In today’s briefing:
- Kokusai Electric IPO: The Bear Case
- Delta Electronics (DELTA TB / 2308 TT): Placement Increases Float; Ends Tender Offer Hope?
- Weekly Deals Digest (01 Oct) – Cainiao, Kokusai, Doosan, IMAX China, Keiyo, Toyo, Liontown
- Taiwan Tech Weekly: Taiwan AI Names Rebound; Memory Crashes; Look for Nvidia Hedges
- Lalatech IPO: New Filing’s H123 P&L Shows Impressive Growth, Unanswered Questions
Kokusai Electric IPO: The Bear Case
- Kokusai Electric (6525 JP) is a speciality manufacturer of semiconductor production equipment. KKR & (KKR US) seeks to raise about US$750 million through listing Kokusai.
- In Kokusai Electric IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The bear case rests on a declining revenue trend, a challenging near-term growth target, high China revenue risk, margins on a downward trend, increasing inventory days and deteriorating FCF.
Delta Electronics (DELTA TB / 2308 TT): Placement Increases Float; Ends Tender Offer Hope?
- The Delta Electronics Thai (DELTA TB) / Delta Electronics (2308 TT) spread peaked earlier this year and has been trending lower for the last few months (but it is volatile!).
- Delta Electronics Thai (DELTA TB) dropped 20% on Friday following Delta Electronics (2308 TT)‘s placement of 0.72% of shares outstanding. The stock last closed 12.7% below the placement price.
- Delta Electronics (2308 TT) still owns over 63% of Delta Electronics Thai (DELTA TB) and there could be more downside for the Thailand line over the near term.
Weekly Deals Digest (01 Oct) – Cainiao, Kokusai, Doosan, IMAX China, Keiyo, Toyo, Liontown
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments Kokusai Electric (6525 JP), Doosan Robotics (454910 KS), Seoul Guarantee Insurance (031210 KS), Cainiao Smart Logistics (1437124D HK), J&T Global Express (1936374D CH),VNG (VinaGame) (VNG US) IPOs.
- Event-Driven developments – Keiyo Co Ltd (8168 JP), System Information (3677 JP), Toyo Construction (1890 JP), IMAX China Holding (1970 HK), Nws Holdings (659 HK), Symbio Holdings (SYM AU).
Taiwan Tech Weekly: Taiwan AI Names Rebound; Memory Crashes; Look for Nvidia Hedges
- Taiwan AI names rebounded strongly after having previously suffered declines. Nevertheless, many names have outperformed Nvidia and could be good hedges vs. a Long Nvidia position.
- Nanya Tech crashed after the market reacted to Micron’s weaker than expected near-term guidance. We believe the negative reaction to Micron is short-sighted. Please see our piece.
- Delta Thailand crashed vs. Delta Taiwan after the parent sold a stake in the Thai subsidiary. We continue to believe Delta Taiwan offers substantially better value.
Lalatech IPO: New Filing’s H123 P&L Shows Impressive Growth, Unanswered Questions
- In an updated HKEX filing posted on September 28th, Lalatech disclosed H123 financial results
- Solid Revenue growth plus sharp expense reductions led to +28 ppt OP margin expansion
- Is this progress sustainable, defendable? Lalatech management needs to explain gains
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