TMT/Internet

The IE considers Thoma Bravo’s A$2.10 offer fair and reasonable as it is within its valuation range of A$1.94 to A$2.45 per share (but the below the midpoint of A$2.20).
The spread has risen due to suggestions that some investors aim to block the scheme. These investors aim for a bump but will likely settle for the offer if unsuccessful.
At Nearmap Ltd (NEA AU)‘s last close price and for the 15 December payment, the gross and annualised spread is 5.8% and 44.5%, respectively.

Nearmap (NEA AU): 25 Nov Scheme Meeting. IE Says Fair & Reasonable

On the 15 August, mapping technology outfit Nearmap Ltd (NEA AU) unanimously backed Thoma Bravo’s A$2.10/share Offer by way of a Scheme of Arrangement.
The Scheme Booklet has now been lodged with ASIC. The Independent Expert reckons the Offer is fair and reasonable.
The Scheme Meeting will be held on the 25 November, as previously flagged in August’s SID, with an expected implementation on the 15 December.

FDR’s Trade Embargo on Oil (Japan) & Biden’s Sanctions on China’s Semi Sector – Prelude to Disaster?

By Douglas Kim

In the past couple of weeks, there have been tremendous sanctions by the US government on China’s semiconductor sector.
In this insight, we compare this move to the US government putting a trade embargo on oil against Japan nearly 81 years ago.
If there are severe disruptions to the semiconductor market in China, this will likely to have negative impact on the two Korean semi giants Samsung Electronics and SK Hynix.

Akamai Technologies: Malware Protection For APIs and Apps

After a steady correction over the past few months, Akamai’s stock has been appreciating steadily with its results being a few days away.
Akamai has been leveraging its financial strength to make substantial investments in cloud computing and financial strength.
The company’s security portfolio of zero trust enterprise has been performing well with several significant customer wins.

Accenture plc: Acquisition of MacGregor Partners & Other Drivers

Accenture delivered a good performance in its last result surpassing Wall Street expectations in terms of revenues as well as earnings.
The company’s revenues grew in local currency which was driven by double-digit growth across all industries, services, and markets.
The cloud business of Accenture performed well, with Cloud First being one of the big drivers of growth.

ZoomInfo Technologies Inc: ZoomInfo Labs Launch & Other Drivers

With its next set of results around the corner, ZoomInfo Technologies definitely has a lot to look forward to.
The company’s stock has remained stable in an otherwise bearish environment for the technology industry.
We provide the stock of ZoomInfo with a ‘Buy’ rating with a revision in the target price.

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Oct 22

Daily Brief TMT/Internet: Jasmine International PCL, Meituan, Blibli, Tencent, Bumble and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Jasmine International: Last Minute Wrinkle To Broadband Sale
Meituan – What to Look for in 3Q22 Result?
Blibli IPO: Valuation Insights
Shanghai/Shenzhen Southbound Connect: Weekly Moves (21 October 2022)
Bumble Inc.: New Feature Additions & Other Developments

Jasmine International: Last Minute Wrinkle To Broadband Sale

Jasmine International (JAS TB) is looking to sell its 99.8% interest in Triple T Broadband (TTTBB), and 19% stake in Jasmine Broadband (JASIF TB) to Advanced Info Service (ADVANC TB).
The sale required JASIF shareholder approval, but not all resolutions were approved at an EGM this week.
This is a setback. However, the transaction remains on track.

Meituan – What to Look for in 3Q22 Result?

By Xin Yu, CFA

Key areas to pay attention in 3Q22: 1) Meituan Instashopping’s growth rate, 2) Meituan Select’s unit economics,
3) 4Q guidance for food delivery and in-store, hotel and travel recovery.
Valuation is entering an attractive territory with recent stock price correction.

Blibli IPO: Valuation Insights

Blibli (1437710D IJ), a leading Indonesian e-commerce player, has launched an IDR8.2 trillion (US$530 million) Indonesian IPO. Bookbuilding is from 17 to 24 October.
We have previously discussed the IPO in Blibli IPO: The Bull Case, Blibli IPO: The Bear Case and Blibli Vs Tokopedia Vs Bukalapak Vs Lazada Vs Shopee.
Our valuation analysis suggests that the IPO price range is unattractive. We would give the IPO a pass.

Shanghai/Shenzhen Southbound Connect: Weekly Moves (21 October 2022)

Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
Overall, the net inflow over the past week was ~US$2.7bn, split (+US$1.38bn) for Shanghai and (+US$1.36bn) for Shenzhen.
The largest inflows were into Tencent (700 HK) and Wuxi (2269 HK). The largest outflows Tracker Fund of Hong Kong (2800 HK) and Hang Seng H Share Index (2828 HK).

