TMT/Internet

• The index constituent weights of the FTSE TWSE Dividend+ Index will be capped during the upcoming September 2022 Index quarterly index review.
• In addition, Elan Microelectronics (2458 TT) could also get deleted as discussed in FTSE TWSE Quiddity Leaderboard Sep 2022: Elan Micro (2458 TT) Could Be a Big Negative Surprise 
• In this insight, we take a look at Quiddity’s expectations for index flows resulting from these events. 

• Intouch Holdings (INTUCH TB)‘s discount to NAV is back to levels last seen in November 2021, where euphoric trading was rolling over subsequent to Gulf Energy Development (GULF TB)‘s VTO.
• Intouch’s net cash increased in the 2Q22 and its look-through interim dividend payout is the highest in at least five years.
• I’d be shorting Intouch here and buying Advanced Info Service (ADVANC TB), with a view to mean reversion of ~25% NAV discount. 

• On 23 August, Intel announced that it will partner with Canada’s Brookfield Asset Management to jointly fund up to $30 billion to make advanced semiconductor chips in Arizona. 
• Despite Intel’s aggressive plans to expand the semiconductor chip production, we are more concerned about the overall downturn in the semiconductor sector which lead to further decline in sales. 
• Despite our negative view of Intel’s shares in the near term, Intel could gain market share versus Samsung and TSMC in the semiconductor sector in the next three years.

• We had a call with Fitipower management to understand the company’s latest situation in light of its weak share price and light analyst coverage. 
• Compared to the overall semiconductor industry, Fitipower’s inventory status is exceptionally better than the industry median and thus the company will be under less pressure in the coming quarters.
• Fitipower has a large T$12bn net cash position, equivalent to 48% of its market cap. For 2022E, we expect T$4.5-5bn in EBITDA, which is about 18-20% of its market cap.

• Palo Alto Networks produced an impressive FY4Q22 earnings, blowing out billings growth and showing an impressive display of “platformization”…only trades 8x forward revenues for 25-30% revenue and FCF growth.
• Farfetch finally acquired Yoox Net a Porter, after over a year of speculation. Deal is excellent for FTCH, gives them a monopolistic position in lux ecommerce.
• Netflix’s Gray Man yet another example of the company’s inability to create compelling big budget movies.

• HubSpot delivered a solid quarterly result with 41% revenue growth over the year in a constant currency surpassing Wall Street expectations.
• Its customers have been growing by 25% year on year and the company also delivered an earnings beat.
• In the upper-end market, the company is increasing its pricing of marketing hub enterprise to match the additional value it has been delivering to its customers in the past few years.

• In 2Q22, the company’s adverting revenue increased by 11% YoY, while the market size shrank by 8% YoY.
• The company raised both of its user base and Time Spent per Daily Active User.
• The company’s operating margin continued to shrink due to the layoff at the beginning of this year.

• After a substantial rally, the S&P500 was unable to break above its 200-day MA and market indexes have violated steep 5-week uptrends; we view this pullback as a critical test.
• This is where we see if prior breakout levels/important moving averages hold and market indexes make a higher low, or if this was nothing more than a bear market rally.
• Barring a Fed pivot, and with Treasury yields and the DXY inflecting higher (and potentially commodities, too), it increases the odds for a deeper pullback in the broad market indexes.

• Kuaishou Technology (1024 HK) reported 2Q2022 results today. Revenue grew 13.4% YoY to RMB21.7bn (vs consensus RMB20.7bn) while reported operating losses dropped to RMB3.1bn (vs consensus RMB4.6bn).
• Though top line growth of online marketing services has been declining, the company managed to report growth while peers have been facing decrease in revenues.
• Kuaishou’s domestic biz has turned profitable at the OPM line while there has been significant decrease in Op. losses from the overseas segment.

• Amazon.com delivered a mixed result surpassing Wall Street expectations in terms of revenues but missed out on earnings.
• Net sales exceeded in the quarter, and the revenue growth accelerated to more than 40%.
• The company made solid progress in reducing several cost pressures that faced the fulfillment network productivity, inflationary costs, worldwide stores business, and fixed cost deleverage.

• Despite supply shortages, significant currency headwinds, and the adverse geopolitical impact on Apple’s business in Russia, the company reported an outstanding quarter with revenue of $83 billion, surpassing Wall Street expectations and also delivering an earnings beat.
• The company reached an all-time high in the number of active devices it has installed.
• Apple unleashed a surge of innovation that included the entirely revamped MacBook Air and a new 13-inch MacBook Pro.

