In today’s briefing:
- EQD | Hong Kong Index Options Weekly – HSI and HSCEI
- 2025 High Conviction Short: Microchip Technology Inc. (MCHP)
- Kioxoa Pre-IPO – The Positives – Among the Leaders in Its Space
- Tech Supply Chain Tracker (26-Nov-2024): HP prepares for Trump 2.0 with changes in leadership and supply chain in NA.
- JST Group Pre-IPO: Growing Rapidly but with Some Accounting Red Flags
- SVRE: Updating our estimates and model to reflect the new ADS ratio.
- Secai Marche adds US$1.6M to Series A round to double down on Southeast Asia | e27
EQD | Hong Kong Index Options Weekly – HSI and HSCEI
- Move away from short gamma levels and position covering help push HSI implied vols lower on the week.
- Short dated Puts are still very active in HSCEI at the 6300 and 6800 strikes.
- Both HSI and HSCEI implied vols are trading about 2 points above their pre-stimulus levels.
2025 High Conviction Short: Microchip Technology Inc. (MCHP)
- Initiate a short position in MCHP Target Price Range: $45-50 Time Horizon: 6-12 months
- Declining fundamentals: Q2 FY2025 revenue declined 48% YoY, with adjusted EPS falling 72% YoY. Valuation concerns: P/E of 36.8x vs. sector median of 22x, unsupported by current performance.
- Geo-Political risk: 50% of sales from Asia, exposed to potential trade tensions. Operational challenges: Customer destocking and sluggish demand. ETF-Driven price support: Potential for sharp correction if sector rotation occurs.
Kioxoa Pre-IPO – The Positives – Among the Leaders in Its Space
- Kioxia Holdings (6600 JP) is aiming to raise around US$700m (including over-allocation) from its Japan IPO
- It was the world’s largest pure-play NAND flash memory supplier, in terms of both revenue and unit shipments in 2023, according to TechInsights.
- In this note, we talk about the positive aspects of the deal.
Tech Supply Chain Tracker (26-Nov-2024): HP prepares for Trump 2.0 with changes in leadership and supply chain in NA.
- HP undergoes leadership overhaul and revamps supply chain in preparation for Trump 2.0, while strict qualification measures impact 7nm technology development.
- TSMC’s AI chip expansion is overshadowed by the potential return of Trump, with global notebook shipments fluctuating in Q3/Q4 2024.
- DIGITIMES Research forecasts a steady revenue growth of over 10% CAGR for the global wafer foundry industry during the 2024-2029 period, while Apple India’s sales soar to US$8B driven by strong iPhone sales. Availability of Samsung’s HBM3E for Nvidia’s Blackwell remains uncertain.
JST Group Pre-IPO: Growing Rapidly but with Some Accounting Red Flags
- JST Group (1703609D CH) is looking to raise up to US$100m in its upcoming Hong Kong IPO.
- It is China’s largest and most popular e-commerce SaaS ERP provider to facilitate the connection of merchants with over 400 e-commerce platforms in China and across the world.
- In this note, we look at the firm’s past performance.
SVRE: Updating our estimates and model to reflect the new ADS ratio.
- The company continues to make progress with its international expansion which partially offsets concerns over the challenges in the company’s domestic market.
- Estimating the total number of shares (and by default ADSs) outstanding has been incredibly challenging as the company has financed operations by issuing stock as the market price of the ADSs has fallen.
- We now estimate that the company has 164 million common shares outstanding which equates to 1.8 million ADSs given the new ADS to common ratio of 1 to 90.
Secai Marche adds US$1.6M to Series A round to double down on Southeast Asia | e27
- Secai Marche, a farm-to-table startup connecting farmers with restaurants and retailers in Southeast Asia, has secured an additional JPY 250 million (US$1.6 million) in its Series A funding round.
- The round includes equity financing from Mitsui Sumitomo Insurance Venture Capital (MSIVC) and debt financing from The Shizuoka Bank and The Hokkoku Bank.
- This follows a US$3.5 million Series A round of investment from investors, including Beyond Next Ventures, Spiral Ventures Asia, Mitsubishi UFJ Capital, Future Food Fund, Tsuneishi Shoji, Fukuoka Sonoriku, and Foodison co-CEO Toru Yamamoto, in August this year.
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