In today’s briefing:
- Ohayo Japan | Nvidia Falls 1% Post-Earnings
- SEBI Proposes Sweeping Changes to SME IPO Framework
- Japan Morning Connection: Will SPE Sentiment Begin to Rise?
- China & HK Strategy: Names to Watch for Market Value Management
- For Its WFE Q324 Season Finale, AMAT Returns ASML’s Favour & Sinks Semis Yet Again
- SEBI Study: Royalty Payments by Listed Companies to Related Parties
Ohayo Japan | Nvidia Falls 1% Post-Earnings
- The S&P 500 and Nasdaq 100 ended little changed, recovering from earlier losses following Ukraine’s missile strikes on Russia
- Nvidia delivered stronger-than-expected third-quarter results, with EPS of $0.81 on $35.1 billion in revenue
- Rapidus: The Japanese government plans to invest 200 billion yen in Rapidus to support cutting-edge chip production, with total funding needs of 5 trillion yen
SEBI Proposes Sweeping Changes to SME IPO Framework
- SEBI is proposing significant changes to the SME IPO framework, including increasing the minimum application size, restricting the OFS component, and introducing a monitoring agency.
- SEBI proposes changes in the allocation methodology for non-institutional investors, increasing the minimum number of allottees in an SME public issue, and introducing a mandatory profitability benchmark for companies
- The proposed changes aim to address concerns regarding investor protection and market integrity in the SME segment.
Japan Morning Connection: Will SPE Sentiment Begin to Rise?
- NVDA slight beat not enough to appease market, but strong AI outlook is positive.
- Timing may be right to look at names like TEL and Disco again now NVDA de-risked
- Qualcomm down after its IR day and concerns its future focus on Autos and IoT wont replace Apple.
China & HK Strategy: Names to Watch for Market Value Management
- CSRC’s Market Value Management Guidelines will indirectly benefit the H-share stocks with their A-share counterparts with a P/B of below 1x.
- Chinese banks dominated the list with below-book A-shares. China Everbright Bank (6818 HK), China Citic Bank H (998 HK), and ICBC (H) (1398 HK) are the prime beneficiaries.
- Infrastructure construction companies China Railway Cons Corp (1186 HK), China Railway Group H (390 HK), and China Comm Cons (1800 HK) are also well-positioned to gain.
For Its WFE Q324 Season Finale, AMAT Returns ASML’s Favour & Sinks Semis Yet Again
- Revenues of $7.05 billion were marginally higher than midpoint of $6.93 billion, up 4% QoQ and up 5% YoY. Guided current quarter at $7.15 billion +1.5% QoQ , +10.5% YoY
- Most WFE share prices have retreated to early 2022 levels, matching with when annual revenues first exceeded the $100 billion level
- After a 44% growth spurt in 2021, we have had three years with mostly no growth. We expect the same in 2025. Invest accordingly
SEBI Study: Royalty Payments by Listed Companies to Related Parties
- SEBI’s study reveals rising royalty payments by listed companies to related parties, highlighting doubling of payments to Rs. 10,779 crore in FY23 over a decade.
- 25% of firms pay royalties exceeding 20% of net profits, raising concerns about transparency, governance, and shareholder returns versus royalty prioritization.
- SEBI’s findings stress the urgency for enhanced royalty disclosures, policy revisions, and better scrutiny to protect minority shareholders and corporate governance standards.
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