Bumble Inc.: New Feature Additions & Other Developments

Bumble delivered a mixed set of results for the past quarter surpassing Wall Street expectations on the revenue front but missing out on earinings.
The Bumble app continued to grow as the company performed well in traditional as well as international growth markets.
In the quarter, Bumble brought a wide portfolio of discovery-oriented products to the market.

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Oct 19

Daily Brief TMT/Internet: Tyro Payments, Blibli, HYBE, Softbank Group, Viavi Solutions, CloudFlare , Arlo Technologies Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Tyro Payments In Talks With Westpac
PT Global Digital Trade (BliBli) Pre-IPO – The Positives – Wide Offering, Strong COVID Bounce Back
Netmarble Debt Risk Victim: HYBE or NCsoft or Both?
Softbank Group – The Most Important Number in Q2 Results May Be ARM Royalty Revenue
Blibli IPO: The Bear Case
Blibli IPO – Indonesia E-Commerce Is Struggling, Blibli Even More So
Tyro Confirms Westpac as One of the Interested Suitors
Viavi Solutions Inc.: The Jackson Labs Acquisition & Other Drivers
Cloudflare Inc: Launch of CAPTCHA Substitute & Other Developments
ARLO: Disconnected to Ongoing Growth

Tyro Payments In Talks With Westpac

Back on the 8 September, payment provider Tyro Payments (TYR AU) rejected a proposal from a Potentia-led consortium at A$1.27/share, by way of a Scheme.
Tyro has now announced it has received approaches from several parties, including Westpac (WBC AU). “None of these approaches are sufficiently definite … to warrant further disclosure at this time“.
Shares are currently trading at A$1.59/share. Tyro recently raised its FY23 EBITDA guidance to A$28mn-34mn, up from A$23mn-29mn.

PT Global Digital Trade (BliBli) Pre-IPO – The Positives – Wide Offering, Strong COVID Bounce Back

PT Global Digital Trade (1437710D IJ) (BliBli) aims to raise up to US$530m in its Indonesian IPO.
BliBli provides e-commerce services across Indonesia to both retail consumers and institutions
In this note, we’ll talk about the positive aspects of the deal.

Netmarble Debt Risk Victim: HYBE or NCsoft or Both?

By Sanghyun Park

Netmarble did a one-year rollover for the stock loan used for the SpinX acquisition. The maturity is again one year, and the principal amount is ₩1.5T.
The HYBE stake is newly included as collateral at an estimated LTV ratio of 50% because the value of NCsoft’s stake further declined, and the LTV ratio was subsequently lowered.
Applying the 140% loss cut ratio to HYBE and NCsoft will lead to a margin call when each stock declines 30% from the current price.

Softbank Group – The Most Important Number in Q2 Results May Be ARM Royalty Revenue

By Kirk Boodry

We’ve been pessimistic on prospects for ARM and recent news flow and share price performance hasn’t helped but a decent report from TSMC eases some of our concerns
Softbank needs high teens royalty revenue growth for ARM and TSMC as a bellwether (+30% for Q3 and Q4 guidance) is better than AMD or Nvidia
We remain more conservative on valuation ($37bn) than Softbank assuming high single-digit growth and c. 43% EBITDA margins

Blibli IPO: The Bear Case

Blibli (1437710D IJ), a leading Indonesian e-commerce player, has launched an IDR8.2 trillion (US$530 million) Indonesian IPO. Bookbuilding is from 17 to 24 October.
In Blibli IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The key elements of the bear case rest on weak sector sentiment, an unclear path to profitability, and credible long-term funding to support the high cash burn.

Blibli IPO – Indonesia E-Commerce Is Struggling, Blibli Even More So

By Oshadhi Kumarasiri

Blibli (1437710D IJ), one of Indonesia’s leading e-commerce platforms is looking to raise around $470-530m via an IPO on Indonesia Stock Exchange.
Looking at Shopee’s struggles in the past year and Bukalapak’s rapid fall following the IPO, we think investors are unlikely to be interested in the Blibli IPO.
This could mean that Blibli’s days are numbered as it is resting all hopes on the IPO to fund its short-term loan repayment obligations.

Tyro Confirms Westpac as One of the Interested Suitors

Tyro Payments (TYR AU) confirmed that it has “received approaches from several parties expressing interest in a potential change of control transaction, including Westpac Banking (WBC AU).”
Tyro previously rejected a A$1.27 offer from the Potentia consortium. Grok’s get-out clause with Potentia sets the floor price of a competing bid at A$1.52 per share.
The last close of A$1.59 is higher than the floor price. Triangulating the value of a rival bid across several data points suggests a competing offer of around A$2.

