In today’s briefing:
- LG Energy Solution: Potential Sellers Post Lock-Up End, Mkt Share Losses, & LG Chem’s Capital Needs
- HPSP IPO Book Building Results Analysis
- Is Nvidia Really A Bargain Or Is There More Pain Ahead?
- XPER: Positive Catalyst to Growth Story
- DELTA: Shortage Issue Still Persists Despite Concerns on Weakening Demand in 2022
LG Energy Solution: Potential Sellers Post Lock-Up End, Mkt Share Losses, & LG Chem’s Capital Needs
- Although LG Chem may not sell additional stake in LGES this year, over the next 2-3 years, there is a high probability of LG Chem selling some stake in LGES.
- On 27 July 2022, 86% stake of LG Energy Solution could be sold, of which 81.8% is owned by LG Chem and the remaining 4.2% is owned by institutional investors/others.
- LGES’s market share in the global rechargeable battery usage declined significantly from May 2021 to May 2022, due to recent EV disruption at Tesla’s Shanghai plant and rise of BYD.
HPSP IPO Book Building Results Analysis
- HPSP (403870 KS) announced its IPO book building results. The IPO price has been determined at 25,000 won, which is at the high end of the IPO price range.
- There were 1,577 institutions that were involved in the IPO survey and the demand ratio was 1,511 to 1. The IPO offering amount is 75 billion won.
- Our base case valuation of HPSP is target price of 38,228 won per share, which represents 53% higher than the high end of the IPO price range of 25,000 won.
Is Nvidia Really A Bargain Or Is There More Pain Ahead?
- Nvidia lost nearly 35% of its value in a matter of months, when the broader market fell by less than 15% during the same period.
- The company’s share price might not recover to its 2021 highs anytime soon, according to the company’s report.
- About ten months ago I took a deep dive into NVIDIA’s (NASDAQ:NVDA) share price and laid out my thesis on why investors should be less concerned about the company’s business fundamentals and laser focused on its momentum exposure.
XPER: Positive Catalyst to Growth Story
- XPER is accelerating its presence within connected TVs with the acquisition of Vewd Software
- Vewd Software is a middleware developer that has been installed in more than 450 million connected TVs and devices.
- The synergistic value of Vewd could be revealed to shareholders in the next 12 to 18 months when XPER begins to monetize Vewd’s install base
DELTA: Shortage Issue Still Persists Despite Concerns on Weakening Demand in 2022
- We maintain our BUY rating and TP of Bt419 based on based on 51.7xPE’22E. Business update meeting last Friday came with positive news on improving shortage situation by 4Q22
- 2Q22E earnings to decline QoQ: We believe that 2Q22E net profit will be at Bt2.7bn (+61% YoY, -4% QoQ).
- We expect 2Q22E sales to be at Bt24bn (+15%YoY, -4% QoQ). QoQ decline is mainly due to lockdown issues in China and longer holidays during 2Q22.
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