• With the street relatively bearish on the stock and the display market overall, we had a call with ChipMOS management to learn if they can prove bears wrong.
• We identify seven supportive factors that can help the company defy industry weakness.
• Valuation has priced in a lot of negativity, we see downside support at 1x PBV and the stock appears inexpensive. Dual-listings are trading near parity.

• Meta Platforms had a disappointing result where it failed to meet Wall Street expectations in terms of both, revenues as well as earnings.
• In Q2, while the average price per ad dropped by 14%, the overall number of ad impressions served across all of their services climbed by 15%.
• In general, Facebook engagement trends have been greater than expected, and robust real growth is still driving engagement on both Facebook and Instagram.

• ServiceNow has had a particularly good performance throughout 2022 and its recent Q2 results were quite robust.
• In Q2, ITSM participated in 12 of the top 20 deals, with 7 of those sales totaling more than $1 million.
• Nine of the top 20 sales totaled over $1 million, and ITOM was involved in 13 of those deals.

• Micron Technology is in the process of transitioning to more sophisticated nodes and is also investing heavily in memory manufacturing.
• The management is striving to control capital expenditures, manage funds utilization, especially for some of its legacy nodes, and focus on cost-effective nodes to see how it can optimize them and the manufacturing footprint area.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Founded in 2008, Ridi is a leading webcomic, digital novels, and e-book provider in Korea.
• In March 2022, Ridi raised $99.4 million in a funding led by GIC at a valuation of $1.3 billion.
• The webtoon market surged to more than $840 million in Korea in 2020, up from about $45 million in 2010, representing a CAGR of 34% in this period.

• The local market is betting that Samsung Electronics will announce an additional shareholder return measure. Special dividends or buyback? They lean towards a buyback.
• It is unlikely that it will be another pref-skewed buyback. The Lee family needs cash now, so preventing the dilution of voting shares becomes the top priority. 
• Hence, we should not have high expectations for a further decline in the pref discount. Instead, we should consider designing a short position aimed at block sales.

• Softbank (9982 JP) is knocking on 6,000 compelling resistance that sets up a short trade just under this barrier. 5,300 lower pattern support is the level to test/break.
• RSI is also building energy for a powerful breakout from the triangle/flat range with a bear spin.
• 6,000 is a stiff barrier and if it caps will set in motion a higher degree decline to retest the 4,200-macro support line.

• Shareholders approved the scheme at the scheme meeting. However, Link Administration (LNK AU) shares declined due to the slow progress in satisfaction of conditions precedent.
• Key conditions precedent is ACCC, FIRB, UK’s FCA and Central Bank of Ireland approvals. The wording in the Chairman’s address on the conditions precedent is incrementally negative.
• The downside to a deal break remains low. At the last close, the potential upside to the offer (10.1%) outweighs the downside (-3.8% to our A$4.21 price target).

• Nearmap Ltd (NEA AU) entered a scheme implementation deed (SID) with Thoma Bravo at A$2.10 per share, a 39.1% premium to the undisturbed price.
• The offer price is attractive. The key conditions are shareholders and regulatory (FIRB & US antitrust) approvals. The scheme meeting is in November. 
• At last close and for the end of November payment, the gross and annualised spread to the offer is 1.4% and 5.2%, respectively.

• After the disappointing withdrawal of two IPOs (SK Shieldus and One Store) in 2Q 2022, shares of SK Square are starting to recover in the past seven weeks. 
• On a NAV basis, shares of SK Square are deeply undervalued. The current valuation reflects a NAV holdco discount of nearly 72.5%.
• If we assume a moderate 50% holdco discount, this would suggest a NAV of 74,677 won per share, which would be 81% higher than current price.

• Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
• Overall, net inflow over the past week was ~US$1.2bn, split between Shanghai (US$0.9bn) and Shenzhen (US$0.3bn).
• The largest inflows were into CATL (300750 CH) and Hundsun Technologies (600570 CH). The largest outflows were in TBEA Co Ltd A (600089 CH) and Tongwei Co Ltd (600438 CH).

• 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 outflow over the past week was ~US$0.21bn, split (-US$0.24bn) for Shanghai and (+US$0.3bn) for Shenzhen.
• The largest inflows were into China International Marine (2039 HK) and Li Ning (2331 HK). The largest outflows were in Meituan (3690 HK)and Kuaishou Technology (1024 HK).

• Shift Up is a game developer in Korea that recently reached the unicorn status. 
• The company is expected to launch Goddess of Victory: Nikke mobile game and Eve console game on PS5 sometime in late 2022/early 2023. 
• The CEO of Shift Up Kim Hyung-tae previously worked as an art director at NCsoft. Shift Up is expected to complete an IPO in 2023. 

