Category

TMT/Internet

Daily Brief TMT/Internet: Shinko Electric Industries, Taiwan Semiconductor (TSMC) – ADR, Kokusai Electric , Shift Inc and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Merger Arb Mondays (22 Apr) – Shinko, Inageya, C&F Logistics, Hollysys, Azure, Qantm IP, Tietto
  • TSMC Just Provided Substantial Visibility into Their Long-Term Growth Estimate; ASML Adds Color
  • Taiwan Dual-Listings Monitor: TSMC Breaks Down From Extreme, UMC Discount Near Historical Low
  • ECM Weekly (22nd Apr 2024) – Kokusai, J&T, Voda IDEA, ChaPanda, Cloudchain, Johor Plant, Aadhar
  • Shift: On a Road to Recovery
  • TSMC, ASML, VAT Group, and Alphawave Earnings


Merger Arb Mondays (22 Apr) – Shinko, Inageya, C&F Logistics, Hollysys, Azure, Qantm IP, Tietto

By Arun George


TSMC Just Provided Substantial Visibility into Their Long-Term Growth Estimate; ASML Adds Color

By Vincent Fernando, CFA

  • TSMC and ASML reported 1Q24 results last week; both stocks have fallen post results, impacted by global concerns despite a strong outlook for these two leaders into 2025E.
  • TSMC guided for strong growth not just in 2024E, but if one digs into management’s comments, they actually provided strong visibility into their 2028E internal revenue expectations.
  • For ASML, its EUV product business is the key indicator to watch. We believe TSMC shares will continue to re-rate even through a period of global economic softness.

Taiwan Dual-Listings Monitor: TSMC Breaks Down From Extreme, UMC Discount Near Historical Low

By Vincent Fernando, CFA

  • TSMC: +9.2% Premium, Major Breakdown From Previous Historically Extreme High
  • UMC: -1.9% Discount, Is Near Low End of Historical Range
  • ASE: +10.4%; ADR Short Interest Jumps to Very High Level vs. History

ECM Weekly (22nd Apr 2024) – Kokusai, J&T, Voda IDEA, ChaPanda, Cloudchain, Johor Plant, Aadhar

By Sumeet Singh


Shift: On a Road to Recovery

By Shifara Samsudeen, ACMA, CGMA

  • Shift Inc (3697 JP) ’s share price has been down more than 50% YTD with the release of 1QFY08/2024 results in January 2024 which saw a drop in margins.
  • The company’s aggressive investment in HR and system reinforcement led to a decline in margins, however, margins saw a QoQ improvement in 2QFY08/2024.
  • Despite there being an improvement in 2Q and the company expecting the margins to bounce back in 4Q, Shift’s share price has continued to fall.

TSMC, ASML, VAT Group, and Alphawave Earnings

By Douglas O’Laughlin

  • It’s time for the main event: earnings are upon us. As is customary, let’s start with TSMC, move to ASML and Alphawave, and then discuss VAT Group.
  • TSM revenue is above guidance, gross margins are a bit ahead of the midpoint, and operating margins are at the high end of guidance.
  • First, while this is a good result, semiconductors are due for a correction. I wrote about this in March, and SOXX has quietly crept downwards since then.

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Daily Brief TMT/Internet: Taiwan Semiconductor (TSMC), Hollysys Automation Technologies and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • TSMC. How To Turn Chicken Salad Into Chicken Sh*t
  • Weekly Deals Digest (21 Apr) – Hollysys, Shinko, Inageya, Hang Lung, Kokusai, HD Hyundai Marine


TSMC. How To Turn Chicken Salad Into Chicken Sh*t

By William Keating

  • Q124 revenues of $18.87 billion, marginally above the high end of the guided range, up 12.9% YoY and down 3.8% QoQ. Guided Q224 +6% QoQ.  Maintained full year 2024 outlook
  • Unnecessary, minor downward revisions for semi & foundry growth, combined with confusion about the reason triggered an allergic reaction on the markets. TSMC down ~8% since.
  • SMCI plunged 23% by Friday close, ARM down 16.9%, NVIDIA down 10%, AMD & Micron down ~5% etc. Nice one, TSMC!

Weekly Deals Digest (21 Apr) – Hollysys, Shinko, Inageya, Hang Lung, Kokusai, HD Hyundai Marine

By Arun George


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Daily Brief TMT/Internet: ASML Holding NV, Braze Inc, Arrow Electronics, Teradata Corp, Varonis Systems, Acal PLC, Workiva Inc, Frontier Communications Parent, Iridium Communications, Kyndryl Holdings and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • ASML. Maintaining 2024 Guidance Despite Sharp Decline In New Bookings
  • Braze Inc.: First-Party Data Investment As An Important Business Model! – Major Drivers
  • Arrow Electronics: What Are The Biggest Challenges In Its Transition To The IT-As-A-Service Model? – Major Drivers
  • Teradata Corporation: How Long Will The Growth in Cloud Annual Recurring Revenue (ARR) Last? – Major Drivers
  • Varonis Systems: Will Its Transition to SaaS Offering Be Smooth Enough To Warrant A Bullish Rating? – Major Drivers
  • discoverIE Group – FY24 EPS in line; good margin progress
  • Workiva Inc.: Innovations in AI and Reporting Capabilities Are Upping Their Game! – Major Drivers
  • Frontier Communications: Expansion of the Fiber Footprint & 3 Other Key Growth Drivers
  • Iridium Communications Inc.: Expanding Commercial Broadband Services To Enhance Top-Line Growth! – Major Drivers
  • Kyndryl Holdings: Focus on Customer Relations & Contract Changes! – Major Drivers


