In today’s briefing:
- Key Points to Consider at This Stage Regarding the Year-End Ex-Dividend Play
- What To Make Of Hollysys’ Latest Offer
- Carly Holdings Limited – Growth Plans Working, Now Accelerate
- ASE’s Results Shows Chip Packaging & Testing Utilization Is Still Low, However Improvement Expected
- SHEN: On the Horizon
- ASEH (3711.TT; ASE.US): Demand Remains Soft in 4Q23F, but ASEH Observes the Recovery Is Broad-Based.
- NTGR: Recovery with Cash Flow
Key Points to Consider at This Stage Regarding the Year-End Ex-Dividend Play
- The pivotal question now is the number of these companies that will effectively defer their year-end ex-dividend date to April next year.
- The most reliable way to accurately confirm this would be to check how many of them will publicly announce the dividend reference date two weeks before the December year-end deadline.
- This will serve as the most critical indicator in determining whether this year’s year-end flow trading event, the most significant in Korea, will recur.
What To Make Of Hollysys’ Latest Offer
- Hollysys (HOLI US), a leading automation control system solutions provider in China, has been subject to at least six indicative Offers since December 2020, ranging from US$15.47/share to $US$25/share.
- Yue Xu and Lei Fang, the co-chief operating officers of Hollysys, who previously tabled a NBIO of US$23.00/share in August 2021, have now pitched a US$25/share proposal.
- What is different this time? >32% of the share registry has banded together to demand changes. That’s dramatically different vs previous Offers.
Carly Holdings Limited – Growth Plans Working, Now Accelerate
- Carly Holdings Limited (ASX:CL8) operates a vehicle subscription business, which it launched in March 2019, leveraging existing operations, strategic relationships, and technology.
- Car subscription allows business and retail customers to pay a single monthly fee to access a car for 30 days or more and is an alternative to purchasing or financing a vehicle.
- Carly has attracted larger automotive industry businesses as shareholders, with a direct offering and services to support automotive manufacturers and dealers to generate revenue from car subscriptions.
ASE’s Results Shows Chip Packaging & Testing Utilization Is Still Low, However Improvement Expected
- ASE’s 3Q23 results came in in-line with analyst estimates, and showed gross margin ticking slightly higher QoQ.
- Semiconductor Assembly, Testing, and Manufacturing (ATM) capacity utilization remains low, in the mid-60’s percent.
- Management is cautiously optimistic about an improving industry environment into next year, however was more guarded than what we gauged from TSMC or UMC in their recent results.
SHEN: On the Horizon
- SHEN is expanding its network footprint with the acquisition of Horizon Telecom for $385 million in cash and stock.
- SHEN is purchasing Horizon for the network footprint and the sales ability to capture commercial customers compared to the majority of SHEN’s customers being residential
- The valuation becomes financially reasonable to understand when considering SHEN is paying approximately $51 thousand per fiber miles
ASEH (3711.TT; ASE.US): Demand Remains Soft in 4Q23F, but ASEH Observes the Recovery Is Broad-Based.
- 4Q23F demand recovery will be broad-based thanks to customers’ new product launch.
- ASEH has observed an increase in rush orders across the board as customers become more cautious about restocking.
- The DPS payout ratio for 2023F is projected to be 60-65%.
NTGR: Recovery with Cash Flow
- NTGR benefited from an increase in demand for premium wireless mesh systems and routers in the third quarter resulting in a non-GAAP profit
- The return of normalcy should allow NTGR to convert its on hand inventory to cash over the next two quarters. NTGR’s cash balance should continue to rise
- A softer environment for SMB products forces us to reassess our model with NTGR guiding gross margin down
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