In today’s briefing:
- StubWorld: SK Square And LG Chem’s Unjustified NAV Discounts
- Tencent: Meta Challenges Ahead
- NetEase (NTES) Pre-Earnings: Exploring Overseas Market
- Yaskawa – Increasingly Positive on Robotics but Still Too Early… Except…
- GRAB New Low in Store for a Basing Process – Where We like Buying.
- Base Inc: Down, But Not Down Enough
- LG Innotek: One of the Most Attractive Fundamentals in the Korean Stock Market
- An inspiration to all of the SPACs facing high redemptions
- Crypto Weekly: NFTs (Bing Dwen Dwen) With Chinese Characteristics
- UMC (UMC.US; 2303.TT): Although It Could Be ~1% ASP Changed Only, but the Price Is Lifted in 2Q22.
StubWorld: SK Square And LG Chem’s Unjustified NAV Discounts
- SK Square (402340 KS) was inexpensive after its November listing. Now it’s even cheaper.
- Preceding my comments on SK Square – and LG Chem Ltd (051910 KS) – 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%.
Tencent: Meta Challenges Ahead
- China Banking and Insurance Regulatory Commission warned on Friday against fund-raising and investment products related to the metaverse concept given the speculative nature of these investments.
- The Office of the United States Trade Representatives (USTR) announced on Thursday that e-commerce sites operated by Tencent have been placed on US government’s “notorious markets” list of entities.
- Tencent’s shares have dropped 5.2% during today’s trade following speculation that fresh regulatory crackdowns are possible following the warning on metaverse.
NetEase (NTES) Pre-Earnings: Exploring Overseas Market
- NTES is exploring overseas market by starting studios and selling games.
- We believe NTES has the experience in dealing with the license suspension for new games.
- We believe the stock has an upside of 48% for year end 2022.
Yaskawa – Increasingly Positive on Robotics but Still Too Early… Except…
- We spoke to Yaskawa today to understand recent trends and the detailed outlook on demand going forward.
- There were no major surprises with the company still relatively positive on demand remaining strong across the board though only robots seem to offer strong growth potential.
- Profitability for robots should also improve going forward creating a nice story, but valuations are still too dear.
GRAB New Low in Store for a Basing Process – Where We like Buying.
- GRAB exhibits overhead sell pressure with a new low in sight. Basing for a key low as selling pressure diminishes and the stage sets up for a cycle trough.
- RSI bull divergence (squeezing out latent sellers, as sell volumes/ downside momentum diminish). RSI near sub 30 should set up a key low as a counter marker.
- Ping the long side near 4.60, a weak bounce would place an emphasis on the 4.0 ideal low projection. 7.55/64 is the level to clear for bull traction.
Base Inc: Down, But Not Down Enough
- Both management and consensus seem to think that BASE Inc (4477 JP) will be able to maintain the COVID-19 growth trajectory beyond the COVID affected years.
- However, investors seem more circumspect with shares currently trading around 90% below the peak level.
- With the company likely failing to meet revenue targets and losses expanding exponentially, we think Base Inc could fall another 25-30% towards the pre-COVID level.
LG Innotek: One of the Most Attractive Fundamentals in the Korean Stock Market
- Lg Innotek (011070 KS), a leading global producer of optical electronic parts, has one of the most attractive fundamentals in Korea.
- LG Innotek has become one of the critical suppliers for Apple’s smartphones. For example, LG Innotek accounted for more than 70% of the camera modules used for Apple’s iPhone 13.
- In the intermediate term, LG Innotek is expected to benefit from higher demand for metaverse related cameras, 3D sensing modules, and autonomous vehicle cameras.
An inspiration to all of the SPACs facing high redemptions
- High redemption De-SPAC low float “squeezes” have returned in a big way, apparently.
- Starting with Inspirato (ISPO) on Thursday with seemingly all other low float (due to very high redemptions) De-SPACs following suit
- Software Acquisition Group Inc. III (SWAG) & Nogin (Valuation: $646M EV)
Crypto Weekly: NFTs (Bing Dwen Dwen) With Chinese Characteristics
- While crypto is definitely banned in China, the treatment of NFTs is somewhat unclear in China with state-sponsored backers like the Metaverse Industry Committee and the National Team’s Blockchain
- This weekly explores possible creations of NFTs with Chinese characteristics based on China’s own “permissioned” blockchain technology to be launched in March
- Meanwhile, China sponsored NFTs like the popular Olympics mascot Bing Dwen Dwen is now straddling unchartered territories as both an officially endorsed product as well as an official banned product
UMC (UMC.US; 2303.TT): Although It Could Be ~1% ASP Changed Only, but the Price Is Lifted in 2Q22.
- To our understanding, UMC and Samsung have dealt the 28nm wafer demand and have lifted 28nm wafer price in 2Q22.
- We think it’s possible to lift the wafer price again in 2H22 if TSMC decides to further lift wafer price recently.
- Entering the 5G era, there could be more demand in several aspects, like data storage, data transmission and processing, smartphone, and PC/NB upgrade and etc.
Before it’s here, it’s on Smartkarma
