TMT/Internet

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

AMD and Samsung preliminary numbers disappoint, PC demand weakness cited.
U.S. issues broad new rules restricting technology sales to China, essentially removing China as a long-term demand driver for advanced products.
TSMC results coming out this week, expecting all-time high revenue.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Oct 09

Daily Brief TMT/Internet: Kakao Corp, KLA-Tencor Corp, Softbank Corp and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Is Kakao Cheap or Not? Actions Louder than Words
KLA Corporation: Initiation of Coverage – Business Strategy & Key Drivers
Index Rebalance & ETF Flow Recap: HSCI, FTSE, HSI, TW Div+, China 50, KOSDAQ150, TOPIX FFW, PEXA

Is Kakao Cheap or Not? Actions Louder than Words

By Ken S. Kim

Why KakaoBank (323410 KS) , Kakao Games Corp (293490 KS) and Kakao Pay (377300 KS) were hit recently
Aside from the sum of the 3, why Kakao Corp (035720 KS) is getting hit further
Are near the bottom or is there more to go?

KLA Corporation: Initiation of Coverage – Business Strategy & Key Drivers

This is our first report on KLA Corporation, a well-known provider of process control and yield management solutions to the semiconductors industry and other electronics businesses.
Strong customer demand across key product categories, macroeconomic uncertainties, and the effects of consumer demand are factors driving this performance.
Despite macroeconomic and supply chain headwinds, KLA continues to focus on addressing the most pressing process control concerns.

Index Rebalance & ETF Flow Recap: HSCI, FTSE, HSI, TW Div+, China 50, KOSDAQ150, TOPIX FFW, PEXA

By Brian Freitas

We expect a few adds to the HSCI in December followed by a lot more change in March. We could finally reach 80 HSI INDEX constituents in December.
There will be a handful of adds to the FTSE All-World/All-Cap indices in December. But there will be many changes to the FTSE TWSE Taiwan Dividend+ Index in December.
There were large inflows to the Yuanta/PShares Taiwan Dividend Plus ETF (0056 TT), Hang Seng H Share Index ETF (2828 HK) and Tracker Fund of Hong Kong Ltd (2800 HK).

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Oct 08

Daily Brief TMT/Internet: Servicenow Inc, Netgear Inc, Ciena Corp and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Observability: ServiceNow Acquisition Threatens Dynatrace and Elastic
NTGR: Hotspot of a Preview
Ciena Corporation: Initiation of Coverage – Partnership With MSAR & Other Drivers

Observability: ServiceNow Acquisition Threatens Dynatrace and Elastic

By Aaron Gabin

ServiceNow acquired Era Software this week to extend its presence in the observability and log management space.
The deal is most threatening to DT/ESTC (we advocate as longs) and SPLK (short) because of ServiceNow’s ability to bundle functionality for larger deals.
That said…the observability space remains one of the hottest in digital transformations, and the deal is on net, more validating than threatening to DT/ESTC.

NTGR: Hotspot of a Preview

By Hamed Khorsand

NTGR is relying on the back-to-school shopping season to help sell through some of its lingering wireless router inventory as it transitions to higher end models
We continue to believe the retail market remains challenging for NTGR and the Company could have experienced difficulty in selling down inventory to desired levels
During the third quarter NTGR used Prime Day as an opportunity to reduce inventory for certain Nighthawk wireless routers. We expect the same again during Prime Day on October 11

Ciena Corporation: Initiation of Coverage – Partnership With MSAR & Other Drivers

This is our first report on Ciena Corporation, a networking systems, services and software player catering primarily to the telecom industry.
In spite of the elongated lead times and supply chain challenges, the strong secular demand trends have not shown any sign of abating.
In spite of the supply challenges, Ciena had a record quantity of quarter for its WaveLogic 5 shipments.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Oct 07