ASML. Maintaining 2024 Guidance Despite Sharp Decline In New Bookings

By William Keating

  • ASML reported Q124 revenues of €5.3 billion, in line with expectations, down 27% QoQ and down 21% YoY.
  • Guided Q224 for €5.95 billion, down ~23% YoY. This implies H224 will have to be much stronger than H124 in order to maintain full year 2024 guidance of flat YoY
  • New order intake was €3.6 billion, down significantly from the €9.2 billion in the prior quarter, and challenging the narrative of a strong growth year in 2025

Braze Inc.: First-Party Data Investment As An Important Business Model! – Major Drivers

By Baptista Research

  • Braze Inc. had a productive Q4 for the fiscal year 2024, reporting robust revenue growth and notable leaps in operational efficiency.
  • The company generated $131 million in revenue, up 33% year-over-year and 6% quarter over-quarter.
  • It is important to mention that these figures were achieved despite macroeconomic headwinds and tight scrutiny of budgets, reflecting the high ROI and enduring value of Braze’s customer engagement platform.

Arrow Electronics: What Are The Biggest Challenges In Its Transition To The IT-As-A-Service Model? – Major Drivers

By Baptista Research

  • Arrow Electronics had a decent performance in 2023 despite the challenging macroeconomic conditions and inventory-related issues.
  • Arrow Electronics managed to post a full-year revenue of $33.1 billion and a non-GAAP operating margin of 4.8%.
  • The company also reported strong cash flow from operations, enabling the repurchase of approximately $750 million in shares over the year.

Teradata Corporation: How Long Will The Growth in Cloud Annual Recurring Revenue (ARR) Last? – Major Drivers

By Baptista Research

  • Teradata Corporation, a leading hybrid multi-cloud analytics and data platform company, recently held its fourth quarter and full year 2023 earnings call, which indicates the company’s progress and future outlook in its sector.
  • The company emphasizes its focus on customer satisfaction by delivering solutions for complex data and analytics problems.
  • 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.

Varonis Systems: Will Its Transition to SaaS Offering Be Smooth Enough To Warrant A Bullish Rating? – Major Drivers

By Baptista Research

  • Varonis Systems Inc. showcased strong performance in the fourth quarter and full year 2023 as they continued their transition towards Software-as-a-Service (SaaS).
  • The successful transition of their offerings led to an incredible growth of the SaaS Annual Recurring Revenue (ARR) from several million dollars in 2022 to approximately $125 million by the end of 2023.
  • This growth in SaaS ARR represented approximately 23% of the total company ARR at year-end.

discoverIE Group – FY24 EPS in line; good margin progress

By Edison Investment Research

discoverIE anticipates reporting FY24 underlying EPS in line with board expectations. After a period in mid-FY24 of working down inventory, customers appear to be reverting to normal ordering patterns, with Q424 organic revenue growth of 2% y-o-y and 11% q-o-q and a strong pipeline of design wins at year-end. We have revised our forecasts to reflect lower revenue, partly due to a disposal, but maintain our profit forecasts, which results in operating margin expansion in FY24 and FY25.


Workiva Inc.: Innovations in AI and Reporting Capabilities Are Upping Their Game! – Major Drivers

By Baptista Research

  • Workiva ended 2023 with solid Q4 results, delivering an 18% growth in subscription revenue and a non-GAAP operating profit that exceeded its guidance.
  • For the total of 2023, the firm overshot its earlier set guidance in February and Q3 2023, with a 20% growth in subscription revenue and 17% in total revenue.
  • This marks Workiva as a growth player.

Frontier Communications: Expansion of the Fiber Footprint & 3 Other Key Growth Drivers

By Baptista Research

  • FYBR had a strong performance in Q4, achieving key milestones and demonstrating the effectiveness of their fiber-first strategy.
  • The company reported EBITDA growth for the first time in over a decade, marked by the company’s hard operational execution and sustainable strategy.
  • Furthermore, the company ended the year with 6.5 million fiber passings, representing 65% progress towards its target of building 10 million fiber locations, making it the largest pure-play fiber provider in the country.

Iridium Communications Inc.: Expanding Commercial Broadband Services To Enhance Top-Line Growth! – Major Drivers

By Baptista Research

  • Iridium Communications Inc.’s fourth-quarter 2023 earnings indicated strong performance with impressive service revenue and operational EBITDA. The company reported more than $300 million in pro-forma free cash flow for the full year, emphasizing growing cash flow as its primary narrative.
  • The satellite communications provider has generated about $1 billion in free cash flow since turning cash flow positive in late 2019 after completing its second-generation constellation.
  • 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.