Viavi Solutions Inc.: The Jackson Labs Acquisition & Other Drivers

Viavi had a strong performance in the final quarter of its fiscal year 2022 and the company delivered an all-around beat.
For fiscal Q4 2022, the SE business’s revenue was constant from year to year.
Strong NE bookings during the fiscal fourth quarter led to a seasonally stronger Q1 backlog and demand visibility.

Cloudflare Inc: Launch of CAPTCHA Substitute & Other Developments

Despite the heightened economic unpredictability, Cloudflare had a good quarter and managed to deliver an all-around beat.
The company generated $234 million in sales in Q2, up 54% from the same period last year.
They now have 1,749 customers that pay them more than $100,000 annually after recently adding 212 additional large customers.

ARLO: Disconnected to Ongoing Growth

By Hamed Khorsand

ARLO has the help of a product purchase agreement to smooth out lumpiness in consumer spending in the current macroenvironment
While ARLO is targeting a higher income consumer with products that are priced higher than competition, there is still a risk that could have played out in September.
Number of paid subscribers should continue to rise in the third quarter with possibility it could be materially higher than our forecast

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Oct 18

Daily Brief TMT/Internet: Blibli, HYBE, Money Forward, ROBLOX Corp, Hon Hai Precision Industry, Bitcoin and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Blibli IPO: Offering Details & Index Inclusion
Blibli IPO: The Bull Case
HYBE: Korean Govt Mandates BTS Members to Enlist in Military – 50% Further Downside Risk Ahead
Money Forward – Q3 22 Results Reaction: Revenue Is Growing but so Are EBITDA Losses
Money Forward (3994) | Major Improvement in Corporate Client Acquisition
Money Forward: Top Line Beats Consensus but Losses Widen Further
Why Roblox’s September Metrics Are Even Better Than They Appear
Taiwan Tech Weekly: Hon Hai Tech Day Today, Apple Drops China Supplier; Shows Severity of New Rules
Bitcoin Volatility Matches Nasdaq

Blibli IPO: Offering Details & Index Inclusion

By Brian Freitas

Blibli (1437710D IJ) is offering 17.77bn shares in its IPO at a price range of IDR 410-460/share. That could raise up to US$530m and value the company up to US$3.64bn.
The stock will not get Fast Entry to the IDX30, LQ45, MSCI and FTSE indices, so no near-term support from passive buying.
The stock could make it into the MSCI Small Cap Index in February and the FTSE All-World/All-Cap Index in June. Earliest inclusion in IDX30/IDX80/LQ45 indices could be in July.

Blibli IPO: The Bull Case

By Shifara Samsudeen, ACMA, CGMA

Blibli (1437710D IJ), a leading Indonesian e-commerce player, has launched an IDR8.2 trillion (US$530 million) Indonesian IPO. Bookbuilding is from 17 to 24 October.
According to Frost & Sullivan, Blibli.com was No. 1 in the fresh food category and 1P consumer electronics in the B2C omnichannel among e-commerce players in Indonesia in 2021.
The key elements of the bull case rest on a large and growing addressable market, strong ecosystem, high order values, rising cohort spending and fast-paced growth.

HYBE: Korean Govt Mandates BTS Members to Enlist in Military – 50% Further Downside Risk Ahead

By Douglas Kim

On 17 October, the Korean government made a final official decision to have the BTS members serve in the mandatory military service.
We believe this will have a major negative impact on the sales and profits of HYBE in the next several years.
As a result of the Korean government formalizing the BTS members to enlist in the military, we believe that HYBE’s share price could fall more than 50% from current levels.

Money Forward – Q3 22 Results Reaction: Revenue Is Growing but so Are EBITDA Losses

By Kirk Boodry

Revenue growth rebounded in Q4 and was the best in six quarters as corporate sales accelerated, particularly in the medium business segment
But EBITDA losses accelerated and whilst management says this is the peak quarter, this is the first time since 2019 that EBITDA excluding advertising costs was negative
Guidance for Q4 is mixed with a conservative revenue target and a only a modest reduction in EBITDA losses

Money Forward (3994) | Major Improvement in Corporate Client Acquisition

By Mark Chadwick

Money Forward Q3 sales rose +42% YoY to Y5.5bn driven by corporate ARR (+54% YoY)
Net sales, ARR, and EBITDA loss of -Y1.9bn all in line with company guidance
Growth investment starting to pay off as Corporate Client acquisition rate DOUBLES

Money Forward: Top Line Beats Consensus but Losses Widen Further

Money Forward reported 3QFY11/2022 results. Revenue increased 42.2% YoY to JPY5.45bn (vs consensus JPY5.40bn) while adjusted op.losses further widened to JPY2.5bn vs JPY449m in the same period a year ago.
Though top line growth has resumed following a slowdown in 2QFY11/2022, MF’s margins have further worsened with increased investment in advertising, staff and subsidies.
MF’s share price fell almost 8% following earnings announcement as investors are concerned over deteriorating profitability.