Daily Brief TMT/Internet: Kakao Pay, ISC Co Ltd, Globish, Ambarella Inc, Corning Inc, Binance Coin, Xperi, Trade Desk Inc, Xerox Corp and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Kakao Pay: Downsized Rights Offering of Kakao Pay Securities & Potential Selling by Alipay
KOSDAQ150 Index Rebalance Preview: Moving in the Right Direction
Thai Online Learning Platform Globish Closes US$2.5M Series A+
Ambarella Inc: Major Drivers
Corning Inc: Facility Expansion & Other Drivers
Introducing: Quarterly Market Report
ADEA & XPER: The Spin and Price Targets
The Trade Desk: The First-Party Data Playbook & Other Drivers
Xerox Corp: Acquisition Of Go Inspire & Other Drivers

Kakao Pay: Downsized Rights Offering of Kakao Pay Securities & Potential Selling by Alipay

The lack of minority shareholders participation in Kakao Pay Securities rights offering is likely to be viewed negatively by many investors since Kakao Pay may need to inject more capital.
On 8 June 2022, Alipay sold 5 million shares of Kakao Pay and Alipay put a lockup on its remaining 46 million shares in Kakao Pay for another 120 days.
All in all, we continue to have a Negative view of Kakao Pay.

KOSDAQ150 Index Rebalance Preview: Moving in the Right Direction

By Brian Freitas

With 85% of the review period complete, we see 10 potential changes to the KOSDAQ 150 Index (KOSDQ150 INDEX) at the December rebalance.
There are a few stocks that are close adds/deletes on market cap and liquidity and could make it into the final list depending on price/volume over the next few weeks.
The potential adds have outperformed the potential deletes over the last month and pre-positioning could continue till the end of the review period.

Thai Online Learning Platform Globish Closes US$2.5M Series A+

By e27

Globish conducts 300,000 English and Chinese classes for learners comprising 20 per cent students and 80 per cent working-age people
Thailand’s edutech startup Globish, which provides a live online learning platform, has announced closing its US$2.5 million Series A+ funding round.
Globish will use the money for expansion into other ASEAN countries. It recently began expanding in Ho Chi Minh City in Vietnam and plans to expand into more markets.

Ambarella Inc: Major Drivers

Ambarella’s Q2 results were on par with management expectations and surpassed the analyst consensus on Wall Street.
The company’s revenue was up 2% from the same period last year, but it was down 10% sequentially.
The company’s blended average selling price surpassed $10 due to the considerable year-over-year growth in CV revenue.

Corning Inc: Facility Expansion & Other Drivers

Corning delivered a mixed set of quarterly results missing out on market expectations with respect to revenues given the challenging environment.
Optical communications were the greatest contributor to the growth of this quarter and were a key factor responsible for the company delivering an earnings beat.
We provide the stock of Corning with a ‘Buy’ rating and a revision in the target price.

Introducing: Quarterly Market Report

By Kaiko

Q3 was a whirlwind dominated by macro volatility, the Merge, and the ongoing fallout from the crypto credit crisis.
Yet, one relatively under-the-radar trend caught my attention: Binance’s increasingly bold moves to clinch market supremacy.
On July 8th, Binance eliminated trading fees for 13 BTC trading pairs and shortly after removed fees for ETH-BUSD.

ADEA & XPER: The Spin and Price Targets

By Hamed Khorsand

Adeia (ADEA) spun out Xperi Inc. (XPER) to shareholders. We are updating our coverage by downgrading ADEA to Buy Rating from Top Pick, initiating coverage of XPER with Top Pick.
The separation of the two businesses should allow the markets to appropriately price each stock. This should lead to a higher overall valuation compared to when the companies were together.
XPER is our Top Pick due to the multiple revenue opportunities from new products over the next 12 months.

The Trade Desk: The First-Party Data Playbook & Other Drivers

Trade Desk’s revenues have continued to grow over the past quarter and the company gained market share in spite of some macroeconomic uncertainty.
The worldwide pressure on Google appears to be creating a market opportunity for Trade Desk.
The company launched its first-party playbook teaching brands to have a self-assessment for companies and their first-party data for the companies to identify their potential steps in the journey of their first-party data.