Kyndryl Holdings: Focus on Customer Relations & Contract Changes! – Major Drivers

By Baptista Research

  • KD highlights several milestones on its Fiscal Third Quarter 2024 Earnings.
  • The company reported strong execution and accelerated progress as a leader in mission-critical IT infrastructure services.
  • Its strategy surrounds the creation of alliances, advanced delivery, account initiatives, KD Consult and KD Bridge, contributing to expectations of profitable growth and an increased full-year earnings outlook.

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Daily Brief TMT/Internet: Taiwan Semiconductor (TSMC), Shinko Electric Industries, Softbank Group, Mobvoi, Prosus NV, PAR Technology , Immersion Corporation, Wix.Com Ltd, Zhubajie Co Ltd and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?
  • Shinko Electric (6967 JP): Widening Spread Is an Opportunity
  • SoftBank (9984 JP): Arm Out-Stretched (On Valuation) And Is JPY Depreciation Largely Done?
  • Upcoming Mobvoi’s Debut: Downsized IPO Despite Hyper-Growth In AIGC Business Segment
  • TSMC (2330.TT; TSM.US): 2Q24F Sales in Line, 2024F Is Lowering the Growth Target Below 25% YoY
  • NPN X PRX: Discounts Widen as Fed Pivots on Rate Outlook
  • Greenhaven Road’s Scott Miller shares his thoughts on point of sale business, PAR Technologies $PAR
  • IMMR: New Investment and the Impact
  • Wix.com Ltd.: A Story Of Product Enhancements & Innovations Fueled by AI! – Major Drivers
  • Zhubajie Pre-IPO – Profitability Looks like a Long Shot


What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference?

By Andrew Lu

  • TSMC reiterates 2024 sales y/y growth of 20-25% but revises down 2024 global semiconductor y/y sales from over 10% to 10% and global foundry sales growth from 20% to 15-19%.
  • No more Moore’s Law: After 3 years ramp up gap between N5-N3, TSMC confirms 10-11 quarters of ramp up gap between N3 and N2 due to longer production cycle.
  • Driven by stronger digital consumer (33% q/q), HPC (3% q/q), IoT (5% q/q) sales but weaker smartphone IC (-16% q/q), TSMC reports 1Q24 sales decline of only 5% q/q.

Shinko Electric (6967 JP): Widening Spread Is an Opportunity

By Arun George

  • Shinko Electric Industries (6967 JP)‘s pre-conditional tender offer from the JIC alliance is JPY5,920 per share. The gross spread widened from a low of 3.1% on 14 March to 7.0%. 
  • The widening spread can be attributed to China SAMR approval timing, earnings risk, Ibiden Co Ltd (4062 JP)’s material underperformance lowering the break price and a large fund liquidating positions. 
  • The deal break risks remain low with the timing remaining the key risk. The current 7.0% spread is an attractive opportunity to add. 

SoftBank (9984 JP): Arm Out-Stretched (On Valuation) And Is JPY Depreciation Largely Done?

By Victor Galliano

  • Arm – which we estimate accounts for 45% of SoftBank group’s equity value – is experiencing limits to its “growth at any price” stock status; the shares fell 12% yesterday
  • The JPY’s depreciation is supportive of the group NAV, but with the Fed’s hawkish stance well known and BoJ expected to raise interest rates, JPY weakness may be largely done
  • SoftBank shares trade at a wide 53%+ discount to the estimated NAV; yet we see downside risks to Arm’s valuation, along with the potential for JPY weakness to reverse

Upcoming Mobvoi’s Debut: Downsized IPO Despite Hyper-Growth In AIGC Business Segment

By Andrei Zakharov

  • Mobvoi, an emerging AIGC market player in China, set terms for an IPO and plans to raise ~HK$330M (~$42M) in Hong Kong. CICC and CMB International are leading the offering.
  • The initial public offering is expected to be between HK$3.70 and HK$4.10. At the midpoint of the range, Mobvoi has a market value of ~HK$5.8B based on 1491.5M outstanding shares.
  • In my insight, I discuss valuation framework for comparable company analysis and outline revenue growth scenarios for each business segment under my base case.

TSMC (2330.TT; TSM.US): 2Q24F Sales in Line, 2024F Is Lowering the Growth Target Below 25% YoY

By Patrick Liao

  • Declaring a slower recovery for mature nodes was an outlier, indicating that Vanguard’s recovery progress might be slower. 
  • Apple’s iPhone is expected to be the focus for N2 production in 4Q15F.  
  • TSMC’s long-term gross margin is set at 53%, signifying a few key points. 

NPN X PRX: Discounts Widen as Fed Pivots on Rate Outlook

By Charlotte van Tiddens, CFA

  • The discounts of both Naspers and Prosus have widened during the last 5 trading sessions.
  • We see current levels as attractive entry points for trading the rump.
  • In our view, there are a number of fundamental factors that could act as positive catalysts to a further structural narrowing of the discount.

