In today’s briefing:
- StubWorld: Japex/Inpex, Amorepacific, Wynn, Shimao, Takara, Silicon Integrated/United Micro
- Two Noteworthy Issues in Korea’s SSF/SSO Selection in September Round
- ECVT: The Earnings Normalcy
- HWKN: Returning to Buy Rating
StubWorld: Japex/Inpex, Amorepacific, Wynn, Shimao, Takara, Silicon Integrated/United Micro
- For a change of pace, this insight briefly canvasses a clutch of Holdco’s trading at extreme levels.
- Preceding the chart-heavy insight are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Two Noteworthy Issues in Korea’s SSF/SSO Selection in September Round
- Recent information leaked through local media reveals that KRX has ultimately opted not to list Ecopro Co’s SSF in the upcoming September round.
- Given the unusually high trading volume of at-the-money (ATM) options in the local SSO market, the market’s interest in covered calls for dividend-yielding stocks can be substantial.
- So, we should pay attention to stocks whose SSO is already listed or will be newly listed in September among those that have shifted their ex-dividend dates to post-dividend confirmation.
ECVT: The Earnings Normalcy
- ECVT has gone from one maintenance issue at the beginning of the year to another that is expected to impact second half results and creates near-term headwind for investor sentiment.
- Maintenance and CapEx spending is likely to receive much of the scrutiny from investors after ECVT had two issues this year. However, they are unrelated, and one was from weather
- The sell-off in ECVT’s stock price after the quarterly results reflects investor anxiety over the business being able to generate free cash flow on a consistent basis
HWKN: Returning to Buy Rating
- HWKN reported fiscal first quarter (June) results where higher prices had offset the decline in unit volume.
- Without having to take LIFO reserves, HWKN was able to materially beat our expectations. We do not believe this is likely to occur again in the September quarter
- There is no evidence of unit volumes rising in the short-term. However, input costs might have stabilized in the June quarter
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