Xerox Corp: Acquisition Of Go Inspire & Other Drivers

In spite of macroeconomic challenges, Xerox managed to deliver an earnings beat in the last quarterly result.
The signings of its content and capture business, including processing, data extraction, and digital mailroom services, grew double digits though the company did miss out on revenues.
Also, it has launched a worldwide intelligent document process offering to strengthen its content and capture capabilities.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Oct 06

Daily Brief TMT/Internet: Link Administration, CALB, Samsung Electronics, Twitter Inc, Nasdaq Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Link’s Ongoing Overtures from DND Underscore Its Value
StubWorld: Link And D&D Continue Negotiations On Unlisted Ops
CALB IPO: Trading Debut
Samsung Electronics: Lee Jae-Yong Orders the Creation of a New Task Force to Raise Shareholder Value
Elon V. Twitter: Elon Caved…For Sure…Maybe
Trading Ideas on the Possibility of Samsung Electronics’ Special Shareholder Returns
We are Not Crashing, It’s Just Volatile

Link’s Ongoing Overtures from DND Underscore Its Value

Dye & Durham/DND is a persistent bidder and returned with a A$1.27 billion bid for Link Administration (LNK AU)’s CM and BCM businesses. The Board will update next week.
The latest offer is attractive but curiously, contradicts DND’s previous comments that the FCA would make it challenging to distribute any part sale proceeds.
Despite the overhang from the FCA fine, DND’s ongoing persistence and the Board’s potential in-specie distribution of the PEXA Group (PXA AU) stake highlight the underlying value.

StubWorld: Link And D&D Continue Negotiations On Unlisted Ops

In a Musk/Twitter-like on/off/on-again situation, Link Administration (LNK AU) announced it received an improved offer for its corporate markets and Banking & Credit Management (BCM) businesses from Dye & Durham.
Separately, Link is working with the Australian Tax Office on the in-specie distribution of a minimum of 80% of Link’s holding into PEXA Group (PXA AU).
Preceding my comments on Link are the current setup/unwind tables for Asia-Pacific Holdcos. These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

CALB IPO: Trading Debut

CALB (3931 HK) priced its H Share at HK$38.00 per share to raise net proceeds of HK$9.9 billion (US$1.3 billion). The H Share will start trading tomorrow.
Grey market prices across various platforms show the shares last traded at HK$37.30-38.00 per share i.e., -2% down to unchanged compared to the IPO price.
Despite peer multiple derating, the IPO price continues to imply a discount to the median peer CY2023 EV/EBITDA multiple. CALB should be, at least, valued in line with peer multiples.

Samsung Electronics: Lee Jae-Yong Orders the Creation of a New Task Force to Raise Shareholder Value

On 4 October, it was reported that Samsung Electronics (005930 KS) has set up a task force to raise shareholder value of the company.
This task force was formed at the order of Samsung’s Vice Chairman Lee Jae-Yong.
All in all, a major share buyback and cancellations coupled with higher dividends could result in a share price turnaround for Samsung Electronics.

Elon V. Twitter: Elon Caved…For Sure…Maybe

By Vicki Bryan

Elon to Judge: Twitter Lies! Twitter is a fraudster! I am NOT buying Twitter!
Also Elon: Never mind. Carry on. Twitter: Riiiight. We’ll see.
Elon’s Bankers: WUT? WE HAVE TO SELL “CCC” LBP BONDS NO ONE WANTS TO BUY?

Trading Ideas on the Possibility of Samsung Electronics’ Special Shareholder Returns

By Sanghyun Park

1P/Ord LONG/SHORT betting on a 1P-skewed buyback does not look very desirable. The Lee family’s financial needs are short-term, so there is no need for a 1P-skewed buyback.
Given that the 1P discount rate has stabilized again, a strategy betting on the mean reversion does not seem very timely either.
We should look at the possibility that false expectations for a special year-end dividend will further deepen futures backwardation. This situation can lead to quite a juicy spot/futures spread opening.

