Daily Brief TMT/Internet: KT Corp, CELSYS, PC Partner, Nextdc Ltd, Taiwan Semiconductor (TSMC) – ADR, Palantir Technologies , NORBIT ASA, Kyndryl Holdings , CYND and more

• KT’s foreign room is likely staying below 3.75% for November, setting up an ETF recall play. We’ve seen short-term buying pressure in similar past index reshuffles.
• The ETF recall impact peaks right after the announcement. KT’s May downweight saw a 5% spike in two trading days post-announcement.
• KT’s price moves more with downweights than SK Telecom’s because of higher overseas borrowing demand. This trend should hold, so setting up a position before the November announcement makes sense.

• Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
• SUNWELS Co (9229 JP) and Macbee Planet (7095 JP) moved to the Prime market in July 2024 and their TOPIX Inclusion events took place at the end of August 2024.
• We currently have CELSYS (3663 JP), Japan Eyewear Holdings (5889 JP), and Core Concept Technologies Inc (4371 JP) in our TOPIX Inclusions pre-event watchlist.

• On the 18th June, personal computer parts and accessories play PC Partner (1263 HK) (PCP) announced a SGX listing was under consideration; and a possible withdrawal of the HKEx listing.
• PCP’s 30th August announcement provided clarity on a step-by-step approach for the HKEx withdrawal. I recently held zooms with the SFC and SGX for added clarification.
• PCP’s exchange relocation is predicated on PCP’s operational expansion into new markets, in particular, Southeast Asia. How and when the SGX becomes the preferred trading exchange  remains an unanswered question. 

• Nextdc Ltd (NXT AU) aims to raise around US$366m via a fully underwritten institutional placement, along with another US$133m via a non-underwritten SPP.
• The company has undertaken a number of deals in the past, most of which have done ok. Although this one appears to be a bit opportunistic.
• In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

• TSMC: +15.9% Premium; Sales Rose 33% YoY in August & Headroom Increased
• UMC: +1.8% Premium; Largest Monthly Decrease in ADR Headroom, Has Consistently Been Decreasing Since May
• ASE: +2.0% Premium; At Current Level Can Consider Going Long the Premium

• Last Friday, the S&P Index Committee announced the changes to the S&P500, S&P400, S&P600, and other indices, along with the result of a recent consultation on capping methodology.
• The result is about US$23bn a side of flows for the major indices
• In the S&P500, DELL, PLTR, and ERIE are ADDs. AAL, ETSY, and BIO are DELETEs. But as always, just knowing the names is deceptive. The history matters more.

• Welcome back to the portfolio updates series! This month, I enjoyed a long vacation with my family, spending three weeks traveling through Italy by car.
• We began our journey from our home near Munich, which allowed us to traverse the entire country from north to south and back again.
• We entered Italy through South Tyrol and drove down to Tuscany, where we spent a week. Afterward, we continued our journey all the way down to Puglia, where we stayed for ten days before making the return trip.

• Global smartphone sales are anticipated to rise in Q2 2024, presenting an opportunity for Taiwanese firms to act quickly.
• IBM’s Kyndryl spinoff is focusing on addressing India’s cybersecurity talent shortage, signaling the need for immediate action.
• Apple is prioritizing user privacy in its slow launch strategy, while Huawei revolutionizes mobile innovation with a triple-fold smartphone.

• TSMC Extends Global Foundry Dominance Amid 33% Sales Surge – A Buy on Weakness Despite Market Concerns
• Apple ‘Glowtime’ AI Announcements: Mixed Analyst and Media Reactions May Overlook Key Advantage — Apple Is Best Positioned to Seamlessly Integrate AI Into Your Smartphone Experience
• Taiwan Market Gainers & Losers: Consumer Electronics & Memory Names Some of the Hardest Hit

• CYND Co., Ltd. is a dominant player in the reservation management software for beauty salons in Japan, with 90% of its revenue coming from recurring contracts
• The company has high barriers to scale and has acquired its second largest competitor, effectively eliminating competition
• CYND has the potential to significantly increase its revenue over the next decade, led by its co-founders with strong insider ownership, and is currently valued at JPY 4.1bn with a projected net 10-year IRR of 24.1% for Sun Mountain.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.