In today’s briefing:
- Fuji Soft (9749) Reiterates Support for KKR Tender#1, Recos Shareholders Wait, Ignores Nozawa Letter
- (Mostly) Asia-Pac M&A: GJS/Haitong, Fuji Soft, Bossini, Dyna-Mac, Beijing Capital Grand, TCM
- Horizon Robotics (9660 HK) IPO: The Bear Case
- Allegro MicroSystems Inc.: Enhanced Product Portfolio With Focus on Automotive & E-mobility Applications Driving Our Bullishness! – Major Drivers
- HK Connect SOUTHBOUND Flows (To 18 Oct 2024); Net Flows Big, Selling in Brokers, Buying in Props
- Blackbaud Inc.: Is The Recent Underperformance Here To Stay? – Major Drivers
- Tenable Holdings Inc.: Can Its Robust Pipeline in Public Sector Opportunities Be Its Biggest Growth Factor? – Major Drivers
- Teradata Corporation: Increased Cloud Adoption & Services Expansion Catapulting Growth! – Major Drivers
- Viavi Solutions Inc.: Is Its Leadership in Anti-Counterfeiting & 3D Sensing Technologies Here To Stay? – Major Drivers
- Vontier Corporation: These Are The 4 Biggest Challenges In Its Path! – Major Drivers
Fuji Soft (9749) Reiterates Support for KKR Tender#1, Recos Shareholders Wait, Ignores Nozawa Letter
- On Tuesday, Fuji Soft Inc (9749 JP) said they had received the legally-binding Bain proposal on 11 October, but noted they could not confirm founder Nozawa-san’s agreement or intentions.
- Founder Nozawa Hiroshi responded with a pair of impassioned letters Thursday criticising process, asking Fuji Soft to withdraw support for KKR, and switch to or allow the Bain Offer.
- Fuji Soft on Friday reiterated support for the KKR First Tender, but interestingly, saw a majority resolve to suggest common shareholders NOT tender because of the optionality.
(Mostly) Asia-Pac M&A: GJS/Haitong, Fuji Soft, Bossini, Dyna-Mac, Beijing Capital Grand, TCM
- I tally 44 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
- One new deals discussed this week: Bossini International (592 HK) low-balled scrip Offer from Viva Goods (933 HK). Beijing Capital Grand (1329 HK) also suspended due to the Takeovers code.
- Key updates took place on: GJS (2611 HK)/Haitong Securities (600837 CH), Fuji Soft Inc (9749 JP), Hotel Property Investments (HPI AU), TCM (570 HK) and Dyna Mac Holdings (DMHL SP)
Horizon Robotics (9660 HK) IPO: The Bear Case
- Horizon Robotics (9660 HK), a provider of autonomous driving products and services, is seeking to raise up to US$696 million through a HKEx IPO.
- In Horizon Robotics (9660 HK) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The bear case rests on high related parties’ revenue, customer concentration risk, pricing pressure, uncertain path to profitability, high cash conversion cycle and FCF burn.
Allegro MicroSystems Inc.: Enhanced Product Portfolio With Focus on Automotive & E-mobility Applications Driving Our Bullishness! – Major Drivers
- Allegro MicroSystems presented their first fiscal quarter 2025 results, positioning themselves within a competitive and challenging market environment.
- Positive indicators can be discerned from their performance, although there remain areas of concern which reflect broader market conditions and segment-specific issues.
- Starting with the positives, Allegro MicroSystems reported first-quarter sales of $167 million, which was above the midpoint of their guidance.
HK Connect SOUTHBOUND Flows (To 18 Oct 2024); Net Flows Big, Selling in Brokers, Buying in Props
- This past week saw mainland investors trade HK$476bn of stock. Not as big as last “week” but still big. BABA buying has slowed, but net buying was still HK$24.4bn
- The buying is starting to see a longer tail of net positive names, and properties this week saw big net buying, even before the Sunac placement which added more.
- High-Div SOEs are seeing outflows as beta sees inflows. I expect this to continue.
Blackbaud Inc.: Is The Recent Underperformance Here To Stay? – Major Drivers
- Blackbaud, Inc. reported a strong second quarter in 2024, showing significant improvement in various financial metrics and advancing its strategic initiatives.
- The company, a leading provider of software to power social impact, has focused on product innovation tailored for non-profit organizations while implementing crucial revenue initiatives and maintaining careful attention to cost management and cash flow enhancement.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
Tenable Holdings Inc.: Can Its Robust Pipeline in Public Sector Opportunities Be Its Biggest Growth Factor? – Major Drivers
- Tenable’s Q2 2024 earnings report presents a mixed picture, with various strengths and areas of concern that are pivotal for investors to consider.
- The company, a notable player in the cybersecurity space, reported revenues and earnings that surpassed expectations, but encountered headwinds with calculated current billings (CCB), which fell short of projected figures.
- This discrepancy signals a challenging selling environment and prompts a cautious outlook for the rest of the year.
Teradata Corporation: Increased Cloud Adoption & Services Expansion Catapulting Growth! – Major Drivers
- Teradata’s second quarter earnings for the 2024 fiscal year demonstrated a mixed performance in a challenging macroeconomic environment.
- On the positive side, Teradata highlighted significant growth in its cloud-based analytics revenue, which grew by 32% in constant currency.
- The company also mentioned a strong cloud net expansion rate of 123%, indicating robust customer expansions within its cloud segment.
Viavi Solutions Inc.: Is Its Leadership in Anti-Counterfeiting & 3D Sensing Technologies Here To Stay? – Major Drivers
- Viavi Solutions reported its fourth quarter and full year results for fiscal 2024, showcasing varied performance across its different segments.
- For the fourth quarter, the company posted net revenue of $252 million, at the midpoint of its guidance range of $246 million to $258 million and reflected a 2.4% sequential increase but a 4.4% decline year-over-year.
- The full-year revenue stood at $1 billion, marking a 9.6% decline year-over-year, influenced predominantly by subdued spending from service providers and Network Equipment Manufacturers (NEMs).
Vontier Corporation: These Are The 4 Biggest Challenges In Its Path! – Major Drivers
- Vontier Corporation, in its recent earnings call for the second quarter of 2024, presented a mixed financial performance impacted by several external factors.
- The company reported a core decline in sales by approximately 3%, primarily due to delays in customer projects and discretionary spending which affected orders and shipments towards the end of the quarter.
- These delays were noted across Vontier’s Environmental & Fueling Solutions segment and Alternative Energy business, significantly impacting the quarter’s results.
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