Why Roblox’s September Metrics Are Even Better Than They Appear

By Aaron Gabin

Roblox is proving out management’s assertion that bookings growth would reaccelerate in the back half of the year.
The company extended its average user life from 25 to 28 months. Signal of falling churn.
Roblox usage continues to dwarf all other social media; DAUs spend 2.5x more time per day than TikTok or Instagram users.

Taiwan Tech Weekly: Hon Hai Tech Day Today, Apple Drops China Supplier; Shows Severity of New Rules

Major milestones for Hon Hai’s EV platform could be unveiled at today’s Hon Hai Tech Day.
Apple’s dropping of a key China supplier shows how international players may want to just avoid even non-restricted products from China.
Senior semiconductor executives across the industry are halting work for China-based firms, including some leading Chinese execs.

Bitcoin Volatility Matches Nasdaq

By Kaiko

Price Movements: Bitcoin falls to its lowest level since 2020 following hot U.S. inflation print but stages modest recovery after.
Market Liquidity: Coinbase regains dominant BTC-USD market share.
Derivatives: Open interest on Binance plummets following dramatic price moves.

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Oct 16

Daily Brief TMT/Internet: Socionext, Nanya Technology, Kakao Games Corp and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Index Rebalance & ETF Flow Recap: CSI500, SSE180, KOSPI2, Sensex, MSCI IN/KR, TW Div+, Socionext
Nanya Tech: Another Example of Capex Reduction, Major Share Price Divergence
ECM Weekly (16th Oct 2022) – Socionext, Betagro, Lionheart, Five-Star, Giant Biogene, GLP J-REIT

Index Rebalance & ETF Flow Recap: CSI500, SSE180, KOSPI2, Sensex, MSCI IN/KR, TW Div+, Socionext

By Brian Freitas

The review period for the MSCI November SAIR starts this week and will run till 31 October. We also near the end of the review period for many local indices.
AIPL has announced a S&P BSE SENSEX Index market consultation while FTSE has announced the result of the FTSE TWSE Taiwan Dividend+ Index market consultation.
There were big weekly inflows to ETFs that track China, Taiwan, Korea and Hong Kong equities.

Nanya Tech: Another Example of Capex Reduction, Major Share Price Divergence

Nanya Technology recently reported 3Q22 results and its gross margin fell substantially, but this appears mostly digested into consensus estimates.
The company also announced a major reduction in capex, which highlights the latest industry trend whereby supply/demand imbalances are being addressed by reduced capacity expansion.
Nanya Technology has outperformed the TAIEX Semi Index by ~27% in less than three weeks.

ECM Weekly (16th Oct 2022) – Socionext, Betagro, Lionheart, Five-Star, Giant Biogene, GLP J-REIT

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
On the IPO front, Socionext (6526 JP) provided a welcome respite with a positive listing, while South Korean IPOs continued to struggle.
There was only one large placement this week, with GLP J-REIT (3281 JP) deciding to brave the markets.

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Oct 15

Daily Brief TMT/Internet: Taiwan Semiconductor (TSMC), Semiconductor Manufacturing International Corp (SMIC), SS&C Technologies and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Intel Vs. TSMC/UMC Long/Short Monitor: Mgmt Call Takeaways, Calculating a Normalized Valuation
Shanghai/Shenzhen Southbound Connect: Weekly Moves (14 October 2022)
SS&C Technologies Holdings Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report
SS&C Technologies Holdings Inc.: Initiation of Coverage – Competitive Positioning

Intel Vs. TSMC/UMC Long/Short Monitor: Mgmt Call Takeaways, Calculating a Normalized Valuation

TSMC says limited impact from U.S. China restrictions — We crosscheck the comments.
TSMC guidance was strong and gives hope for 1H23 industry improvement. Looks cheap on a cycle-adjusted PE.
Intel has outperformed TSMC shares despite the recent TSMC rebound.

Shanghai/Shenzhen Southbound Connect: Weekly Moves (14 October 2022)

Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
Overall, the net inflow over the past week was ~US$0.5bn, split (+US$0.26bn) for Shanghai and (+US$0.24bn) for Shenzhen.
The largest inflows were into Tracker Fund of Hong Kong Ltd (2800 HK) and Tencent (700 HK). The largest outflows were in Meituan (3690 HK) and Semiconductor Manufacturing International (981 HK).

