up

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

<ul>
<li>Apple Increasing Chip Orders with TSMC -- Expecting iPhone 16 Sales to be Much Stronger Than iPhone 15 Thanks to AI</li>
<li>Google Said to be Shifting to TSMC from Samsung for Next Generation AI Mobile Phone Chips</li>
<li>This June 28th piece appears to be timely -- Memory Monitor: Micron's Shares May Be Falling But Results' Industry Implications Are Positive</li>
</ul>


Apple Increasing Chip Orders with TSMC -- Expecting iPhone 16 Sales to be Much Stronger Than iPhone 15 Thanks to AI
Google Said to be Shifting to TSMC from Samsung for Next Generation AI Mobile Phone Chips
This June 28th piece appears to be timely -- Memory Monitor: Micron's Shares May Be Falling But Results' Industry Implications Are Positive


Taiwan Tech Weekly: Apple Hikes TSMC Orders on Strong IPhone 16 Hopes; Google Shifts AI Chip to TSMC

Taiwan Tech Focused Senior Analyst

Patrick Liao

King Yuan Electronics Co, Ltd. / Equity Bottom-Up

<ul>
<li>The <a href="https://www.smartkarma.com/entities/king-yuan-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:6630:1" rel="noopener">King Yuan Electronics Co, Ltd. (2449 TT)</a> outlook for 3Q24 could see a 5-10% quarter-on-quarter growth at present.  </li>
<li>
<a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA Corp (NVDA US)</a>  is currently the second-largest client of KYEC, and its business is rapidly expanding.</li>
<li>
<a href="https://www.smartkarma.com/entities/stmicroelectronics-nv-b981e30b-2a53-4f3d-b1cb-adaac140121c" target="_blank" data-smartkarma-citation="entities:33346:1" rel="noopener">STMicroelectronics NV (STM US)</a> and <a href="https://www.smartkarma.com/entities/will-semiconductor-co-ltd-shan" target="_blank" data-smartkarma-citation="entities:28274:1" rel="noopener">Will Semiconductor Shan (603501 CH)</a> are currently the third and fourth largest clients, respectively.</li>
</ul>


The King Yuan Electronics Co, Ltd. (2449 TT) outlook for 3Q24 could see a 5-10% quarter-on-quarter growth at present.  

NVIDIA Corp (NVDA US)  is currently the second-largest client of KYEC, and its business is rapidly expanding.

STMicroelectronics NV (STM US) and Will Semiconductor Shan (603501 CH) are currently the third and fourth largest clients, respectively.


KYEC (2449.TT): AI Highly Growth Potential may exceed Expectation.

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

<ul>
<li>There could be three changes for the CES China Semiconductor Chips Index at the close of trading on 13 December.</li>
<li>Based on the assets tracking the index, passive trackers will need to trade between 0.1-0.3x ADV in the stocks.</li>
<li>There will be selling in <a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-in" target="_blank" data-smartkarma-citation="entities:31062:1" rel="noopener">Semiconductor Manufacturing International Corporation (SMIC) (688981 CH)</a> to cap the stock at 10% of the index weight.</li>
</ul>


There could be three changes for the CES China Semiconductor Chips Index at the close of trading on 13 December.
Based on the assets tracking the index, passive trackers will need to trade between 0.1-0.3x ADV in the stocks.
There will be selling in Semiconductor Manufacturing International Corporation (SMIC) (688981 CH) to cap the stock at 10% of the index weight.


CES China Semiconductor Chips Index Rebalance Preview: Three Changes in December

<ul>
<li>There could be one change for the CNI Semiconductor Chips Index with <a href="https://www.smartkarma.com/entities/hwatsing-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:36700:1" rel="noopener">Hwatsing Technology (688120 CH)</a> replacing <a href="https://www.smartkarma.com/entities/starpower-semiconductor-ltd" target="_blank" data-smartkarma-citation="entities:30089:1" rel="noopener">StarPower Semiconductor (603290 CH)</a> in December. The change is right at the cusp.</li>
<li>Passive trackers are estimated to buy 0.8x ADV in <a href="https://www.smartkarma.com/entities/hwatsing-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:36700:1" rel="noopener">Hwatsing Technology</a> and sell 0.4x ADV in <a href="https://www.smartkarma.com/entities/starpower-semiconductor-ltd" target="_blank" data-smartkarma-citation="entities:30089:1" rel="noopener">StarPower Semiconductor</a>. There will be selling in <a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-in" target="_blank" data-smartkarma-citation="entities:31062:1" rel="noopener">Semiconductor Manufacturing International Corporation (SMIC)</a> due to capping.</li>
<li>Both stocks have been moving higher over the last few weeks, but the potential inclusion has been outperforming the potential deletion pretty handily.</li>
</ul>


