In today’s briefing:
- NTT Buying NTT Data Shares – ¥40bn to Go
- DTAC/True Merger: The Court Dismisses the Consumer Council’s Petition
- Korean Pair Trades Review in 2022
- Omron (6645) | Key Beneficiary of Industry 4.0
- China ADRs Delisting – Friday Could Be Judgment Day for over US$800bn Mcap of Stocks
- EQD | Alibaba (BABA US): Revisiting the December Call Ratios
- TEMC IPO Preview
- Recent IPOs Carrying Putback Option in Korea: Market’s Attention Is on WCP
- Lumen Technologies Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report
- Oracle: Key Considerations For Long-Term Investors From Yet Another Strong Quarter
NTT Buying NTT Data Shares – ¥40bn to Go
- NTT (Nippon Telegraph & Telephone) (9432 JP) and NTT Data Corp (9613 JP) did a deal earlier this year to sell NTT’s global data business to NTT Data. Discussed here.
- NTT sold 55% of its current overseas business in NTT Communications, Dimension Data, and NTT Security Group, in return getting 45% of NTT Data’s current global business, plus ¥112bn.
- NTT would then spend ¥100bn of the ¥112bn increasing its stake. So far it has spent ¥58.39bn buying 18% of volume every day since Oct 1.
DTAC/True Merger: The Court Dismisses the Consumer Council’s Petition
- The Administrative Court has dismissed the Thai Consumers Council petition to impose an injunction on the Total Access Communication (DTAC TB)/True Corp Pcl (TRUE TB) merger.
- Telenor ASA (TEL NO) and CP Group are currently seeking clarification on certain NBTC conditions such as tariff adjustments and MVNOs network capacity.
- Completion is targeted for 1Q23. The current share price ratio of 9.072x vs exchange ratio of 10.221x is attractive. Timing and tweaks to the exchange ratio are risks.
Korean Pair Trades Review in 2022
- In this insight, we review all the 16 Korean pair trade ideas in 2022.
- A few of the best performing pair trade ideas this year included long LG Chem/short LGES, long Doosan Corp/short Doosan Enerbility, and long KIH/short MFG.
- Going forward in 2023, as the market continues to show higher volatility, there could be continued strong interest in pair trade ideas in Korea.
Omron (6645) | Key Beneficiary of Industry 4.0
- Omron is a structural growth stock that has fallen by 39% YTD reflecting near term risks to growth and margins
- We believe that Omron is a major beneficiary of continued investment in automation and the shift to Industry 4.0
- We analyse Omron’s core value drivers – revenue, margins, risk and reinvestment – and see 35% upside
China ADRs Delisting – Friday Could Be Judgment Day for over US$800bn Mcap of Stocks
- PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
- The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
- In this note, we’ll talk about the latest developments, possible outcomes and implications.
EQD | Alibaba (BABA US): Revisiting the December Call Ratios
- In November we published on the upside potential in Alibaba
- Stock has rallied and the call ratio we recommended has performed very well
- We evaluate the trade and look at potential trade options
TEMC IPO Preview
- TEMC is getting ready to complete its IPO in Korea in January 2023. TEMC is a materials company that produces specialty gases for the semiconductor and display production processes.
- The IPO price range is from 32,000 won to 38,000 won and the expected market cap is expected to be from 361 billion won to 429 billion won.
- The company’s sales increased at a 57.4% CAGR from 2019 to 2021. Its sales exploded higher by 254% YoY to reach 238 billion won in 1Q-3Q 2022.
Recent IPOs Carrying Putback Option in Korea: Market’s Attention Is on WCP
- WCP has the largest gap between the exercise and current prices (-16%). And its retail allocation is also the largest (5.44% of SO). In addition, it is subject to short-selling.
- The deadline is January 2nd. A large-scale option exercise will be unavoidable if the share price does not exceed ₩54,000 by that date.
- It is very likely that WCP’s share price will experience strong downward pressure for a week after January 2nd. We need to consider a position setup that actively utilizes this.
Lumen Technologies Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report
- Lumen Technologies is a big player in the facilities-based technology and communications domain.
- The customer experience offered by them continues to improve, driven by the company’s very high NPS as well as customer e-scores for both the upper end of the company’s customer base and Quantum Fiber.
- Apart from that, Lumen Technologies has been expanding its premier residential as well as Quantum Fiber aggressively in over 30 cities and metro areas.
Oracle: Key Considerations For Long-Term Investors From Yet Another Strong Quarter
- Oracle continues to outperform its peers and the broader equity market after reporting yet another strong quarter.
- The cloud application segment continues to deliver, the infrastructure side of the business deserves more attention, according to analysts and market commentators.
- The early signs were plain to see a couple of years back, says analyst.
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