In today’s briefing:
- CNOOC (883 HK) Surprises with Special Div
- JAPAN ACTIVISM: Silchester Goes After Bank of Kyoto
- Advantest (6857 JP): Orders Unsustainable, Cyclical Risk High
- Crypto Mining Industry Series: Let The Crypto Miners Rush Begin
- KOSPI/KOSDAQ Lockup Releases: Kakao Pay, SKIET, Enchem, Dear U, 4by4, & Poongwon Precision
CNOOC (883 HK) Surprises with Special Div
- CNOOC Ltd (883 HK) released fantastic, above-consensus earnings for Q1, which were minimally impacted (positively) by non-recurring profits.
- The driver was higher gas production on much higher prices. At current price, the implied PER is 3.0x for 2022.
- And the company also announced a Special Dividend of HK$1.18/share or 10.9% of yesterday’s share price.
JAPAN ACTIVISM: Silchester Goes After Bank of Kyoto
- Silchester International Investors has owned Bank of Kyoto (8369 JP) for 16 years and is now the largest shareholder in the bank.
- They have been dissatisfied, become vocal behind the scenes with their dissatisfaction, and BoK management disagrees so they will go to the mattresses. Gently.
- This could get some investors excited, but it is unlikely to be a successful activist effort.
Advantest (6857 JP): Orders Unsustainable, Cyclical Risk High
- The recent surge in IC test equipment orders is unsustainable. Only service orders maintain a positive trend.
- After peaking this fiscal year, sales and profits are likely to show double-digit declines. When earnings might hit bottom is not clear, but cyclical gearing is high.
- Earnings could rebound in 2 or 3 years, but visibility is poor. Don’t forget that Advantest has dropped into the red three times in the past 20 years.
Crypto Mining Industry Series: Let The Crypto Miners Rush Begin
- Bitcoin mining is booming in the United States and we expect ~2.5 GW of new cumulative mining capacity will be added by crypto mining companies in the U.S. this year.
- Today, Foundry USA is the biggest mining pool globally, and North America has been the clear beneficiary of China’s cryptocurrency ban in 2021.
- We see a huge untapped opportunity for Bitcoin mining companies. We initiate Marathon Digital Holdings with Overweight and Cipher Mining and Riot Blockchain with Neutral.
KOSPI/KOSDAQ Lockup Releases: Kakao Pay, SKIET, Enchem, Dear U, 4by4, & Poongwon Precision
- In the KOSPI, Kakao Pay and SK IET deserve our attention. Their prices are 20-25% above the offering prices, and the release size is 10x ADTV. Both are short-selling available.
- On the KOSDAQ, Enchem, Dear U, 4by4, and Poongwon Precision are worth paying attention to. They will face a sizable release with the share prices sitting above their offering prices.
- However, none of these KOSDAQ names are available for short-selling. So, we should consider underweighting existing positions rather than building up new positions.
Before it’s here, it’s on Smartkarma