Greenhaven Road’s Scott Miller shares his thoughts on point of sale business, PAR Technologies $PAR

By Yet Another Value Podcast

  • Interview with Scott Miller, CIO at Greenhaven discussing Par technologies and recent developments
  • Par technologies is a stable point of sale software company focused on food services industry
  • Company has shown strong progress in organic growth and acquisitions, with potential for further upside in the stock market

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.


IMMR: New Investment and the Impact

By Hamed Khorsand

  • IMMR is using the gains from Q124 to make an investment in BNED. IMMR intends to invest $45 million to purchase new shares at $0.05 per share.
  • IMMR’s stock continues to trade at a slight premium to cash even though the operating business has continued to expand in auto
  • IMMR disclosed it ended the first quarter of 2024 with approximately $200 million in shareholder equity. This would equate to a sequential increase of approximately $17 million

Wix.com Ltd.: A Story Of Product Enhancements & Innovations Fueled by AI! – Major Drivers

By Baptista Research

  • Wix reported strong Q4 2023 earnings underpinned by its pivot to AI innovation.
  • 2023 was a year of significant progress for the firm as it demonstrated robust growth, reaching record profitability levels.
  • With the focus on AI, Wix introduced an array of AI-powered features that would help users create web content more efficiently, resulting in improved monetization and heightened user conversion rates.

Zhubajie Pre-IPO – Profitability Looks like a Long Shot

By Ethan Aw

  • Zhubajie Co Ltd (ZHUHKZ HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO.
  • Zhubajie (ZBJ) is a customized enterprise services e-commerce platform in China. The firm focuses on matching and facilitating the transactions between enterprise clients and service providers through its ZBJ platform.
  • In this note, we talk about the firm’s historical performance.

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Daily Brief TMT/Internet: Shinko Electric Industries, Hollysys Automation Technologies, Codan, Nexon, Cloudchain, Lumen Technologies, Pegasystems Inc, SolarEdge Technologies , Next 15 Group , Paychex Inc and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Shinko Electric (6967) – Break/Gap Risk Update
  • Hollysys (HOLI US): This Is A Buy
  • Quiddity Leaderboard ASX Jun 24: A Couple of Intra-Review Changes Likely
  • Nexon (TSE:3659) – Wednesday, Jan 17, 2024
  • Cloudchain Pre-IPO – The Negatives – But Still Not Convinced
  • Lumen Technologies: Its Digital Platform Is Harnessing Multibillion-Dollar Opportunity! – Major Drivers
  • Pegasystems Inc: Generative AI
  • SolarEdge Technologies Inc.: Expansion of Commercial Segment & Geographical Shift Changing The Game? – Major Drivers
  • Next 15 Group – Baked in AI opportunities
  • Paychex Inc.: Expanding Digital Capabilities & Macro Factors Influencing Its Growth! – Major Drivers


Shinko Electric (6967) – Break/Gap Risk Update

By Travis Lundy

  • When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider. 
  • 12wks ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco’d a buy. Then 5wks ago, reco’d trimming.
  • Shinko had outperformed Ibiden, and gross spreads had come in 5+% on JSR’s approval. Spreads are now 3% wider than their narrowest, but gap risk has widened as Shinko outperforms.

Hollysys (HOLI US): This Is A Buy

By David Blennerhassett

  • On the 8th February 2024, 85% of Hollysys Automation (HOLI US) shareholders present and via proxy, voted for Ascendent Capital’s Offer. After three-plus years, the end was finally in sight.
  • Then crickets. The merger was to complete in the 1Q. On the 15th April, HOLI released an accountant resignation notice. No word on dissenters or regulatory approvals. Shares sold off. 
  • The accountant resignation is a nothing burger. HOLI should lift their game and provide more transparency on the outstanding merger conditions. Still, the spread is attractive. This is a buy. 

Quiddity Leaderboard ASX Jun 24: A Couple of Intra-Review Changes Likely

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes for ASX 200, 100, 50, and 20 in the run-up to the June 2024 index rebal event.
  • There are up to two intra-review changes possible between now and the June 2024 review which could triggered by the Silver Lake (SLR AU) and Boral (BLD AU) deals.
  • Separately, I see one ASX 20 change and two ASX 100 changes for the regular rebalance in June 2024.

Nexon (TSE:3659) – Wednesday, Jan 17, 2024

By Value Investors Club

  • Nexon is a leader in the video game virtual worlds industry with an enterprise value of $11.4 billion
  • The company has consistently high EBIT margins and a robust portfolio of popular franchises that have generated billions in revenue
  • Despite being undervalued by the market compared to its peers, Nexon is poised for significant growth and offers potential for future success for investors

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.


Cloudchain Pre-IPO – The Negatives – But Still Not Convinced

By Ethan Aw

  • Cloudchain (CC CH) is looking to raise up to US$200m in its upcoming HK IPO. 
  • Cloudchain is an independent industry digital finance platform in China, serving anchor enterprises, chain-related enterprises, and financial institutions.
  • In this note, we will talk about the not-so-positive aspects of the deal.

