In today’s briefing:
- New Phase in Korean Short Selling: Immediate Impact of MM and LP Short Selling Ban
- Sea Ltd (SE US) – Paying the Price for Market Leadership
- Tata Technologies Pre-IPO – RHP Updates – Headline Growth Picking Up
- Geniee (6562 JP) – Resilient Ad Growth and Marketing SaaS Driving Momentum
New Phase in Korean Short Selling: Immediate Impact of MM and LP Short Selling Ban
- There is a prevailing sentiment in the local market that short selling by market makers (MM) and liquidity providers (LP) will effectively be prohibited very shortly.
- The widening of the futures basis extends the influence of futures on the spot market prices. This is precisely where trading opportunities that we should be keenly observing may arise.
- It also leads to a significant widening of ETF tracking errors due to the direct sell-off of underlying shares. We must capitalize on extreme spreads in ETFs.
Sea Ltd (SE US) – Paying the Price for Market Leadership
- Sea Ltd (SE US) saw its 3Q2023 result swing back to a loss after turning on investment at Shopee during 3Q2023 in the face of competition.
- The company was open about its renewed investment in growth during the previous quarter in the face of threats from TikTok Shop, which may have lessened post its Indonesia expulsion.
- Sea Ltd may not have engendered itself with investors impressed with its ability to pivot like no other to actual profitability, now introducing an element of uncertainty. Valuations reflect this.
Tata Technologies Pre-IPO – RHP Updates – Headline Growth Picking Up
- Tata Technologies (TATATECH IN) (TT) is looking to raise around US$370m in its upcoming India IPO.
- Tata Technologies is a global engineering services company offering product development and digital solutions, including turnkey solutions, to global original equipment manufacturers (OEMs) and their tier 1 suppliers.
- We have looked at the company’s past performance and undertaken a peer comparison and provided our initial thoughts on valutions. In this note we talk about the RHP updates.
Geniee (6562 JP) – Resilient Ad Growth and Marketing SaaS Driving Momentum
- Q1-2 FY3/2024 results demonstrated robust growth by Geniee with sales growth of 23.7% YoY and operating profit growth of 99.9% YoY.
- The Marketing SaaS segment has seen robust sales growth and margin improvement YoY, paving the way for a resilient earnings stream going forward.
- However, given a weaker-than-expected outlook for the advertising market both domestically and overseas, the company has lowered FY3/2024 guidance whilst maintaining its medium-term guidance range for FY3/2026.
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