SS&C Technologies Holdings Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report

SS&C Technologies is a major software solutions provider to the financial and healthcare industries.
Even while new fund launches and inflows influenced the Alternatives industry, it nevertheless developed well.
In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

SS&C Technologies Holdings Inc.: Initiation of Coverage – Competitive Positioning

This is our first report on SS&C Technologies, a well-known software solutions provider to the financial and healthcare industries.
Even while new fund launches and inflows influenced the Alternatives industry, it nevertheless developed well.
We initiate coverage on the stock of SS&C Technologies with a ‘Buy’ rating.

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Oct 14

Daily Brief TMT/Internet: Sea Ltd, Elmo Software, Lionheart Studio, Tata Elxsi Ltd, ByteDance, Kaynes Technology India, BYJU’S, Gartner Inc, Luwjistik and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Sea Ltd – No Bringing Back to Life For Free Fire, Shopee’s Top Line Growth Could Disappear
Elmo Software Confirms Takeover Interest from Various Parties
ELMO Software (ELO AU): KKR Returns To The Well
Lionheart Studio IPO: Still Same Inflated Valuation
S&P BSE/Sensex Quiddity Leaderboard Dec 22: Adani Names with F&O Question Marks Still in the Race
TikTok Dives Into Southeast Asia With E-Commerce Push
Kaynes Technology Pre-IPO – Can’t Put a Finger on the Business
Byju’s to Lay off 2,500 Employees, Consolidate Several Units
Gartner Inc: Initiation of Coverage – Major Revenue Streams & Other Drivers
Shippit Acquires Luwjistik to Ramp up Regional Expansion

Sea Ltd – No Bringing Back to Life For Free Fire, Shopee’s Top Line Growth Could Disappear

By Oshadhi Kumarasiri

Garena has introduced nine major updates to “Free Fire” since June last-year but none of them has managed to turn around the game’s declining trend and regain the lost users.
With Sea Ltd (SE US) no longer capable of funding Shopee’s growth, we are expecting e-commerce to start losing its top-line growth potential from 4Q22.
Even though we are predicting a lot of downside to Sea Ltd over the medium term, an okayish Q3 could see shares bouncing back from the bottom.

Elmo Software Confirms Takeover Interest from Various Parties

Elmo Software (ELO AU) confirmed takeover interest from several parties, including Accel-KKR. Elmo previously disclosed on 14 June that it had discussions on a non-binding offer at A$6.10 per share.
The previous talks ended because the bidder (Accel-KKR) could not progress to a binding offer due to changing tech valuations. Elmo has materially underperformed ASX SaaS peers since 14 June.
The current conditions suggest a higher risk that the talks will fizzle out. Despite today’s 28% pop, the shares remain undemanding compared to peer multiples providing support to the shares.

ELMO Software (ELO AU): KKR Returns To The Well

Cloud-Based solutions provider Elmo Software (ELO AU) has confirmed it has received multiple expressions of interest from various parties, including Accel-KKR.
No agreement has been reached with any parties, no pricing mentioned, nor whether data room access has been afforded.
Earlier this year ELMO held discussions with Accel-KKR in regard to a change of control proposal at $6.10/share. That figure is a stretch in this market.

Lionheart Studio IPO: Still Same Inflated Valuation

By Sanghyun Park

Lionheart used the net profit from 3Q last year to 2Q this year. The Odin sales peaked in the third quarter of last year and are on a downward trend.
The indicative price band reaches a P/E multiple of 22~32x reasonably projected earnings of ₩140B. NCsoft’s 12M forward PER stands at 14-15x. Krafton is only 12x.
It is unclear whether the market will accept this price deception under current conditions. We should refrain from aggressively approaching it without a clear answer to the decline in sales.

S&P BSE/Sensex Quiddity Leaderboard Dec 22: Adani Names with F&O Question Marks Still in the Race

By Janaghan Jeyakumar, CFA

In this insight, we take a look at the names leading the race to become ADDs/DELs for the BSE SENSEX, 100, 200, and 500 Indices in the December 2022 Rebalance.
The reference period for the trading data used for the index selection ends on 31st October 2022.
At present, I see one change for SENSEX, three changes for BSE 100, and six changes for BSE 200.

TikTok Dives Into Southeast Asia With E-Commerce Push

By Caixin Global

ByteDance’s TikTok is cranking up its e-commerce foray into Southeast Asia as the Chinese tech giant pushes to commercialize the popular short video app to create a new revenue stream.
During the first half, TikTok launched e-commerce businesses in Thailand, Vietnam, Malaysia, the Philippines and Singapore, expanding its presence to all major markets in the region.
TikTok has been operating online shopping services in Indonesia, Southeast Asia’s largest economy, since early 2021.

