In today’s briefing:
- Trading Opportunities from Korea’s Sudden Short Selling Ban & Resulting Futures Backwardation
- Samsung. Strategic Shift Reverses Memory ASP’s Downward Spiral
- KPIT: Raises Its Full-Year FY24 Guidance
Trading Opportunities from Korea’s Sudden Short Selling Ban & Resulting Futures Backwardation
- We should consider the complete prohibition of short selling for the next six months as practically finalized.
- Following the individual stock short selling ban, both position hedging and short demand will inevitably shift to the futures market, consequently inducing unavoidable immediate backwardation.
- We should design a setup that not only actively seizes sell arbitrage opportunities but also effectively capitalizes on the downward price pressure stemming from spot selling.
Samsung. Strategic Shift Reverses Memory ASP’s Downward Spiral
- Q323 revenues of KRW 67.4 trillion, up 12.3% QoQ but still down 7% YoY.
- Operating profit KRW 2.4 trillion, a big improvement on the KRW 0.67 trillion in the second quarter but a far cry from the KRW 10.85 trillion in the year-ago quarter
- While Memory has turned the corner, yet further productions cuts are still required
KPIT: Raises Its Full-Year FY24 Guidance
- KPIT raised its full-year FY24 revenue growth guidance to 37%+ from 27-30% earlier, led by a strong Q2FY24 performance. EBITDA margin guidance has been also raised to 20%+ from 19-20%.
- Despite wage hike impact of 250bp, EBITDA margin came in at 20%, at the upper end of the 19-20% FY24 guidance. Operating leverage and realization improvement helped offset the impact.
- With the strong Q2 performance, we are upgrading our FY24 PAT estimate to INR 580cr+ vs INR 550cr+ earlier and FY25 PAT of INR 730cr+ vs INR 700cr+ earlier.
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