In today’s briefing:
- Softbank Group – Vision Fund Losses Accelerate into Quarter End
- Redington (India) Ltd: Forensic Analysis
- Lionheart Studio IPO Preview
- Nanya Tech: Micron Results, Light at the End of the Tunnel? Shares Rise
- MSCI ACWI Ex-US, EAFE Testing Downtrend Channel Supports — Bounce Potential
Softbank Group – Vision Fund Losses Accelerate into Quarter End
- Valuation losses in the Vision Fund public portfolio are now approaching $5bn as the end of the quarter looms versus break-even as recently as 13 September
- That may have influenced the level of VF staff reductions which press reports ut at 30% versus expectations of 20% last month
- The discount remains elevated on tech weakness and that is unlikely to change
Redington (India) Ltd: Forensic Analysis
- Redington India (REDI IN)‘s primary business pertains to distribution of Information Technology,mobility and other technology products. The company also is engaged in supply chain solutions and after sales services.
- Although company has a strong business, a glance at the balance sheet and financials reveals some concerns particularly at the subsidiary level which should not be ignored.
- Forensic discomforts revolve around goodwill, poor earnings quality, instances of margin flirting, branch audit not being carried out by statutory auditors, etc.
Lionheart Studio IPO Preview
- Lionheart Studio is getting ready to complete its IPO in November 2022. Lionheart Studios is the second largest IPO in Korea after LG Energy Solution (373220 KS) in 2022.
- The IPO offering amount is 410 billion won to 604 billion won. This would also suggest implied market cap of 3.1 trillion won and 4.5 trillion won.
- A key investment risk for the company is its excessive reliance on one game (Odin: Valhalla Rising) for its revenue and profits.
Nanya Tech: Micron Results, Light at the End of the Tunnel? Shares Rise
- Micron’s near-term guidance implies that consensus estimates likely need to come down for both Micron and Nanya Tech.
- However, Micron indicated that they expect supply/demand balance to improve in 2023E.
- There could be more negative industry news to come, however Nanya Tech has a very strong balance sheet to weather some weak quarters and is trading at trough-type valuations.
MSCI ACWI Ex-US, EAFE Testing Downtrend Channel Supports — Bounce Potential
- Many major indexes have broken below critical supports, including MSCI ACWI (ACWI-US), EURO STOXX 50, STOXX Europe 600, and the DAX.
- Odds suggest a bearish downside continuation, and a bearish outlook is appropriate as long as the YTD downtrend remains intact on the ACWI-US, MSCI ACWI ex-US (ACWX-US), and EAFE (EFA-US).
- There is bounce potential given these broad global indexes are testing their respective downtrend channel supports, but the fact remains that they are in downtrends, a major problem longer-term.
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