Lumen Technologies: Its Digital Platform Is Harnessing Multibillion-Dollar Opportunity! – Major Drivers

By Baptista Research

  • Lumen Technologies’ Fourth Quarter 2023 Earnings revealed significant progress in the company’s business transformation.
  • Led by the efforts of the new executive team under CEO Kathleen Johnson, Lumen indicated that it had met its 2023 EBITDA and free cash flow guidance and had made material progress in its strategic priorities.
  • To strengthen its balance sheet, Lumen entered into an agreement with a majority of its creditors that extends most debt maturities to 2029.

Pegasystems Inc: Generative AI

By Baptista Research

  • Pegasystems Inc. has noted robust cash flow growth and value delivered to its clients in Q4 of 2023.
  • The company has adopted a new go-to-market strategy that has been received well by the team, leading to strong customer relationships.
  • The company has focused on AI utilization to introduce industry-changing technologies, which has resulted in increased growth and cash flow.

SolarEdge Technologies Inc.: Expansion of Commercial Segment & Geographical Shift Changing The Game? – Major Drivers

By Baptista Research

  • SolarEdge deemed its Q4 2023 and full-year results as clouded by adverse market dynamics and high inventory levels.
  • For Q4, SolarEdge reported revenues of about $316 million, split between $282 million in their solar business and $33 million in non-solar activities.
  • The company shipped 2.2 million power optimizers and 74,000 inverters during the quarter, along with 133-megawatt hours of batteries.

Next 15 Group – Baked in AI opportunities

By Edison Investment Research

Next 15 Group’s net revenues grew 2.5% in the year to January, despite difficult markets. Adjusted operating margin rose from 20.2% to 21.0%, helped by head office cost savings. In common with much of the sector, spending by tech clients was soft, down 17% like-for-like. The group did well, though, in growing spend from non-tech clients, up 11%, making for a strong overall performance in a market beset by ongoing macro uncertainty. Next 15 has been building its AI capabilities for some time and this is now starting to show in efficiency and margin. It has the balance sheet strength to keep investing here, internally and through M&A, which should stand it in good stead as client confidence improves.


Paychex Inc.: Expanding Digital Capabilities & Macro Factors Influencing Its Growth! – Major Drivers

By Baptista Research

  • Paychex, in its third quarter, reported a total revenue growth of 4%, which was dampened by a lower contribution from its Employee Retention Tax Credit (ERTC) service, compared to the previous year.
  • However, the company stated that by eliminating this impact, the total revenue grew by 7% during the quarter.
  • Factors such as the winding down of the ERTC program, moderated employment growth within Paychex’s client base, and marginally lower realized rates resulted in stronger headwinds during this quarter than the company had anticipated.

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Daily Brief TMT/Internet: Kokusai Electric , HPSP, Hollysys Automation Technologies, Wipro Ltd, Taiwan Semiconductor (TSMC) – ADR, Megastudyedu Co, Ltd., Cainiao Smart Logistics Network, Novatek Microelectronics Corp, DXC Technology Co, IAC and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Kokusai Elec (6525) – The Much-Anticipated Lockup Expiry
  • Market Chats About What Really Went Down with HPSP This Morning
  • Hollysys (HOLI US): Keep Calm as Closing Date Slips
  • Quiddity Leaderboard BSE/​​​​SENSEX Jun 24: Jio Financial Addition Creates New Possibilities
  • Taiwan Tech Weekly: Apple Suppliers Slump on IPhone; PC Volumes Back to Growth; TSMC & ASML Results
  • Megastudy Education: A Major Shareholder Return Policy in 2024-2026
  • Cancelling CaiNiao’s IPO: What It Means for China’s Express Sector (+Comment on Implied Valuation)
  • Novatek (3034.TT): 2Q24F Keeps Growing, and 3Q24F Shall Grow Significantly.
  • DXC Technology Company: Will Its Enhanced Go-to-Market Strategy and Business Execution Catalyze Growth? – Major Drivers
  • IAC/ InterActiveCorp: Is The Improved User Experience and Premium Traffic Growth Here To Stay? – Major Drivers


Kokusai Elec (6525) – The Much-Anticipated Lockup Expiry

By Travis Lundy

  • Last autumn, Kokusai Electric (6525 JP) was IPOed by KKR. The lockup expires next week, on 21 April 2024 (a Sunday). That frees up about 70% of the stock.
  • KKR’s own stake is worth about US$2.8bn. It is not clear that Applied Materials, Qatar, or the Koch Strategic Platforms stakes would be for sale (now, or near-term).
  • There is an interesting schedule of events between here and a likely offering date. It pays to pay attention to the details. 

Market Chats About What Really Went Down with HPSP This Morning

By Sanghyun Park

  • This morning’s HPSP (403870 KS) situation began with Maekyung’s report, indicating Crescendo PE contacted local bankers for the controlling stake sale.
  • The surge in HPSP’s stock price after Maekyung’s report suggests Crescendo PE’s tacit approval, implying their involvement in the news’s emergence.
  • Despite the likely confirmed sale of Crescendo PE’s stake, timing remains uncertain due to disclosure rules. Continued monitoring is vital, considering potential market reactions later.