• IGA Works is an data tech, digital marketing SaaS unicorn in Korea. It is getting ready for an IPO by the end of 2022.
• IGA Works is a data technology company that provides a complete set of platforms and services for digital transformation and data-driven marketing. 
• Recent local media accounts have mentioned that the the corporate value of IGA Works could exceed 2 trillion won.

• It was a curious thing Nearmap Ltd (NEA AU) agreeing to pay Thoma Bravo up to US$3mn if a transaction agreement did not result. Unless negotiations were well advanced.  
• Mapping technology outfit Nearmap’s board has now unanimously backed Thoma Bravo’s A$2.10/share Offer by way of a Scheme of Arrangement. 
• This is a done deal and accordingly, trading tight to terms.

• We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
• Highest spreads are 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Ramsay Health Care (RHC AU), Infomedia Ltd (IFM AU), Resapp Health (RAP AU), Lifestyle International Holdings (1212 HK).
• Lowest gross spreads are MACA Ltd (MLD AU), Dongzheng Automotive Finance (2718 HK), Excelpoint Technology (EXLP SP), Xiamen International Port H (3378 HK), MyDeal.com, Giordano International (709 HK).

• 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 – China Tourism Group Duty Free Corp Ltd (1880 HK) priced its H Share at HK$158, WCP (WCP KS) issued an updated prospectus.
• Event-Driven developments Alliance Aviation Services (AQZ AU), Nearmap Ltd (NEA AU), Tassal (TGR AU), Genex Power Ltd (GNX AU), Yashili International Holdings (1230 HK), Xiamen International Port H (3378 HK).

• There are no changes to the index names, but FAF and capping changes will lead to a one-way turnover of 4.5% and one-way flow of HK$3,287m.
• An increase in the FAF from 3% to 40% will result in passive inflows of HK$1.18bn for SenseTime Group (20 HK) – that is over 5 days of ADV.
• There are large shorts on some of the stocks that will have passive outflows and some of these positions could be covered on implementation day.

• Chinese food delivery giant Meituan (3690 HK) shed 9% after Tencent (700 HK) reportedly planned to divest its $24bn stake. But it may just be a misunderstanding. Maybe.
• Given Jardine Matheson Holdings (JM SP)‘s strong underlying operating performance, the 40% discount to NAV – one in which there are discounts of discounts – JMH appears attractive here. 
• Expect a firm Offer for Nearmap Ltd (NEA AU) shortly. Thoma Bravo’s due diligence is already at an advanced stage. And why Nearmap entered into the break fee. 

• 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, China Tourism managed to price its IPO above the mid-point.
• There were a host of placements and blocks this week across the region.

• After market close on Friday, Japan-based UI/UX software solutions company Artspark Holdings (3663 JP) announced (link) they will be working towards a Segment transfer from Standard market to Prime market.
• If a TSE-listed name moves from the Standard Market to the Prime Market, a TOPIX Inclusion event will be triggered.
• In this insight, we take a look at the ability of Artspark Holdings (3663 JP) to meet the Prime Market Segment Transfer Requirements and the TOPIX Inclusion Implications.

For our next Webinar, we have the pleasure of welcoming back Analyst Nicolas Van Broekhoven, who will go through his latest picks in the Singapore market, highlighting key stocks and names to watch out for in the Lion City.

The webinar will be hosted on Wednesday, 24 August 2022, 17:00 SGT/HKT.

Nicolas Van Broekhoven was on the buy-side for 15 years, and worked most recently at a medium-sized boutique asset management firm. He grew up in Europe, went to university in the US and has been living in Singapore for the last seven years, which has given him a broad scope on the world and investing in general. He considers himself a generalist investor with a preference for small and mid-cap companies and special situations. However, a large-cap that has gone temporarily out of favour might also pique his interest.

• Canon Inc (7751 JP) announced a buyback on 5 August. That was its 17th ¥50bn buyback in 15 years. And its first “second buyback within a single year” since 2014.
• History suggests outperformance of Peers until the end of the buyback (and it has done well here), then underperformance post-buyback.
• Consensus forward EPS and EBIT ratios vs Peers suggest Canon shares have more to catch up, but some of that would involve reclaiming historical “quality premium.”

• SenseTime Group (20 HK)‘s Free-Float Adjustment Factor (FAF) increases from 3% to 40% following lock-up expiry and the stock will replace China Pacific Insurance (2601 HK) in the HSCEI INDEX. 
• Using prices from the close on 19 August, estimated one-way turnover is 3.82% and will result in a one-way trade of HK$2,751m at the close on 2 September.
• Increase in the FAF on a couple of stocks saves them from index deletion in September but is probably not enough to save them from index deletion in December.