We are Not Crashing, It’s Just Volatile

By BluSuit

Listening to sentiment alone would lead investors to believe we are 50% down on the S&P 500 and we have another 50% to go.
But, this simply is not true. When benchmarking the markets recent price action by sector, this bear market, on a technical basis, has the hall marks of every market bottom since 2000.
Recollecting Howard Marks book, “Mastering the Market Cycle”, there was a particular part that was of importance.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Oct 04

Daily Brief TMT/Internet: Nexon, Tencent, O2Micro International, NTT (Nippon Telegraph & Telephone), Mobileye Global, Taiwan Semiconductor (TSMC) – ADR, AXT Inc, Peer Metaverse Coin and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Saudi Arabia Gaming: Plans to Invest $38 Billion in Global Game Industry
China Internet Weekly (3Oct2022): Tencent, NetEase, Alibaba, Kuaishou, Uxin
EQD | Tencent (700 HK): Time to Take off Hedges and Leverage up Using Options
O2Micro’s “Reasonable” Homecoming Offer
O2Micro Enters into a Definite Privatisation Agreement at US$5.00 Per ADS
NTT (Buy) – Investor Day Highlights Global Data Center Business
Mobileye Global IPO Preview
Taiwan Tech Weekly: Trying to Recover After a Week of Deep Declines
AXTI: The Fruit of a Preview
Sporting Crypto – October 3rd 2022: What does the Metaverse mean for Sports?

Saudi Arabia Gaming: Plans to Invest $38 Billion in Global Game Industry

Saudi Arabia’s Savvy Games Group has a grand ambition to invest in the global gaming industry. It recently announced that it will invest US$37.8 billion in the global gaming industry.
There has been a sharp appreciation of the USD and Riyal versus JPY which could help to accelerate more M&As of Japanese game companies by SGG.
Saudi Arabia’s aggressive push to expand into the global gaming industry could aid this sector in the coming months as it could result in further major M&As in this sector.

China Internet Weekly (3Oct2022): Tencent, NetEase, Alibaba, Kuaishou, Uxin

By Ming Lu

The global game market can shrink in 2022, which will impact Chinese game companies’ global diversification.
NetEase formally launched its own social networking service to compete with Tencent.
Kuaishou announced that it would launch an e-commerce channel on its App’s homepage.

EQD | Tencent (700 HK): Time to Take off Hedges and Leverage up Using Options

By Simon Harris

Stock has fallen 17% since Sep 15th, and implied vols have picked up
The fundamentals remain strong and tech momentum may be shifting
We suggest two directional trades using options to play earnings

O2Micro’s “Reasonable” Homecoming Offer

O2Micro International (OIIM US), an integrated circuits play, has announced a definitive privatisation transaction.
The acquirer, led by the CEO and CFO of O2Micro, are offering US$5.00/ADS, a 68.9% premium to the undisturbed price.
The Offer requires shareholders representing at least two-thirds of O2Micro vote FOR. Roughly 30% of shares out appear to be supportive. This Offer is expected to close in the 1Q23.

O2Micro Enters into a Definite Privatisation Agreement at US$5.00 Per ADS

O2Micro International (OIIM US) entered into a definitive agreement for going private with FNOF Precious Honour Limited at US$5.00 per ADS, a 54.8% to the undisturbed price (17 March).
Shareholders representing two-thirds of shares present and voting need to approve the deal. The rollover shareholders represent 16.90% of voting rights.
The offer is attractive in the context of O2Micro’s weakening performance and grim market conditions. At the last close, the gross spread is 18.2%. Expect a 1Q23 deal close.

