In today’s briefing:
- Taiwan Tech Weekly: Key Supply Chain Names to Watch for Nvidia’s Earnings Today
- Alibaba: Navigating in Reverse
- Korea – Positioning in Ecopro, JYP Entertainment, Hanwha Ocean, Hanmi Semi, CJ Corp, E-Mart
- M&A Research Institute Holdings (9552) TOPIX Inclusion
- Shibaura Mechatronics (6590) Secondary Offering & Buyback
- Doosan Robotics IPO Preview
- EOFLOW/Medtronic Tender: Irrational Exuberance
- Hanwha Ocean: Big Shares Dilution from Rights Offering of 2 Trillion Won
- Is Samsung M&A About to Happen?
- StubWorld: Intouch “Cheap” As Thaksin Returns
Taiwan Tech Weekly: Key Supply Chain Names to Watch for Nvidia’s Earnings Today
- Nvidia will report its earnings today U.S.-time, we outline the key Taiwan AI supply chain names to watch around the earnings.
- TSMC has maintained its full-year revenue guidance despite media reports questioning whether a further downgrade was coming.
- Hon Hai produces over 50% of Nvidia’s AI hardware according to media reports.
Alibaba: Navigating in Reverse
- Alibaba (ADR) (BABA US)‘s New Retail strategy stumbled, prompting the company to revert to its e-commerce origins with a renewed emphasis on social commerce.
- Creating a social media platform could be relatively simple, yet turning it into a prosperous venture amid established social media giants could be challenging.
- Branching out from social media to e-commerce might be straightforward, but Alibaba Group Holding (9988 HK)‘s unprecedented reverse path could present unique challenges.
Korea – Positioning in Ecopro, JYP Entertainment, Hanwha Ocean, Hanmi Semi, CJ Corp, E-Mart
- Ecopro (086520 KS), Jyp Entertainment (035900 KS), Hanwha Ocean (042660 KS), Hanmi Semiconductor (042700 KS), CJ Corp (001040 KS) and E Mart (139480 KS) have been on investors/traders radars recently.
- There will be liquidity demand on the stocks in a week and there is pre-positioning on a lot of the stocks.
- Since 10 August, retail investors have net bought Jyp Entertainment and E Mart, foreigners have net bought Ecopro, Hanwha Ocean and Hanmi Semiconductor, while local institutions have net bought CJ Corp.
M&A Research Institute Holdings (9552) TOPIX Inclusion
- Yesterday, M&A Research Institute (9552 JP) announced it would list on the TSE Prime section on 29 August, which means it will join TOPIX at the close of 28-Sep-2023.
- This is NOT a surprise. On 27 June, the company announced a secondary offering of 1.631mm shares (by the founder/CEO), and said it had applied for TSE Prime transfer.
- I take a look at how this could play out.
Shibaura Mechatronics (6590) Secondary Offering & Buyback
- Five plus years ago, Toshiba Corp (6502 JP) sold down a 26% stake in small cap Shibaura Mechatronics (6590 JP) to get to a consolidated 13%-ish stake.
- This was discussed in Toshiba Selldown of Shibaura Mechatronics (6590) back then. Yesterday, we got news Toshiba would sell out its remaining stake. And there’s a buyback. Maybe.
- The stock has reacted badly on Day 1, despite a lack of dilution. Shareholder structure matters.
Doosan Robotics IPO Preview
- Doosan Robotics is getting ready to complete its IPO in Korea in September. The expected IPO price range is 21,000 won to 26,000 won.
- The company estimates its sales to surge from 67 billion won in 2023 to 766.3 billion won in 2027, representing 83.9% CAGR from 2023 to 2027.
- One of the major reasons why local investors will have a positive view of Doosan Robotics is due to Samsung’s investment in Rainbow Robotics whose share price increased 232% YTD.
EOFLOW/Medtronic Tender: Irrational Exuberance
- Eoflow (294090 KS) shares were up 4.4% on the back of Medtronic Plc (MDT US)’s earnings call comment that it expects the acquisition to close at the end of 2023.
- The bear view is that Medtronic’s messaging remained unchanged as it is still assessing Insulet Corp (PODD US) lawsuit and the potential impact on the timing and/or pricing.
- The bull view is that Medtronic’s comment underscores its commitment to close the transaction. It’s tough to take a call on risk/reward profile – at best it’s a brave buy.
Hanwha Ocean: Big Shares Dilution from Rights Offering of 2 Trillion Won
- After the market close on 23 August, Hanwha Ocean (042660 KS) confirmed that it will conduct a massive rights offering of 2 trillion won.
- The expected rights offering price is 22,350 won, which is 36% discount to current price.
- We believe this rights offering is likely to dilute the existing shareholders and negatively impact Hanwha Ocean’s share price.
Is Samsung M&A About to Happen?
- Local press states that Samsung Electronics Pref Shares (005935 KS)sold shares as they look to invest in their future capex
- The capex amount for 2023 will be around 40-50 trillion KRW and it doesn’t seem like W3 trillion is a needle mover
- With a new 3 year shareholder return plan, I would think maybe cash is needed to secure ammunition for M&A
StubWorld: Intouch “Cheap” As Thaksin Returns
- Intouch Holdings (INTUCH TB) plumbs new 12-month lows for its implied stub, and NAV discount as the former PM returns from exile.
- Preceding my comments on Intouch are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Analytics and News
- ✓ Events & Webinars