• Sea Ltd results were impressive on a number of levels, with profitability in its core e-commerce business improving considerably in core markets of South-East Asia and Taiwan a key positive. 
• The decline in digital entertainment revenue was expected, with the stabilisation of quarterly active users a sign of some plateauing after recent declines but rankings continue to remain solid. 
• Sea Ltd suspended revenue guidance but continued to stress confidence in the growth outlook, whilst keenly focusing on improving efficiencies and profitability. This underpins our positive long-term view.

• LX Semicon (108320 KS) is looking to transfer from the KOSDAQ market to the KOSPI market. Shareholder meeting is 23 September and the transfer will happen soon after if approved.
• LX Semicon (108320 KS) will be deleted from the KOSDAQ 150 Index on the suspension date. There is zero chance of the stock being included in the Kospi 200 Index.
• Nextin (348210 KS) is a high probability inclusion to the KOSDAQ 150 Index in December but could be an early inclusion in  September to replace LX Semicon (108320 KS).

• Istyle Inc (3660 JP)’s share price rose more than 90% over the last few days on the news that Amazon is becoming a strategic partner of the business.
• With Beauty Services’ margin expansion more than compensating for On Platform’s weaknesses, we are expecting this turnaround in price performance to last longer than a news cycle.
• We think istyle’s share price could break out to a new high as the company’s medium-term OP estimates are revised upwards.

• Tencent (700 HK)  reported 2Q2022 results today. Revenue increased 3.1% YoY to RMB134.0bn (vs consensus RMB134.6bn) while reported OP for the quarter decreased 42.7% YoY to RMB30.bn (vs consensus RMB36.3bn).
• Excluding interest income and gains, adjusted OP decreased 21.2% YoY to RMB23.7bn driven by drop in GPM across all three business segments.
• Tencent also mentioned that news article regarding a possible stake sale of Meituan is inaccurate.

• Revenue grew by 13% YoY in 2Q22 in spite of headwind.
• The company actively expanded outside China to bypass the domestic license shortage.
• We believe the stock has an upside of 52% for the end of 2023.

• In February 2022, I discussed why Appier Group (4180 JP) could be an interesting TOPIX Inclusion Candidate in TOPIX Inclusion Pre-Event: Appier Group (4180 JP) 
• Earlier this month, I reiterated my view in TOPIX Inclusions: Who Is Ready (Aug 2022) identifying Appier Group as the best pick among all current TOPIX Inclusion candidates.
• Since my last insight, the share price has risen sharply and that has important implications for the company’s Prime market ambitions.

• June 27 call to sell strength in line and showing increasing downside pressure below the 185 support (now resistance).
• Dual top at 210 induced a turn well under trendline resistance. Break of bear wedge support confirmed the macro sell signal.
• Below 166 targets 140 where a stall in the decline/bounce is due (resistance near 160-66) but expected to give way for a test on the 110 low zone.

• Vidente (121800 KS) has not submitted its semiannual reports and has been labeled as an ‘Administrative Issue’. This means deletion from the KOSDAQ 150 Index (KOSDQ150 INDEX) on 19 August.
• Hancom Inc (030520 KS) was the highest ranked stock to not be included in the index at the June rebalance. It will now be included in the index.
• Passive funds will need to buy KRW 8.8bn of Hancom Inc (030520 KS) while selling KRW 11.2bn of Vidente (121800 KS). 

• NEC is geared into two mega-trends that will drive 9% CAGR in EBITDA through 2025 
• NEC is a beneficiary of DX (digital transformation) in Japan and global 5G, which are both just starting to take off 
• NEC Investment Day may be short-term catalyst, but it is the undervaluation relative to the long-term opportunity that is mispriced 

• MSCI Korea’s August QIR features one deletion: SK Telecom. But Woori Financial, HYBE, and LG Energy will also present a notable impact as they face float rate changes.
• We should consider executing flow trading on these names, even SKT, towards the effective date as much as possible, as the flow magnitude wouldn’t be enough to act proactively.
• It’s been witnessed that SK Telecom’s recall and liquidation of short positions have been made preemptively this time, minimizing the risk of price distortion on the effective date.

• In 2Q22, revenue decreased YoY for the first time on record.
• Unexpectedly, FinTech revenue stopped growing in 2Q22, as users are conservative in borrowing and investing money.
• However, we still believe Tencent’s stock price is overly impacted.