NTT (Buy) – Investor Day Highlights Global Data Center Business

By Kirk Boodry

NTT’s global data center business has 6% market share with annual revenue growth of 20% that is twice the industry average
We have updated our model and valuation summary to reflect the transfer of NTT Ltd, which operates the GDC business, into NTT Data
Our valuation remains unchanged although we have lowered our target price ¥4,500 to ¥4,450 for payment of the H1 dividend. NTT remains a top pick in our coverage

Mobileye Global IPO Preview

Mobileye Global (MBLY US) is getting ready for an IPO in the US in late 2022 at an expected market cap valuation of about US$30 billion.
Mobileye Global was acquired by Intel for US$15.3 million in 2017. Intel currently owns a 100% stake of the company’s outstanding common shares.
Mobileye has world-class technologies in the advanced driver assistance systems (ADAS) and autonomous driving technologies and solutions.

Taiwan Tech Weekly: Trying to Recover After a Week of Deep Declines

Taiwan’s tech space fell hard last week, with the tech sector down 5.4%, compared to a 4.9% drop for the overall market. Semiconductors performed the worst, down 6.2%.
Hon Hai, Delta, Lite-On — EV a major theme for the first-ever Taiwan Expo USA coming October 12th.
Taiwan wafer exports were at an all-time high in August. We note that wafer names have underperformed TSMC.

AXTI: The Fruit of a Preview

By Hamed Khorsand

Third quarter results could serve as an inflection point for AXT Inc. (AXTI) after the Company reported a rebound in gross margin in the second quarter
When AXTI reported second quarter results, management described a design win that would be part of a consumer electronic device with a feature in a higher end model
We believe the reference could have been to the iPhone 14 Pro and Pro Max having different a different display feature compared to the iPhone 14.

Sporting Crypto – October 3rd 2022: What does the Metaverse mean for Sports?

By Sporting Crypto

Anything that augments your physical life, to the digital, is in some way or form linked to what currently is, and what will become, ‘The Metaverse’.
So a Zoom call or a free world game — whilst they don’t wholly agree with the notion of interoperability or persistence —they still are in essence part of the Metaverse.
Now, to give further context, there is the idea of ‘Metaverses’ — aka, Decentraland, Sandbox or any company building their own virtual world.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Oct 03

Daily Brief TMT/Internet: EVOC Intelligent Technology Company Limited H, Lionheart Studios, Vontier Corp and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

EVOC (2308 HK): 19 October H-Class Meeting. IFA Says Fair & Reasonable
Lionheart Studio IPO Valuation Analysis
Some new stocks

EVOC (2308 HK): 19 October H-Class Meeting. IFA Says Fair & Reasonable

The Composite Document for electronics play and property developer EVOC Intelligent Technology Company (2308 HK), has been dispatched. The EM and H-Class meeting will be held on the 19 October.
The Offer Price is HK$1.75/share. It will not be increased. No further dividends will be added.
This is done. Trading at a gross/annualised spread of 2.9%/34%.

Lionheart Studio IPO Valuation Analysis

Our base case valuation of Lionheart Studio is a target price of 19,362 won per share, which is 46% lower than the low end of the IPO price range.
Our IPO valuation assumes a 7.2x EV/EBITDA (comps’ average) using 2023 estimated EBITDA of 145 billion won for the company.
All in all, we believe there is a strong probability of Lionheart Studio being forced to lower its IPO price range in order to attract more investors.

Some new stocks

By Turtles all the way down

First one is Vontier, its main business is a duopoly in gas station equipment and software.
Repair tools for ICE vehicles. Software and hardware for car washes, and some smaller miscellaneous businesses.
Some of which they will divest for probably several $100 million in proceeds. And they have a piece in EV charging infrastructure as well.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Oct 02

Daily Brief TMT/Internet: EVOC Intelligent Technology Company Limited H, Tencent and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

EVOC’s H Share Class Meeting on 19 October
ECM Weekly (2nd Oct 2022) – Onewo, Leapmotor, CALB, Socionext, WCP, Oyo, Ixigo, Tencent, Taiwan Cemt

EVOC’s H Share Class Meeting on 19 October

EVOC Intelligent Technology Company Limited H (2308 HK)‘s H Shareholders’ class meeting is scheduled for 19 October. The IFA considers the offer to be fair and reasonable.
The key conditions are approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders’ rejection). There is no minimum acceptance condition.
The offer is attractive and should gain approval. At last close and for a 7 November payment, the gross and annualised spread to the offer is 2.9% and 26.0%, respectively.

