In today’s briefing:
- Sea Ltd: Mass Layoffs at Shopee, Tinkering Here and There Won’t Make Shopee A World-Class Business
- Softbank Group – Semiconductor Weakness Expands Discount
- Samsung Electronics Yearend Special Dividend Projections
Sea Ltd: Mass Layoffs at Shopee, Tinkering Here and There Won’t Make Shopee A World-Class Business
- Sea Ltd (SE US)’s share price fell 7.42% yesterday after a report broke out about mass layoffs across Shopee’s international operations.
- We think Shopee has a fundamentally flawed business model and tinkering here and there won’t be enough to make Shopee a world-class business.
- With Free Fire falling fast and Shopee starved of funds, we fear that there could be another leg down for Sea Ltd shares in the short term.
Softbank Group – Semiconductor Weakness Expands Discount
- Tech weakness has not only eroded the underlying asset value but raised concerns on leverage and the potential for an ARM IPO. The discount expanded by 4pp in one week
- The timing and pricing of an ARM IPO looks more precarious as the semiconductor sector fell 13% over two days and is now down 34% from all-time highs
- Currency tailwinds have provided some offset with an unprecedented dollar move mimiting downside in Softbank shares to 8% YTD versus a 24% decline for the $-based ADR
Samsung Electronics Yearend Special Dividend Projections
- This year’s consensus OCF is at least ₩75T, and CAPEX is ₩45T, less than last year. As a result, we will likely reach an FCF of ₩30T.
- Then the yearend special DPS would be ₩764, which provides dividend yields of 2.97% (Ord) and 3.22% (Pref), respectively, even based on the conservative OCF estimates.
- This is a sufficiently attractive dividend yield for Pref. Hence, unless the SEC’s price enters a sharp uptrend, the bullish Pref will likely continue.
Before it’s here, it’s on Smartkarma
