In today’s briefing:
- Payroll (4489 JP) MBO (¥1,380/Share) By New Japan PE Deal Entrant TA Associates
- Payroll (4489 JP): TA Associates’ Tender Offer at the IPO Price (JPY1,380)
- ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow
- Posco DX Included in KOSPI 200 IT Sector Index: Exploring Flow Trading Implications
- ASEH (3711.TT; ASX.US): 1Q24F Revenue Outlook Could Be Down Slightly QoQ; 2024F Should Grow ~10% YoY
- [Blue Lotus Hardware Sector Update]: What Does AI Phone Bring to the Tech Competition?
- Taiwan Tech Weekly: SK Hynix Boosts Optimism for Memory; Intel, Mediatek, Microsoft, UMC Key Events
- SurgePays, Inc. – Wireless Provider Turns Emerging Fintech Platform
Payroll (4489 JP) MBO (¥1,380/Share) By New Japan PE Deal Entrant TA Associates
- Payroll (4489 JP) today announced that it would go private in a deal led by US PE Firm TA Associates (Japan office led by a former Carlyle person it appears).
- Payroll IPOed in June 2021 at ¥1,380. Then it fell. Now this takeout is at ¥1,380/share. Not a great look but not egregiously unfair by the looks of it.
- This deal is going to get done easily as agreed participants and probable-friendlies get them past the minimum without retail or foreign holders participating.
Payroll (4489 JP): TA Associates’ Tender Offer at the IPO Price (JPY1,380)
- Payroll (4489 JP) has recommended TA Associates’ sponsored MBO tender offer of JPY1,380 per share, a 42.4% premium to the undisturbed (23 January).
- The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 61.28% ownership ratio.
- Based on the irrevocables, the minimum acceptance condition requires a 30.5% minority acceptance rate, which is achievable as the offer is marginally short of the all-time high.
ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Names Increases Flow
- Nearly halfway through the review period, we forecast 7 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index in June.
- Some of the potential changes will also have passive flows from the CSI 500 Index trackers at the same time as the ChiNext Index rebalance.
- The potential inclusions and deletions have slipped over the last couple of months along with the ChiNext Index, but the potential inclusions have outperformed as the deletions have dropped more.
Posco DX Included in KOSPI 200 IT Sector Index: Exploring Flow Trading Implications
- I confirmed that Posco DX will be incorporated into the KOSPI 200 IT Sector Index. The implementation date for this is also scheduled for March 15th.
- The direct flow size from the KOSPI 200 IT into Posco DX is approximately 0.3x ADTV, implying a noteworthy price impact on March 14th, concentrated from 2:00 PM to close.
- When designing Posco DX’s March 14 KOSPI 200 inclusion flow setup, we must also proactively design strategies to capture flows from the KOSPI 200 IT within a narrow time window.
ASEH (3711.TT; ASX.US): 1Q24F Revenue Outlook Could Be Down Slightly QoQ; 2024F Should Grow ~10% YoY
- The ASE Technology Holding (3711 TT) 1Q24F outlook may be dim due to normal seasonality, resulting in a decline of mid-to-high single digits in revenue.
- Mediatek Inc (2454 TT) and NVIDIA Corp (NVDA US) are expected to experience a strong rebound.
- The 2024F outlook for ASEH indicates a low double-digit YoY growth.
[Blue Lotus Hardware Sector Update]: What Does AI Phone Bring to the Tech Competition?
- US-Led tech chain may push for AI phone features, which itself is a great strategy to pull the tech industry out of doldrums. It will pressure Huawei, in our opinion;
- We believe there are other stories unfolding in the AI era, including availability of AI killer apps, the rivalry between super apps and OS vendors, and the growing China/Ex-China chasm.
- Our Top Pick is Tencent and Kuaishou. We maintain Xiaomi at SELL.
Taiwan Tech Weekly: SK Hynix Boosts Optimism for Memory; Intel, Mediatek, Microsoft, UMC Key Events
- Taiwan Tech Plays Have Soared Since TSMC’s Strong Outlook, and SK Hynix Reported a Return to Op Profit
- Memory Monitor: Microsoft Copilot Will Supercharge Demand for DRAM; SK Hynix, Nanya Tech, Micron
- Key Upcoming Events — Intel, Microsoft, Mediatek, UMC Results Ahead
SurgePays, Inc. – Wireless Provider Turns Emerging Fintech Platform
- We are initiating coverage of SurgePays (SURG), a forward- looking financial technology and telecommunications firm dedicated to serving the underbanked.
- Its wireless subsidiaries provide mobile broadband, voice, and SMS services to subsidized and direct retail prepaid customers primarily through the US Federal Affordable Connectivity Program (ACP).
- SURG has built a profitable business in the ACP segment of the wireless market.
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