ECM Weekly (2nd Oct 2022) – Onewo, Leapmotor, CALB, Socionext, WCP, Oyo, Ixigo, Tencent, Taiwan Cemt

By Sumeet Singh

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, all listing this week failed to impress which means that the HK and Korean markets are probably in for a slow end of the year.
Taiwan Cement (1101 TT) and Embassy Office Parks REIT (EMBASSY IN) were the two large placements this week. We also looked at possible Tencent (700 HK) linked blocks.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Oct 01

Daily Brief TMT/Internet: Softbank Group, Redington India, Lionheart Studios, Nanya Technology, iShares MSCI ACWI ex US ETF and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Softbank Group – Vision Fund Losses Accelerate into Quarter End
Redington (India) Ltd: Forensic Analysis
Lionheart Studio IPO Preview
Nanya Tech: Micron Results, Light at the End of the Tunnel? Shares Rise
MSCI ACWI Ex-US, EAFE Testing Downtrend Channel Supports — Bounce Potential

Softbank Group – Vision Fund Losses Accelerate into Quarter End

By Kirk Boodry

Valuation losses in the Vision Fund public portfolio are now approaching $5bn as the end of the quarter looms versus break-even as recently as 13 September
That may have influenced the level of VF staff reductions which press reports ut at 30% versus expectations of 20% last month
The discount remains elevated on tech weakness and that is unlikely to change

Redington (India) Ltd: Forensic Analysis

By Nitin Mangal

Redington India (REDI IN)‘s primary business pertains to distribution of Information Technology,mobility and other technology products. The company also is engaged in supply chain solutions and after sales services.
Although company has a strong business, a glance at the balance sheet and financials reveals some concerns particularly at the subsidiary level which should not be ignored.
Forensic discomforts revolve around goodwill, poor earnings quality, instances of margin flirting, branch audit not being carried out by statutory auditors, etc.

Lionheart Studio IPO Preview

Lionheart Studio is getting ready to complete its IPO in November 2022. Lionheart Studios is the second largest IPO in Korea after LG Energy Solution (373220 KS) in 2022.
The IPO offering amount is 410 billion won to 604 billion won. This would also suggest implied market cap of 3.1 trillion won and 4.5 trillion won.
A key investment risk for the company is its excessive reliance on one game (Odin: Valhalla Rising) for its revenue and profits.

Nanya Tech: Micron Results, Light at the End of the Tunnel? Shares Rise

Micron’s near-term guidance implies that consensus estimates likely need to come down for both Micron and Nanya Tech.
However, Micron indicated that they expect supply/demand balance to improve in 2023E.
There could be more negative industry news to come, however Nanya Tech has a very strong balance sheet to weather some weak quarters and is trading at trough-type valuations.

MSCI ACWI Ex-US, EAFE Testing Downtrend Channel Supports — Bounce Potential

By Joe Jasper

Many major indexes have broken below critical supports, including MSCI ACWI (ACWI-US), EURO STOXX 50, STOXX Europe 600, and the DAX.
Odds suggest a bearish downside continuation, and a bearish outlook is appropriate as long as the YTD downtrend remains intact on the ACWI-US, MSCI ACWI ex-US (ACWX-US), and EAFE (EFA-US).
There is bounce potential given these broad global indexes are testing their respective downtrend channel supports, but the fact remains that they are in downtrends, a major problem longer-term.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Sep 29