There could be one change for the CNI Semiconductor Chips Index with Hwatsing Technology (688120 CH) replacing StarPower Semiconductor (603290 CH) in December. The change is right at the cusp.
Passive trackers are estimated to buy 0.8x ADV in Hwatsing Technology and sell 0.4x ADV in StarPower Semiconductor. There will be selling in Semiconductor Manufacturing International Corporation (SMIC) due to capping.
Both stocks have been moving higher over the last few weeks, but the potential inclusion has been outperforming the potential deletion pretty handily.


CNI Semiconductor Chips Index Rebalance Preview: Potential Inclusion Outperforming

China

Will Semiconductor Co.,Ltd. Shanghai manufactures image sensor products and semiconductor products. The Company produces and sells complementary metal oxide semiconductors, protecting devices, power devices, power management integrated circuits, radio frequency devices, microphone sensors, and more. Will Semiconductor Shanghai markets its products worldwide.

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Will Semiconductor Shan (603501 CH)

Mainland Connect NORTHBOUND Flows (To 28 June 2024): BIG Consumer Name Selling Again

NORTHBOUND net selling continues. It is dominant in the consumer names. Appliances continue to see weakness. Tech is mixed. Renewables are mixed....

Travis Lundy

Taiwan Tech Weekly: Apple Hikes TSMC Orders on Strong IPhone 16 Hopes; Google Shifts AI Chip to TSMC

Apple and Google are increasing chip orders with TSMC for AI capabilities. Micron's shares inititially fell after reporting results previously,...

Vincent Fernando, CFA

KYEC (2449.TT): AI Highly Growth Potential may exceed Expectation.

KYEC outlook for 3Q24 shows potential 5-10% growth, with NVDA Corp as second-largest client and expanding business. STMicroelectronics and Will...

Patrick Liao

CES China Semiconductor Chips Index Rebalance Preview: Three Changes in December

There could be 3 changes in Dec with passives needing to trade 0.-0.3x ADV in the stocks. SMIC will be capped at 10% of the index weight. Some...

Brian Freitas

CNI Semiconductor Chips Index Rebalance Preview: Potential Inclusion Outperforming

Hwatsing Tech could replace StarPower Semiconductor in the index. Passive trackers will need to buy 0.8x ADV in Hwatsing and sell 0.4x ADV in...

Brian Freitas

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Mainland Connect NORTHBOUND Flows (To 28 June 2024): BIG Consumer Name Selling Again

NORTHBOUND net selling continues. It is dominant in the consumer names. Appliances continue to see weakness. Tech is mixed. Renewables are mixed....

Travis Lundy

Taiwan Tech Weekly: Apple Hikes TSMC Orders on Strong IPhone 16 Hopes; Google Shifts AI Chip to TSMC

​Apple and Google are increasing chip orders with TSMC for AI capabilities. Micron's shares inititially fell after reporting results previously,...

Vincent Fernando, CFA

KYEC (2449.TT): AI Highly Growth Potential may exceed Expectation.

KYEC outlook for 3Q24 shows potential 5-10% growth, with NVDA Corp as second-largest client and expanding business. STMicroelectronics and Will...

Patrick Liao

CES China Semiconductor Chips Index Rebalance Preview: Three Changes in December

There could be 3 changes in Dec with passives needing to trade 0.-0.3x ADV in the stocks. SMIC will be capped at 10% of the index weight. Some...

Brian Freitas

CNI Semiconductor Chips Index Rebalance Preview: Potential Inclusion Outperforming

Hwatsing Tech could replace StarPower Semiconductor in the index. Passive trackers will need to buy 0.8x ADV in Hwatsing and sell 0.4x ADV in...

Brian Freitas

Apple and Google are increasing chip orders with TSMC for AI capabilities. Micron's shares inititially fell after reporting results previously,...