Hollysys (HOLI US): Keep Calm as Closing Date Slips

By Arun George

  • On 15 April, Hollysys Automation Technologies (HOLI US) issued a 6-K filing stating that Ascendent remains in the process of obtaining regulatory approvals. 
  • The gross spread has widened to 8% as the closing date has slipped from the end of March guidance, and an updated timeline is lacking. 
  • A delay in securing regulatory approvals is not uncommon. However, regulatory approvals should be forthcoming as the transaction involves Chinese entities (including a SASAC entity) acquiring a Chinese-focused company. 

Quiddity Leaderboard BSE/​​​​SENSEX Jun 24: Jio Financial Addition Creates New Possibilities

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the June 2024 index rebal event.
  • Wipro Ltd (WPRO IN)‘s deletion from Sensex is imminent but there are question marks over the top replacement names as this involves some subjectivity.  
  • For BSE 100, Jio Financial Services (JIOFIN IN) is a new potential ADD and that has caused major changes to the index change expectations I had previously.

Taiwan Tech Weekly: Apple Suppliers Slump on IPhone; PC Volumes Back to Growth; TSMC & ASML Results

By Vincent Fernando, CFA

  • Apple supply chain names are falling due concerns about weak iPhone shipments. Global PC shipments returned to growth as per IDC data.
  • TSMC and ASML results this week and will be cruical for the market. Can TSMC rally again to achieve new highs or will it continue trading lower?
  • Nanya Technology sees DRAM Industry pricing rising through 2024E; but is underperforming financially.

Megastudy Education: A Major Shareholder Return Policy in 2024-2026

By Douglas Kim

  • On 16 April, Megastudyedu Co, Ltd. (215200 KS) announced a major shareholder return plan, driving up its share price by 14.2% to 60,400 won. 
  • Driven by this attractive shareholder return plan combined with improving fundamentals, we believe that Megastudy Education’s shares could continue to outperform the market in the next several months. 
  • The total shareholder returns including share buybacks/cancellation and dividends are 60% of the company’s non-consolidated net profit from 2024 to 2026.

Cancelling CaiNiao’s IPO: What It Means for China’s Express Sector (+Comment on Implied Valuation)

By Daniel Hellberg

  • A few weeks ago, Alibaba announced it would not seek IPO for CaiNiao
  • The change of plans could force BABA/CaiNiao to re-focus on profitability
  • BABA will reportedly buy rest of CaiNiao at US$10.2 bn valuation — cheap!

Novatek (3034.TT): 2Q24F Keeps Growing, and 3Q24F Shall Grow Significantly.

By Patrick Liao


DXC Technology Company: Will Its Enhanced Go-to-Market Strategy and Business Execution Catalyze Growth? – Major Drivers

By Baptista Research

  • During Q3, DXC Technology was observed to have solid performance with the company’s organic revenue growth falling within the guidance range.
  • The free cash flow saw an increase of 26% compared to the prior year, amounting to an impressive $585 million.
  • However, the report points to declines in various areas such as organic revenue growth, a 4.5% year-over-year decrease, mainly due to the decline in resale revenues.

IAC/ InterActiveCorp: Is The Improved User Experience and Premium Traffic Growth Here To Stay? – Major Drivers

By Baptista Research

  • InterActiveCorp (IAC) has undergone changes throughout 2023 that resulted in substantial earnings growth in the fourth quarter, which is an encouraging indication of the company’s overall strategic direction.
  • Among the company’s accomplishments are a solid level of service professional retention, better targeting of service professionals, and improvements in its paid marketing, resulting in higher margins.
  • Notably, IAC’s European segment showed strong growth, demonstrating the effectiveness of its strategies when applied in different markets.

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Daily Brief TMT/Internet: Rorze Corp, Horizon Robotics, LTIMindtree, Activision Blizzard, Sea , Kokusai Electric , Travelsky Technology Ltd H, 5G Networks Ltd/Australia, Douyu International Holdings and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Rorze (6323) | Outperforming Expectations Despite 200% Share Price Rally
  • Horizon Robotics IPO Preview: “Journey Together”, Strong Business Position and Market Share Gains
  • Quiddity Leaderboard NIFTY Sep 24: Multiple Names Eligible for NIFTY 50 Addition
  • China Consumption Weekly (15Apr2024): NetEase, Activision Blizzard, Li Auto, Alibaba, Feihe, Uniqlo
  • Sea Limited (SE) – Friday, Jan 12, 2024
  • Kokusai Electric IPO Lock-Up – KKR Will Be Tempted by the US$2.7bn Release but Might Have to Wait
  • Travelsky (696 HK | HOLD | TP:HKD9.92): Domestic Travel Will Support Growth
  • 5G Networks Limited (5GN) – Sunday, Jan 14, 2024
  • Douyu Intl Hldings Ltd -Adr (DOYU) – Sunday, Jan 14, 2024


Rorze (6323) | Outperforming Expectations Despite 200% Share Price Rally

By Mark Chadwick

  • Rorze exceeds expectations in FY2/24 with a 6% revenue beat and an 11% surpass in operating profit, setting a record-high revenue of 28 billion yen in 4Q FY2/24.
  • FY2/25 revenue guidance of 120 billion yen marks a 12% beat against analyst estimates, with operating profit expected to hit 32 billion yen, outperforming expectations by 10%.
  • Rorze’s stock, though no longer deeply undervalued, remains reasonably priced at 16.5x NTM EBIT, indicating strong potential for earnings growth-driven future upside.