Kaynes Technology Pre-IPO – Can’t Put a Finger on the Business

By Ethan Aw

Kaynes Technology India (7575164Z IN) is looking to raise about US$125m in its upcoming India IPO.
Kaynes Technology (KT) is an end-to-end and IoT solutions enabled integrated electronics manufacturing player, having capabilities across the entire spectrum of electronics system design and manufacturing (ESDM) services.
Profitability accelerated post COVID-19 with margins expanding slightly. However, revenue growth might have been driven by the pandemic and there hasn’t been much operating data for us to work with.

Byju’s to Lay off 2,500 Employees, Consolidate Several Units

By Tech in Asia

Byju’s, the global edtech behemoth based out of India, announced that it is laying off 5% or 2,500 of its total workforce as it restructures to achieve overall profitability by March 2023.
The job cuts, which will be across the product, content, media, and technology teams, will be done in phases.
The SoftBank-backed company said the move stems from the consolidation of its various K-10 businesses, namely Toppr, Meritnation, TutorVista, Scholar, and HashLearn, into one unit.

Gartner Inc: Initiation of Coverage – Major Revenue Streams & Other Drivers

This is our first report on Gartner, one of the most well-known companies in the market research and IT advisory domain.
The past quarter’s results for Gartner were quite strong, with double-digit growth in adjusted EPS, revenue, and contract value and the company delivered an all-around beat.
The research revenue of the company has been consistently growing and the retention rate has been quite strong.

Shippit Acquires Luwjistik to Ramp up Regional Expansion

By e27

Australian logistics tech platform Shippit announced that it had acquired its Southeast Asian (SEA) counterpart Luwjistik.
This deal is Shippit’s second acquisition in 2022, after announcing the acquisition of leading Australian last mile technology firm Premonition in March.
Shippit has been operating in SEA since 2020. Through the acquisition, it plans to double down on growth in the region, including in its enterprise customers, by leveraging Luwjistik’s technology, local relationships and expertise.

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Oct 12

Daily Brief TMT/Internet: Socionext, Pushpay Holdings, Lionheart Studio, Meituan, Palo Alto Networks, Zebra Technologies Corp, Adyen BV, Amphenol Corp Cl A and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Socionext IPO Trading – Upsized IPO with Strong Demand. Peers Inched Downwards, but Upside Remains
Pushpay: BGH Resurrects The Catholic Opportunity
LionHeart Studio Pre-IPO – The Negatives – Appears to Be Well past Its Peak, Founder Cashed In $700m
Does Meituan Have the Appetite to Serve HK Food Delivery Market and Take On Foodpanda and Deliveroo?
Cyberattacks at Numerous US Airports by Suspects from Russia
LionHeart Studio IPO – Peer Comparison – Youngest and Most Untested
Zebra Technologies Corporation: Initiation of Coverage – Wide Footprint
Adyen ($ADYEY, $ADYYF, $ADYEN)
Amphenol Corporation: Detailed Credit Analysis & Financial Strength Evaluation Report
Amphenol Corporation: Initiation of Coverage – Financial Forecasts

Socionext IPO Trading – Upsized IPO with Strong Demand. Peers Inched Downwards, but Upside Remains

By Clarence Chu

Socionext (6526 JP) raised around US$463m in its Japan IPO. The IPO consisted of 100% secondary shares.
Socionext is a fabless semiconductor provider which commenced operations after integrating the system on a chip (SoC) businesses of Fujitsu Semiconductor Limited and Panasonic Holding Corporation.
In this note we will talk about the trading dynamics.

Pushpay: BGH Resurrects The Catholic Opportunity

Back on the 26 April, church donor management tech play Pushpay Holdings (PPH NZ) announced “unsolicited, non-binding and conditional expressions of interest or approaches from third parties“. No price was mentioned.
Roughly a month later, BGH Capital and Sixth Street, both existing shareholders, entered into a cooperation agreement with respect to a potential transaction for Pushpay. Again, no price was provided.
Pushpay has now announced it has received a non-binding proposal. Word on the street this involves BGH. Still, no price was made public. A 30% premium to undisturbed is ~NZ$1.34/share.

LionHeart Studio Pre-IPO – The Negatives – Appears to Be Well past Its Peak, Founder Cashed In $700m

By Shifara Samsudeen, ACMA, CGMA

Lionheart Studio (426630 KS), a game development studio based in South Korea, aims to raise around US$420m via its South Korean IPO.
The company is majority owned by Kakao Games Corp (293490 KS) , which after having recently hiked its stake, owned 54.94% of the company prior to listing.
In this note, we will talk about the not-so-positive aspects of the deal.

