Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 30 years of experience in the Korean/Asian equity research. Major sectors coverage include the following:
- Technology 
- Consumer 
- Special Situations/Deep Value Plays
- Tender Offers/M&As
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

Where Are We in the Semiconductor Memory Price Collapse?

Thematic (Sector/Industry)

<ul>
<li>On August 22nd, the South Korean government announced that it has decided to terminate the GSOMIA (General Security of Military Information Agreement) with the Japanese government. As a result of the South Korean government's decision to terminate GSOMIA, this will likely to further fuel the discord the political relations between Japan and South Korea and the Korean stock market is likely to face further weakness, especially companies that are negatively impacted by this conflict.</li>
<li>
Cho Kuk has been the most discussed person in South Korea in the past two weeks. He is a nominee to become the next Justice Minister in South Korea. However, he and his family/relatives have been mired in numerous allegations which could make it difficult for him to become the next Justice Minister. On August 27th, the<a href="http://www.koreaherald.com/view.php?ud=20190827000730" target="_blank" rel="noopener"> government prosecutors</a> raided universities, a medical center and other facilities to investigate Justice Minister nominee Cho Kuk and his family.</li>
<li>
<a href="https://www.smartkarma.com/profiles/brian-freitas" target="_blank" data-smartkarma-citation="accounts:4091" rel="noopener">Brian Freitas</a> puts out a weekly on the Japan short interest data. The short notional in the market for the week ended 23 August is US$24.95bn with the largest short positions in <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a>, <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a>, <a href="https://www.smartkarma.com/entities/canon-inc" target="_blank" data-smartkarma-citation="entities:1:1" rel="noopener">Canon Inc (7751 JP)</a>,  <a href="https://www.smartkarma.com/entities/taiyo-yuden-co-ltd" target="_blank" data-smartkarma-citation="entities:9924:1" rel="noopener">Taiyo Yuden (6976 JP)</a> and <a href="https://www.smartkarma.com/entities/sumitomo-mitsui-financial-gr" target="_blank" data-smartkarma-citation="entities:217:1" rel="noopener">Sumitomo Mitsui Financial (8316 JP)</a>. Most shorted stocks as a percentage of free float are Amazia, <a href="https://www.smartkarma.com/entities/extreme-co-ltd" target="_blank" data-smartkarma-citation="entities:5311:1" rel="noopener">Extreme Co Ltd (6033 JP)</a>, <a href="https://www.smartkarma.com/entities/taiyo-yuden-co-ltd" target="_blank" data-smartkarma-citation="entities:9924:1" rel="noopener">Taiyo Yuden (6976 JP)</a> and <a href="https://www.smartkarma.com/entities/leopalace21-corp" target="_blank" data-smartkarma-citation="entities:8244:1" rel="noopener">Leopalace21 Corp (8848 JP)</a>. </li>
<li>
MEGVII TECHNOLOGY IPO - <a href="https://www.smartkarma.com/profiles/arun-george" target="_blank" data-smartkarma-citation="accounts:1680" rel="noopener">Arun George</a> wrote about this company in his note, <a href="https://www.smartkarma.com/insights/megvii-ipo-initiation-anonymous-no-more" target="_blank" data-smartkarma-citation="insights:32041" rel="noopener">Megvii IPO Initiation: Anonymous No More</a>. <a href="https://www.smartkarma.com/entities/megvii-technology" target="_blank" data-smartkarma-citation="entities:28272:1" rel="noopener">Megvii Technology (1737211D HK)</a> is a Chinese AI company best known for its facial recognition platform Face++. It is backed by Ant Financial (15.1% shareholder), <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group Holding (BABA US)</a> (14.3% shareholder) and <a href="https://www.smartkarma.com/entities/lenovo-group-ltd" target="_blank" data-smartkarma-citation="entities:13359:1" rel="noopener">Lenovo (992 HK)</a> (1.2% shareholder). Overall, Arun believes Megvii is a decent “new economy” growth story as the positives outweigh the negatives. </li>
</ul>


On August 22nd, the South Korean government announced that it has decided to terminate the GSOMIA (General Security of Military Information Agreement) with the Japanese government. As a result of the South Korean government's decision to terminate GSOMIA, this will likely to further fuel the discord the political relations between Japan and South Korea and the Korean stock market is likely to face further weakness, especially companies that are negatively impacted by this conflict.

Cho Kuk has been the most discussed person in South Korea in the past two weeks. He is a nominee to become the next Justice Minister in South Korea. However, he and his family/relatives have been mired in numerous allegations which could make it difficult for him to become the next Justice Minister. On August 27th, the government prosecutors raided universities, a medical center and other facilities to investigate Justice Minister nominee Cho Kuk and his family.

Brian Freitas puts out a weekly on the Japan short interest data. The short notional in the market for the week ended 23 August is US$24.95bn with the largest short positions in Itochu Corp (8001 JP), Toyota Motor (7203 JP), Canon Inc (7751 JP),  Taiyo Yuden (6976 JP) and Sumitomo Mitsui Financial (8316 JP). Most shorted stocks as a percentage of free float are Amazia, Extreme Co Ltd (6033 JP), Taiyo Yuden (6976 JP) and Leopalace21 Corp (8848 JP). 

MEGVII TECHNOLOGY IPO - Arun George wrote about this company in his note, Megvii IPO Initiation: Anonymous No More. Megvii Technology (1737211D HK) is a Chinese AI company best known for its facial recognition platform Face++. It is backed by Ant Financial (15.1% shareholder), Alibaba Group Holding (BABA US) (14.3% shareholder) and Lenovo (992 HK) (1.2% shareholder). Overall, Arun believes Megvii is a decent “new economy” growth story as the positives outweigh the negatives. 


Sumitomo Mitsui Financial Group (8316 JP)

Samsung Electro Mechanics Co, Ltd. (009150 KS)

Topsports International Holdings (6110 HK)

The Week That Was @ Smartkarma in Korea, Japan, China/HK: Megvii, GSOMIA, Cho Kuk, & Sony