Horizon Robotics IPO Preview: “Journey Together”, Strong Business Position and Market Share Gains

By Andrei Zakharov

  • Horizon Robotics, a consumer-centric and fast-growing provider of integrated ADAS and AD solutions for passenger vehicles, filed for an IPO and plans to raise up to $500M in Hong Kong.
  • Horizon Robotics was founded in 2015 by Dr. Yu Kai, Dr. Chang Huang, Ms. Feiwen Tao, and a group of scientists and tech entrepreneurs. 
  • I have a positive view of an upcoming IPO and believe Horizon Robotics is in a great position to capitalize on rapidly growing smart vehicles market in China and worldwide.

Quiddity Leaderboard NIFTY Sep 24: Multiple Names Eligible for NIFTY 50 Addition

By Janaghan Jeyakumar, CFA

  • NIFTY 50 represents the 50 largest stocks listed in the National Stock Exchange (NSE) of India and the NIFTY Next 50 index tracks the next 50 largest names.
  • In this insight, we take a look at the names leading the race to become ADDs/DELs for the NIFTY 50 and NIFTY Next 50 indices in the September 2024 rebalance.
  • There could be at least one change for NIFTY 50 and separately, there could be up to five changes for NIFTY Next 50.

China Consumption Weekly (15Apr2024): NetEase, Activision Blizzard, Li Auto, Alibaba, Feihe, Uniqlo

By Ming Lu

  • NetEase will be Activision Blizzard’s agency in China again after a divorce more than a year ago.
  • Alibaba’s cloud service plans to reduce its overseas price offers by 23% on average.
  • Infant formula companies, such as Feihe and Ausnutria, suffered from revenue shrinkage in 2023.

Sea Limited (SE) – Friday, Jan 12, 2024

By Value Investors Club

  • Sea Limited is a gaming and e-commerce company in Southeast Asia that has experienced fluctuations in its stock price but has strong underlying business performance.
  • Founded in 2009 as Garena by CEO Forrest Li, the company rebranded to Sea Ltd in 2017 and gained access to a wide range of games through Tencent’s investment in 2010.
  • After achieving profitability in 2023, Sea Ltd is now focused on accelerating growth and drawing comparisons to Amazon’s early years.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.


Kokusai Electric IPO Lock-Up – KKR Will Be Tempted by the US$2.7bn Release but Might Have to Wait

By Sumeet Singh

  • KKR raised around US$730m via selling some stake in Kokusai Electric (6525 JP) Japan IPO in Sep 2023. Its remaining stake will be released from its IPO linked lockup soon.
  • KE main business activities consist of the manufacturing, sales and maintenance service of semiconductor manufacturing equipment.
  • In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.

Travelsky (696 HK | HOLD | TP:HKD9.92): Domestic Travel Will Support Growth

By Mohshin Aziz

  • Travelsky Technology Ltd H (696 HK) Jan-Feb operational data strong, volume processed by domestic +45% YoY and international by +52% YoY; much higher than the consensus 2024 forecast of 15%  
  • Traffic among the Big 3 Chinese airlines was up 46% YoY (-9% MoM) in March to +8% vs 2019. Domestic traffic rose 19% YoY (-11% MoM) to +24% vs 2019
  • TP of HKD9.92 (+8% UPSIDE) is based on 2024 PE 14.8x (1SD below mean). The upside is uncompelling, but we advocate a HOLD as traffic growth is stronger than consensus   

5G Networks Limited (5GN) – Sunday, Jan 14, 2024

By Value Investors Club

  • 5GN sold hosting business and 2/3 of domains business, resulting in over $100 million net gain
  • Company left with $84 million in cash after full debt repayment and transaction costs
  • Expected to generate $5 million in net income post-sale, plans to use cash for acquisitions, share buyback, and dividend, stock expected to rerate positively if targets met.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.


Douyu Intl Hldings Ltd -Adr (DOYU) – Sunday, Jan 14, 2024

By Value Investors Club

  • Douyu, a Chinese gaming livestreaming platform with Tencent as a major stakeholder, is facing challenges from competition and a stagnant market growth.
  • The company has cut costs and is now operating at breakeven, with a significant amount of cash in US dollars available for distribution or capital allocation.
  • Despite the risks associated with the stock and sector, Douyu presents a potentially attractive investment opportunity as its stock is trading at only 28% of its net cash value.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.