Does Meituan Have the Appetite to Serve HK Food Delivery Market and Take On Foodpanda and Deliveroo?

Several news media outlets reported that food delivery giant Meituan (3690 HK) is preparing to enter the food delivery market in Hong Kong as domestic market is slowing down.
Slowdown in Chinese economy coupled with regulatory hurdles have made it impossible for Meituan and other domestic tech players to expand locally.
Online food delivery market in HK is dominated by Foodpanda and Deliveroo, and we think Meituan will have to offer deep discounts to grab market share from these two dominants.

Cyberattacks at Numerous US Airports by Suspects from Russia

By Douglas Kim

In the past 24 hours, there have been many news flow about numerous US airports that have been cyber attacked by suspects from Russia.
The increasing media attention on cyberattack threat could result in greater concerns about cybersecurity inducing higher global spending on software and other services that help to protect against cyber attacks.
Global cybersecurity stocks that could benefit from greater media attention on cyberattacks include Palo Alto Networks (PANW US) Crowdstrike Holdings Inc (CRWD US) CloudFlare (NET US).

LionHeart Studio IPO – Peer Comparison – Youngest and Most Untested

Lionheart Studio (426630 KS), a game development studio based in South Korea, aims to raise around US$420m via its South Korean IPO.
The company is majority owned by Kakao Games Corp (293490 KS), which after having recently hiked its stake, owned 54.94% of the company prior to listing.
We spoke about the company’s past performance in our previous note. In this note, we’ll undertake a peer comparison.

Zebra Technologies Corporation: Initiation of Coverage – Wide Footprint

This is our first report on one of the leading players in the Automatic Identification Data Capture (AIDC) market, Zebra Technologies Corporation.
For the solutions which automate and digitize workflows, customer demand remains strong for Zebra and it saw good growth in the e-commerce, retail, manufacturing, and healthcare end markets.
We initiate coverage on the stock of Zebra Technologies Corporation with a ‘Buy’ rating.

Adyen ($ADYEY, $ADYYF, $ADYEN)

By MT Capital

When I think about the world of tech, there is no shortage of products, developments, or innovations that deserve attention.
Some pieces of technology, when broken down, are extraordinarily complex and exist out in the open.
Others hide in plain sight, functioning in the shadows, but are still responsible for certain components of indispensable processes that allow our world to operate as we know it today.

Amphenol Corporation: Detailed Credit Analysis & Financial Strength Evaluation Report

Amphenol Corporation is a renowned designer, manufacturer, and marketer of electrical, electronic and fiber optic connectors and interconnect systems, antennas, sensors and sensor-based products, and coaxial and high-speed specialty cables.
The company has seen a strong financial performance in recent quarters and their restructuring strategy is on track.
Amphenol’s strong portfolio of advanced connectivity and sensor solutions places the company well across all key defense programs as militaries worldwide continue to deploy a wide range of next-generation defense technologies.

Amphenol Corporation: Initiation of Coverage – Financial Forecasts

This is our first report on Amphenol Corporation.
The company is a well-known designer and manufacturer of electrical, electronic and fiber optic connectors and interconnect systems, antennas, sensors and sensor-based products, and coaxial and high-speed specialty cables.
After two challenging years for the airline sector, Amphenol finally saw quarter of strength in the commercial aviation market.

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Oct 11

Daily Brief TMT/Internet: Bilibili, Pushpay Holdings, Lionheart Studio, Tencent, Yaskawa Electric, AVEVA Group PLC, Binance Coin and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Clarifying the Bilibili (9626 HK) Rule on Southbound Eligibility
Pushpay Draws Another Sixth Street/BGH Offer
Lion Heart Studio Pre-IPO – The Positives – Got One Hit
Tencent Seeks Majority Stake in Overseas Game Companies as Game Revenue Slows Down Further
Yaskawa (6506 JP) | Constant Currency Concerns
Schneider Electric/Aveva: Potential Offer Price Sweetening
Open Interest Hits All Time High

Clarifying the Bilibili (9626 HK) Rule on Southbound Eligibility

By Travis Lundy

Bilibili Inc (BILI US) listed in the US in April 2018. It eventually listed in Hong Kong under the ticker Bilibili (9626 HK) in March 2021 as a Secondary Listing.
Bilibili (9626 HK) announced 16 March 2022 it intended to pursue a HK Primary Listing. Application was announced on 2 May 2022, Circular a month later. Results announced 29 September.
As of 3 October, it is a Dual Primary Listing, making it eventually eligible for Southbound Trading. But there as confusion as to when. Hint: It’s March 2023.

