{ "docId": "019dd923-622c-750b-8b9a-931d15d7e8ac", "docSlug": "c71f39d7ed80", "documentTitle": "SMART Global Holdings, Inc. (SGH)", "authorId": "60_Wolfpack_Research", "authorName": "Wolfpack Research", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2019-09-25 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 3, "pageCount": 35, "prevPage": 2, "nextPage": 4, "slideType": "executive_summary", "function": "summarize", "density": "overcrowded", "nDataPoints": 1, "notes": "The slide uses a narrative structure to expose a business risk related to regulatory changes.", "elementsJson": [ "headline_text", "bullet_list", "footnote" ], "metadataConfidence": 0.95, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9a-931d15d7e8ac/3", "deckHref": "/decks/019dd923-622c-750b-8b9a-931d15d7e8ac", "deckJsonHref": "/decks/019dd923-622c-750b-8b9a-931d15d7e8ac.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9a-931d15d7e8ac#slide-3", "components": [ { "bbox": null, "kind": "callout", "text": "In other words: no PPB, no customers. The loss of these incentives will crush", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-78b4-70ad-b390-6839fa6a4cf5", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.86, "x": 0.068, "y": 0.56 }, "kind": "list", "text": "We have uncovered SGH's own meetings and agendas with the Brazilian authorities... 'This reduction of the Import Tax diminishes the protection of the national industry...'", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "17c761eb-083a-4d43-9b71-c858f4888dbc", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.86, "x": 0.068, "y": 0.425 }, "kind": "list", "text": "OEMs no longer have an incentive to pay a premium for SGH's commodity memory products... This new structure went into effect on July 1, 2019.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "26b9f648-6540-4839-8035-546ec4fe2d98", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.86, "x": 0.068, "y": 0.815 }, "kind": "list", "text": "SGH noted in its S-1 that customers only buy as much Brazilian-made memory as they need to qualify for the PPB tax incentives. In other words: no PPB, no customers.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "594eabeb-10d6-4c3c-90e0-3728ce638275", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.86, "x": 0.068, "y": 0.218 }, "kind": "list", "text": "SMART Brazil has been a core profit driver for SGH but the tax subsidy it relies on has been changed with severely detrimental consequences.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "7f45faf9-0c23-4fa6-854e-3a68eefbf38b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.86, "x": 0.068, "y": 0.695 }, "kind": "list", "text": "SMART Brazil has been an anomaly in the memory supply chain... without the PPB scheme, SMART Brazil no longer has any competitive advantage.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "96ee2df1-5e79-452f-b48a-c1ad558a11a4", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.86, "x": 0.068, "y": 0.268 }, "kind": "list", "text": "SMART Brazil has been playing an arbitrage game... The arbitrage opportunity has collapsed.", "attrs": null, "subkind": "bullet", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a5db5440-9e04-4c63-8bfb-f473796bef1a", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"This reduction of the Import Tax diminishes the protection of the national industry and, if it comes along with the reduction of the tax benefit that we have today in the Computer Law, it may be big enough that there is no longer interest of a company, multinational company to produce in Brazil\" — SMART Brazil President", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-78b4-70ad-b390-6d257c8f0529", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.7, "x": 0.068, "y": 0.905 }, "kind": "source-note", "text": "http://www.telesintese.com.br/reducao-do-imposto-de-importacao-pode-provocar-fuga-da-industria-de-tic-alerta-empresario/", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "dfbcdba5-aca8-4d45-b0af-d64607e99a9a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.15, "x": 0.068, "y": 0.185 }, "kind": "title", "text": "1. 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