In today’s briefing:
- Last Week in Event SPACE: Razer, Daiho, Uniti Group, Toshiba, Tabcorp, China Conch
- Sticking With Cyclical Value and Defensives; Adding Large-Cap Japan Technology
- SMIC (981.HK): Local Demand Is Very Strong, but EUV Embargo Is Constrained Technical Growth Still.
- OneStore IPO Preview
Last Week in Event SPACE: Razer, Daiho, Uniti Group, Toshiba, Tabcorp, China Conch
- Razer Inc (1337 HK)‘s Scheme Document flags the abolishment of the headcount test may become law ahead of the shareholder meeting. That is a game-changer. If true.
- Daiho Corp (1822 JP) has announced a deal which is not quite what it looks like. This situation is kind of a governance disaster.
- Uniti Group Ltd (UWL AU) backs the revised Morrison/Brookfield tilt and severs ties with Macquarie
Sticking With Cyclical Value and Defensives; Adding Large-Cap Japan Technology
- The lows have likely been established for this correction, but a bottoming process would likely take weeks or potentially months and could come with more tests of the lows.
- Japan’s TOPIX and Nikkei 225 are each testing their respective downtrends. The EURO STOXX 50 is testing resistance in the 4040-4090 range. Germany’s DAX is testing major resistance at 14,815-14,950.
- It is likely that this initial 2-3 week bounce has run its course; stick with cyclical value and defensives, areas we have been focused on for most of 2022.
SMIC (981.HK): Local Demand Is Very Strong, but EUV Embargo Is Constrained Technical Growth Still.
- SMIC will spend ~US$5bn in Capex in 2022, of which only the Beijing Fab is 12”, and Shenzhen and Tianjin are 8” Fabs.
- SMIC has three major trends: 1) the local demand is booming rapidly, 2) Auto, industry and others have developed actively, and 3) Huawei’s event had made a great impact.
- We note SMIC’s capacity of each Fab is an estimation because 1) the local governments’ subsidies are somewhat complicated, and 2) it is involved with three local governments in 2022.
OneStore IPO Preview
- OneStore is getting ready to complete its IPO in May with IPO price range of 34,300 won to 41,700 won. It is one of the largest app operators in Korea.
- The IPO base deal size is from $187 million to $227 million. The expected market cap after the IPO is from 0.9 trillion won to 1.1 trillion won.
- OneStore generated sales of 214.2 billion won (up 38% YoY), operating loss of 5.8 billion won, and EBITDA of 8 billion won in 2021.
Before it’s here, it’s on Smartkarma