Pushpay Draws Another Sixth Street/BGH Offer

Pushpay Holdings (PPH NZ) confirmed that it had received a “revised” indicative non-binding proposal from a shareholder consortium, believed to be Sixth Street/BGH, which has a 20.3% stake.
The proposal is “to acquire the Company at a premium to Friday’s closing share price.” Due to the sell-off, Sixth Street/BGH will likely offer a lower premium than initially intended.
Our best guess is that Sixth Street/BGH’s offer is around A$1.30 per share. While not a knockout offer, it is a good starting point in the current grim market conditions.

Lion Heart Studio Pre-IPO – The Positives – Got One Hit

By Shifara Samsudeen, ACMA, CGMA

Lionheart Studio (426630 KS), a game development studio based in South Korea, aims to raise around US$420m via its South Korean IPO.
The company is majority owned by Kakao Games Corp (293490 KS), which after having recently hiked its stake, owned 54.94% of the company prior to listing.
In this note, we will talk about the positive aspects of the deal.

Tencent Seeks Majority Stake in Overseas Game Companies as Game Revenue Slows Down Further

Several news media outlets reported last week that Tencent has changed its M&A strategy to obtain majority stakes in overseas gaming companies as opposed to buying minority stakes previously.
Tencent’s online game revenue declined YoY for two-consecutive quarters primarily due to decline in domestic game revenue that was impacted by absence of new game titles and minority protection rules.
Our analysis on Tencent’s game downloads and ranks reveal that both domestic and international game revenues would decline further in 3Q2022E.

Yaskawa (6506 JP) | Constant Currency Concerns

By Mark Chadwick

Yaskawa’s order momentum has peaked. On a constant currency basis, orders growth was -6% sequentially
Margins for the key Motion Control segment were 160bps lower in the quarter compared to a year ago
A minor revision down relies on aggressive FX assumptions for the 2H. We feel there is another downgrade to come. Stay Bearish

Schneider Electric/Aveva: Potential Offer Price Sweetening

By Jesus Rodriguez Aguilar

Davidson Kempner and others may seek an improved offer of up to 3,500p/share, 29.7x EV/Fwd EBIT, in line with Ideagen’s acquisition multiples. Gross spread is +2.38%.
Assuming AVEVA can reach 2018a 34.7% EBITDA margins and increase revenues, the offer price would seem cheap. An increase to 3,300p seems feasible, £4,073 million, similar to the Bridge Facility.
Current net debt/EBITDA is 1.3x and EBIT/interest is 33.6x, so it could comfortably take on that additional debt. At 3,300p, proforma net debt/EBITDA would be 1.9x, before adding any synergies.

Open Interest Hits All Time High

By Kaiko

Price Movements: BNB, the native token of Binance Smart Chain, is down 8% following a $100mn hack.
Market Liquidity: Sushiswap’s market share vs. Uniswap hit all time lows of just 1% in September as new Head Chef takes over.
Derivatives: Open interest on Binance has surged to all time highs, although funding rates remain firmly neutral.

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Oct 10

Daily Brief TMT/Internet: Softbank Group, Link Administration, Taiwan Semiconductor (TSMC) – ADR and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

TOPIX October 2022 Rebal – Buy/Sell Baskets (May the Flow Be Ever In Your Favour)
Weekly Deals Digest (09 Oct) – Betagro, Link Admin, Tyro, MACA, Eagle Cement, O2Micro, SMG
Taiwan Tech Weekly: Our Summary of Sweeping New China Restrictions, TSMC Results This Week

TOPIX October 2022 Rebal – Buy/Sell Baskets (May the Flow Be Ever In Your Favour)

By Travis Lundy

As a follow-on to TOPIX October 2022 Rebal – BIG Names with BIG Flows which discussed ¥2.1trln a side flows overall, this insight analyses and proposes intra-sector baskets.
In general, the sector-neutral BUYs vs SELLs baskets of all names where Index Shares change by 10% or more have seen BUYs sharply outperform SELLs in the past three weeks.
Look for pre-positioning unwinds so trading BUY vs SELL baskets which have bucked the trend, banks and chemicals – might be worthwhile. Otherwise, pick your spots. Use the flow.

Weekly Deals Digest (09 Oct) – Betagro, Link Admin, Tyro, MACA, Eagle Cement, O2Micro, SMG

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments – CALB (3931 HK)‘s weak debut. Betagro (BTG TB) will open its books for its THB17.4 billion (US$462 million) from 10 to 25 October.
Event-Driven developments – Link Administration (LNK AU), MACA Ltd (MLD AU), Tyro Payments (TYR AU), Eagle Cement Corp (EAGLE PM), O2Micro International (OIIM US), Singapore Medical (SMG SP).

Taiwan Tech Weekly: Our Summary of Sweeping New China Restrictions, TSMC Results This Week