Daily Brief TMT/Internet: Bilibili, Jasmine International PCL, Appier Group, Delta Electronics, SK Telecom, Unity Software Inc, Roku, Qorvo Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Bilibili (9626 HK): Implications of Dual Primary Listing
Soon-To-Be Cashed-Up Jasmine After Broadband Sale
Appier (4180) | Five Reasons to Remain Bullish
Delta Taiwan Vs. Thailand Pairs Monitor: SET50 Index Driver, But Taiwan Margins Always Higher
Launch of KRX/S&P ESG High Dividends Index
Unity Software: The AppLovin Acquisition Story & Other Developments
Roku Inc: The Buzz & Other System Enhancements
Qorvo Inc: New Launches & Other Developments

Bilibili (9626 HK): Implications of Dual Primary Listing

By Brian Freitas

Earlier today, Bilibili (9626 HK) announced the voluntary conversion of its Secondary Listing on the HKEX (388 HK) to a Dual Primary Listing effective 3 October.
Though the timing is tricky, this could result in the stock not being deleted from the Hang Seng China Enterprises Index (HSCEI INDEX) at the December rebalance.
This could also lead to inflows at the December rebalance from Hang Seng China Enterprises Index (HSCEI INDEX) and Hang Seng Tech Index (HSTECH INDEX) trackers.

Soon-To-Be Cashed-Up Jasmine After Broadband Sale

Jasmine International (JAS TB) is in the home straight to sell its 99.8% interest in Triple T Broadband (TTTBB), and 19% stake in Jasmine Broadband Internet Infrastructure Fund (JASIF TB).
With Bt 32.4bn in proceeds coming through the door, JAS would have net cash of ~Bt 24.8bn against a current market cap of ~Bt 24bn.
This sounds like a situation worth a second look. So I look.

Appier (4180) | Five Reasons to Remain Bullish

By Mark Chadwick

Appier provides AI software that helps large enterprises to grow and monetize their customer base.
Using Appier’s AI analysis tools, brands can automate the way they interact with shoppers and create new business models more efficiently
Business is booming, it is sheltered from macro headwinds and the TAM is expanding aggressively as Appier expands into key US/EMEA markets

Delta Taiwan Vs. Thailand Pairs Monitor: SET50 Index Driver, But Taiwan Margins Always Higher

Since 2Q22 results end-July, Delta Thailand has risen 31% compared to a 3% rise for Delta Taiwan and a 2% rise for Thailand’s SET Index.
Delta Taiwan’s gross margin has historically been consistently higher than Delta Thailand’s. Delta Thailand is a significant licensor of IP from its parent, which could be one reason.
Historical data shows that the relative valuation can swing back over time and the current divergence of Delta Thailand vs. Delta Taiwan is historically extreme.

Launch of KRX/S&P ESG High Dividends Index

KRX plans to launch KRX/S&P ESG High Dividends Index on 4 October. This index will be composed of stocks in KOSPI 200 which have high dividend yields and ESG scores.
We provided a list of 20 stocks in KOSPI with high dividend yields with at least 500 billion won in market cap and those that have higher ESG scores.
Amid a major downturn in the global stock markets, there is a greater emphasis on the preservation of capital and increasing capital allocation to higher dividend yielding stocks.

Unity Software: The AppLovin Acquisition Story & Other Developments

Unity Software has been in the news for a number of reasons be it the ironSource acquisition or the management’s rejection of Applovin’s $20 billion acquisition offer.
While Unity did surpass Wall Street expectations with respect to revenues, the company’s losses were wider than anticipated.
On Oculus Quest, Unity Games accounted for 72% of the top-selling games and 80% of the top-performing VR games in July.

Roku Inc: The Buzz & Other System Enhancements

Roku is witnessing a slow period as a significant slowdown is seen in TV advertising spending because of the macroeconomic environment that is pressuring the platform business growth of Roku in the short term.
However, the active accounts of the company and the TV advertising market share of the company continue to increase.
Roku remains differentiated by its unique assets, proprietary Roku TV OS, innovative advertisement platform for connected TV, and The Roku Channel.

Qorvo Inc: New Launches & Other Developments