In today’s briefing:
- Taiwan Dual-Listings: TSMC Premium Hitting High Territory, ASE Shoots to 6.1%
- Sun* (Sun Asterisk – 4053 JP) TOPIX Inclusion Event
- Keyence (6861) | Better Risk/Reward at Peers
- Ant Group: Shareholder Restructuring Announced and the Lack of IPO Plan Are Negatives Surprise
- Meta Platforms: A Value Opportunity In The Tech Environment
- Youlife International Pre-IPO Tearsheet
Taiwan Dual-Listings: TSMC Premium Hitting High Territory, ASE Shoots to 6.1%
- TSMC’s ADR premium is entering the higher end of its range since early 2022. Earnings coming this week.
- UMC’s ADR has flipped from a discount to a moderate premium. Earnings are ahead as well.
- ASE Technology’s ADR premium has reached 6.1%, high even for this usually higher-premium trading pair.
Sun* (Sun Asterisk – 4053 JP) TOPIX Inclusion Event
- In mid-December, digital UX creation agency (90% of revenues) and “talent agency” (10%) announced it would move from TSE Growth to TSE Prime mid-December 2022.
- This was in Janaghan’s “Not Ready” list in TOPIX Inclusions: Who Is Ready (Dec 2022) because it did not meet two of the requirements. But it turns out it did.
- This is therefore a TOPIX inclusion event at end-January 2023.
Keyence (6861) | Better Risk/Reward at Peers
- Keyence is a structural growth stock that has fallen by 31% over the past year reflecting near term risks to growth
- Although Keyence is a major beneficiary of continued investment in industrial automation, the company would need to grow significantly quicker than the industry to justify the current valuation
- We analyse Keyence’s core value drivers – revenue, margins, risk and reinvestment – but see better risk/reward in other growth stocks
Ant Group: Shareholder Restructuring Announced and the Lack of IPO Plan Are Negatives Surprise
- The announced restructuring of Ant Group holding companies will block founder Jack Ma from achieving majority voting on the board following the implementation of the holdcos adjustment
- The majority of board directors will be “independent” post the holdco restructuring and they are likely to drive a more social policy focused agenda, as the 2021 sustainability report suggests
- We see these developments, and especially the lack of IPO plan, to be negative for non-government aligned Ant Group shareholders, such as the international private equity groups and especially Alibaba
Meta Platforms: A Value Opportunity In The Tech Environment
- META’s sustainable earnings come up with at least 30% to 35% upside potential.
- There is a huge margin of safety at the current price, and multiple should expand from now forward.
- Meta Platforms, Inc. (NASDAQ:META) is one of the most beaten-up stories among the FAANG, the storytelling around the Metaverse has failed to be understood by the market, and a great deal of pessimism and future catastrophic scenarios have been priced into the stock.
Youlife International Pre-IPO Tearsheet
- Youlife International Holdings (1759732D CH) is looking to raise at least US$100m in its upcoming HK IPO. The deal will be run by Macquarie and CCB International.
- Youlife International is a blue-collar lifetime service platform in China. It assists blue-collar talent with upskilling and lifetime career development.
- According to CIC, Youlife ranked first among all blue-collar lifetime service platforms in China in terms of revenue generated from blue-collar lifetime services in 2021.
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