In today’s briefing:
- TSMC (2330.TT; TSM.US): Holds Shareholders’ Meeting on June 3rd.
- Keisei Electric (9009) | Neither Hidden nor Structurally Mispriced
- US – China: Restrictions on Semiconductors Are Getting Worse
- Asian Equity: Performance of Our Quant Baskets: Indian MidCaps, Asian Dividend Yields Rule the Roost
- AMD Just Made a Big Move in AI and Co-Packaged Optics: Here’s What Investors Need to Know!
- Zscaler’s $675 Million Acquisition Of Red Canary—Here’s How It Could Reshape Cybersecurity & The $5 Billion SOC Race!
- Eli Lilly’s Bold Move: Can the SiteOne Acquisition Knock Vertex Off Its Pain Drug Throne?
- Check Point Makes A Bold Bet with Veriti: Can Preemptive Security Reinvent Cyber Risk Management?
- HAL (NSE: HAL) – Strong Visibility, Undervalued Optionality
- Medical Data Vision Co., Ltd. (3902 JP): Research Update
TSMC (2330.TT; TSM.US): Holds Shareholders’ Meeting on June 3rd.
- There’s nothing TSMC can do about U.S. tariffs but keep working hard and ensure TSMC’s technology remains the best in the world.
- Recently, the NT dollar has strengthened by 8%, and our operating margin has dropped by over 3% due to exchange rate fluctuations.
- If our technology could be stolen so easily, TSMC wouldn’t be where it is today.
Keisei Electric (9009) | Neither Hidden nor Structurally Mispriced
- Keisei’s OLC stake distorts valuation optics, but is already transparently priced by the market.
- Activist criticism over “true” ROE reflects accounting semantics, not hidden inefficiency.
- Core business plus OLC stake offers modest returns; upside exists, but hardly suggestive of chronic long-term underperformance
US – China: Restrictions on Semiconductors Are Getting Worse
- Nvidia H20 sales to China were barred last month. Nvidia first mentioned designing a new China-specific chip. Maybe not: it looks very difficult to work around the updated US limits
- Semiconductor design software was barred last week. Synopsys suspended its guidance. My industry checks suggests that the ban applies to Xiaomi (ie the new smartphone chip) and to Lenovo.
- Hanmi Semi stopped shipping TC Bonder to Chinese clients. This is critical to make HBM memory that goes into AI processors.
Asian Equity: Performance of Our Quant Baskets: Indian MidCaps, Asian Dividend Yields Rule the Roost
- Of our seven quantitative stock baskets, four have operated for more than three months. We measure the performances of these four – Consistent Compounders, SMID Compounders, Dividend Yielders, Indian Mid-Caps.
- Consistent Compounders, though up since inception, has underperformed MXASJ mildly. SMID Compounders has underperformed sharply. Asian Dividend Yielders has outperformed handsomely and Indian Mid-Caps, by a stupendous margin.
- We think the Indian mid-cap basket could take a short-term breather. The Dividend Yield basket could outperform, as investors’ preference for yields in uncertain times could continue for now.
AMD Just Made a Big Move in AI and Co-Packaged Optics: Here’s What Investors Need to Know!
- In a strategic move underscoring its ambitions in AI infrastructure and next-gen interconnects, AMD recently acquired Silicon Valley-based Enosemi, a startup specializing in photonic integrated circuits.
- The acquisition is part of AMD’s broader effort to catch up with competitors like Nvidia, Intel, and Broadcom in the co-packaged optics (CPO) space, a technology increasingly viewed as essential for building high-bandwidth, energy-efficient AI systems.
- Enosemi, founded in 2023 by semiconductor engineers Ari Novack and Matthew Streshinsky, had previously collaborated with AMD on photonics development and brings with it a small but elite team of PhD-level engineers.
Zscaler’s $675 Million Acquisition Of Red Canary—Here’s How It Could Reshape Cybersecurity & The $5 Billion SOC Race!
- Zscaler, a major force in cloud-based cybersecurity, has officially signed a definitive agreement to acquire Red Canary, a recognized leader in Managed Detection and Response (MDR), in a strategic push to redefine security operations through AI and data integration.
- The acquisition, expected to close in August 2025, marks Zscaler’s second major deal in the past 18 months after acquiring Avalor, a security data fabric provider.
- Red Canary brings more than $140 million in annual recurring revenue (ARR), a seasoned MDR go-to-market team, and agentic AI workflows already deployed in production.
Eli Lilly’s Bold Move: Can the SiteOne Acquisition Knock Vertex Off Its Pain Drug Throne?
- Eli Lilly and Company has made a decisive move to expand its footprint in neuroscience and pain management by announcing its acquisition of SiteOne Therapeutics, a clinical-stage biotech focused on developing non-opioid pain treatments.
- The deal, valued at up to $1 billion including milestones, centers around STC-004, a Phase 2-ready NaV1.8 inhibitor that could become a next generation oral pain medication.
- The acquisition underscores Lilly’s broader ambition to lead in addiction-free, chronic pain solutions at a time when regulatory and societal pressures around opioid misuse continue to rise.
Check Point Makes A Bold Bet with Veriti: Can Preemptive Security Reinvent Cyber Risk Management?
- In a strategic move that signals a shift toward automated, prevention-first cybersecurity, Check Point Software Technologies has announced its acquisition of Veriti Cybersecurity, a pioneering Israeli startup specializing in preemptive threat exposure management.
- The transaction, valued at over $100 million, is expected to close by the end of Q2 2025 and marks the first major acquisition under new CEO Nadav Zafrir.
- The deal comes at a time when Check Point is pushing hard on its hybrid mesh architecture vision and doubling down on its Infinity Platform to unify security across endpoints, cloud, and networks.
HAL (NSE: HAL) – Strong Visibility, Undervalued Optionality
- Over FY22–FY25, HAL’s revenue grew at a CAGR of ~8%, while PAT rose at ~15% CAGR, with the order book doubling to ₹1.89 lakh Cr, providing LT visibility.
- India’s defence indigenization drive, large platform rollouts (LCA Mk1A, LUH, AMCA, engines), positions HAL to address a Rs3–4 lakh Cr opportunity over the next 5–10 years, including exports.
- Despite strong earnings growth, zero debt, and long-term JV upside (e.g., Safran engine), HAL trades at a P/E of ~33–38×, below many peers, indicating room for re-rating.
Medical Data Vision Co., Ltd. (3902 JP): Research Update
- Medical Data Vision [MDV] reported FY25 Q1 (Dec year-end) results with sales coming in largely in line with the firm’s guidance while operating profit [OP] was higher than expected.
- The firm produced Q1 gross profit [GP] of1,085mil (+3.8% YoY) and OP of ¥17mil (-67.6% YoY) on sales of ¥1,532mil (+10.4% YoY).
- Ther firm’s profit targets remain unchanged, guiding for FY25 OP of ¥2,600mil and RP of ¥2,500mil.
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