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Daily Brief TMT/Internet: Money Forward , BOE Technology Group , Nanya Technology, Vodafone Idea and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Money Forward (3994) | Net Sales +40%
  • Mainland Connect NORTHBOUND Flows (To 12 Apr 2024): NB A Net Seller; Flows See Semi/Tech Buys
  • Nanya Technology Sees DRAM Industry Pricing Rising Through 2024E; But Is Underperforming Financially
  • Vodafone Idea Placement – Very Well Flagged but Its Not Going to Fix a Whole Lot of Issues


Money Forward (3994) | Net Sales +40%

By Mark Chadwick

  • Money Forward reported Q1 results. Net sales rose 40% YoY to 9.5 billion yen
  • Money Forward saw a big jump in profitability, which puts the company on track to meet full year guidance
  • The stock has risen around 30% since January. We still see around 7% upside to our target valuation 

Mainland Connect NORTHBOUND Flows (To 12 Apr 2024): NB A Net Seller; Flows See Semi/Tech Buys

By Travis Lundy

  • The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
  • Last week saw NORTHBOUND net SELL RMB 11.5bn of A-shares on low-ish volume. A-shares underperformed H-shares quite dramatically, giving back gains from two weeks ago.
  • This week saw considerable net buying of semiconductor technology names. I expect that to continue.

Nanya Technology Sees DRAM Industry Pricing Rising Through 2024E; But Is Underperforming Financially

By Vincent Fernando, CFA

  • Latest Nanya Tech results showed weak margin rebound. Gross margin rebounded but remained below zero.
  • Nanya expects DRAM pricing improvement through 2024E; due to demand for AI related memory products reducing capacity for other DRAM products rather than improvement for Nanya’s main Consumer segment.
  • Micron is reportedly increasing prices post Taiwan earthquake and this is positive, but we see Nanya’s 2024E consensus margin expectations set at a high bar and the stock isn’t cheap.

Vodafone Idea Placement – Very Well Flagged but Its Not Going to Fix a Whole Lot of Issues

By Sumeet Singh

  • Vodafone Idea (IDEA IN) plans to raise around US$2.2bn via a follow-on public offering.
  • The deal has been in the works for years and proceeds will be used for capex and short-term debt repayment.
  • In this note, we will run the deal through our ECM framework and talk about the deal dynamics.

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Daily Brief TMT/Internet: Roland DG Corp, Ansarada Group Ltd, Nanya Technology and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Roland DG (6789) – Brother Still Not Making Friends
  • Ansarada (AND AU): Scheme Vote on 14 June
  • Nanya. Tailwinds Mount Albeit Profits Still Elude


Roland DG (6789) – Brother Still Not Making Friends

By Travis Lundy

  • Taiyo Pacific’s Tender Offer for Roland DG Corp (6789 JP) was to end Friday, but it was extended 10 days. 
  • Roland DG provided an update regarding the status of the Brother overbid. It did not show as much strategic-mindedness as it might have.
  • Shares are now trading at a post-overbid high. Strategic missteps up the risk but Brother can pay more.

Ansarada (AND AU): Scheme Vote on 14 June

By Arun George

  • The Ansarada Group Ltd (AND AU) IE considers Datasite’s A$2.50 scheme offer fair and reasonable. However, the inter-conditional carve-out transaction is NOT fair but reasonable. 
  • ACCC clearance (findings on 6 June) is a prerequisite for FIRB approval (scheme condition). As Datasite has a limited Australian presence, ACCC approval should be forthcoming. 
  • The offer is attractive, with no vocal shareholder opposition. At the last close and for the 1 July payment, the gross/annualised spread was 2.5%/12.2%.

Nanya. Tailwinds Mount Albeit Profits Still Elude

By William Keating

  • Nanya’s quarterly revenue was NT$ 9.5 billion, up 9.2% QoQ & up 47.9% YoY
  • Nanya still had a net loss of NT$1.2 billion, its sixth loss making quarter in a row
  • Larger peers doubling down on HBM, structural reduction in memory wafer capacity & shortages likely triggered by Taiwan earthquake are all mounting tailwinds for Nanya

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Daily Brief TMT/Internet: Bharti Hexacom, ICTK and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Bharti Hexacom IPO Trading – Strong Insti and Anchor, Retail Gave It a Miss
  • ICTK IPO Valuation Analysis


Bharti Hexacom IPO Trading – Strong Insti and Anchor, Retail Gave It a Miss

By Sumeet Singh

  • Government of India raised around US$513m via selling some of its stake in Bharti Hexacom’s IPO.
  • Bharti Hexacom (BH) is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers in the Rajasthan and the North East telecommunication circles in India.
  • We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

ICTK IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of ICTK is target price of 28,694 won, which is 79% higher than the high end of the IPO price range. 
  • Our base case valuation is based on P/S multiple of 20.8x using our estimated sales of 18.1 billion won in 2025. 
  • ICTK’s operating margin improved from -129.9% in 2022 to -38.2% in 2023. We estimate its operating margin to improve further to -12.4% in 2024 and 17.7% in 2025.

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