In today’s briefing:
- Tata Technologies IPO: The Bear Case
- A Long Short Trading Event Likely to Have a High Hit Rate: HPSP & TCK
- EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Peak Rates?
- [ACM Research (ACMR US)]: Preferred Local Tool Supplier Beginning Global Ascent
- ChipMOS Industry View: Display Downturn Rebounding, Memory Delayed, Guidance Proving Prescient
- ECM Weekly (7th May 2023) – Mankind, Nexus REIT, Pertamina Hulu, Growatt, DXN, Giant Biogene, Ventia
- Acer Q1’23 Revenue NT$52.46 Billion, -12% QoQ, -33% YoY.
Tata Technologies IPO: The Bear Case
- Tata Technologies (TATATECH IN), the largest India-based ER&D (engineering research and development) service provider, is seeking to raise up to US$600 million, according to press reports.
- In Tata Technologies IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The key elements of the bear case rest on below-peer revenue growth, high contract assets, growth reliant on VinFast, mid-tier profitability, and high attrition rates.
A Long Short Trading Event Likely to Have a High Hit Rate: HPSP & TCK
- The Korean local sector ETF with the fastest growing AUM is TIGER Fn Semiconductor Top 10 ETF, whose AUM has increased more than twice over the past two months.
- HPSP (403870 KS) will replace Tokai Carbon Korea (064760 KS) by a comfortable margin in the upcoming review in October.
- From a day trading perspective, this presents a significant Long-Short opportunity. Considering the relatively sizeable passive impact size, setting an entry point more aggressively may not be a bad idea.
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades- Peak Rates?
- Weekly summary of vol changes and moves across Global Markets
- Analysing ATM volatility and skew changes over the last 5 days
- We suggest a few trades to take advantage of the implied vol surfaces
[ACM Research (ACMR US)]: Preferred Local Tool Supplier Beginning Global Ascent
- ACMR reported C1Q23 top-line, GAAP EBIT and non-IFRS net profit (2.8%), 42% and 35% vs. our est., and in-line, and positive vs. negative, respectively.
- We estimate ACMR’s China wafer clean/ECD share was 11%/45%~ in 1Q23, +4/28ppts YoY, while guidance implies 45%/50%~ in 4Q23, respectively;
- We maintain BUY and US$ 30 TP, implying 2.0x FY24 EV/Sales
ChipMOS Industry View: Display Downturn Rebounding, Memory Delayed, Guidance Proving Prescient
- Chipmos Technologies (8150 TT) reported results last week, beating expectations and showing an increase in capacity utilization QoQ.
- The company reported notable strength in Display Driver related demand, and capacity utilization for the segment may have bottomed back in 3Q22.
- Memory is expected to have a delayed recovery according to ChipMOS, potentially coming in 3Q23. Adjusted our model — We continue to believe ChipMOS is cheap through the cycle.
ECM Weekly (7th May 2023) – Mankind, Nexus REIT, Pertamina Hulu, Growatt, DXN, Giant Biogene, Ventia
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- Nexus Select Trust will open books for India’s first Retail REIT, just as the first major India IPO for the year, Mankind Pharma seeks to list.
- There was only Ventia (VNT AU) placement during the week, along with Giant Biogene Holding (2367 HK) lockup expiry.
Acer Q1’23 Revenue NT$52.46 Billion, -12% QoQ, -33% YoY.
- Q1’23 was Acer’s fifth consecutive quarter of sequentially declining revenues
- Called Q1’23 the trough but no specific guidance on the current quarter
- Chromebook sales surged 44.4% QoQ. What was the reason for this?
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