• Over 80% of the way through the review period for the December rebalance, we see 7 stocks in inclusion/exclusion zone. However, there can be a maximum of 5 changes.
• We estimate a one-way turnover of 3.9% at the December rebalance leading to a one-way trade of CNY 2.85bn.
• The potential adds have outperformed the potential deletes and the SSE50 Index (SSE50 INDEX) by a wide margin over the last few months.

• Sea’s share price dropped 14% yesterday following its 2Q22 results as $2.9bn revenue ($3.0bn for consensus) and $659.4m operating loss excluding goodwill impairment ($594m for consensus) were weaker than expected.
• After lowering the e-commerce revenue guidance by $400m in 1Q22, Sea Ltd (SE US)’s decision to suspend 2022 e-commerce revenue guidance in 2Q22 is an early indication of difficulties ahead.
• Digital Entertainment’s gross bookings are down another 10% QoQ in 2Q22, which indicates that Free Fire’s revenue and profitability could continue to go down during the second half of 2022.

• LX Semicon announced that its board approved KOSPI migration on August 17. This migration requires shareholder approval, and a shareholder meeting will be scheduled for September 23.
• The outflow of KOSDAQ 150 is estimated to be -1.37x ADTV. A passive impact of this magnitude should cause a price movement of at least 3%p.
• But LX Semicon’s GICS sector won’t change after the KOSPI migration. We should refrain from trading with expectations for the possibility of KOSPI 200 inclusion at this point.

• GoTo (GOTO IJ)‘s announcement last week of the integration of GoFood into the Tokopedia app is a further signal of continuing synergies taking place across the ecosystem.
• This latest move follows GoPay’s integration into Tokopedia, which exceeded expectations plus further integration with Bank Jago, and the introduction of GoPay coins common rewards all providing growing synergies.
• GoTo is a unique proxy to the Indonesian digital economy covering more verticals than any other player, with huge potential for ongoing synergies potentially throwing off higher returns. 

• Reuters this afternoon carried an article that Tencent (700 HK) was seeking to divest “US$24bn” (17%) of $78bn market cap delivery company Meituan (3690 HK) by year-end to mollify domestic regulators.
• Tencent would seek to launch a share sale within 2022 “if market conditions are favourable.” Meituan shares tanked 9%, immediately.
• The article suggests disposal via block sale (faster than negotiating with a private buyer), odd given Tencent’s Q1 2022 experience with the JD.com unwind. But it leads to BIG flows.

• Past the midway mark in the review period, we see 18 potential changes to the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) at the December rebalance.
• We estimate a one-way turnover of 3.32% at the December rebalance leading to a one-way trade of CNY 8.55bn.
• The potential adds have outperformed the potential deletes and the Shanghai Shenzhen CSI 300 Index over the last few months, with the outperformance widening over the last few weeks.

• Tencent (700 HK)‘s reported sale of its Meituan (3690 HK) stake led to a selloff on Meituan and on other companies that Tencent has invested in.
• There are 10 listed companies where Tencent (700 HK)‘s holding is over US$1bn. Some stakes are more likely to be sold than others. 
• A complete stake sale will benefit some companies more than others since they are part of a wider array of indices and that will bring in passive flow.

• KMW is the most important name in this rebalancing. It will be a newcomer to the K-New Deal, replacing AfreecaTV for Top Three in INTERNET.
• KMW’s inflow will be very substantial at 8.60x ADTV, whereas AfreecaTV will suffer an outflow equivalent to 1.69x ADTV.
• In addition, HLB will replace Hanmi Science, and Seojin System will take over Danal. Webzen also replaces Devsisters.

• Intel has witnessed a rapid and sudden decline in sales activity which resulted in the company delivering a very weak quarterly result where it failed to meet Wall Street expectations in terms of revenues as well as earnings.
• In its efforts to refocus itself on its core, the management continued to carry out various corporate restructuring efforts.
• We provide the stock of Intel with a ‘Hold’ rating and a revision in the target price.

• Dianxiaomi, a China-based ecommerce software-as-a-service platform, has bagged US$110 million in a series D round.
• With the latest investment, Dianxiaomi has raised a total of US$210 million this year. In March, the company closed a US$100 million series C round.
• Founded by Du Jianyin in 2014, the firm specializes in developing infrastructure for cross-border ecommerce

• T-Mobile has striven to provide the best pricing and network while operating in a cutthroat market and a macroeconomic situation that is rapidly changing.
• They also expanded the availability of T-Mobile Business Internet, making T-Mobile the first and only countrywide provider of the Internet for businesses.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Open Edges Technology is getting ready to complete its IPO in Korea in September 2022. The IPO price range is from 15,000 won to 18,000 won.
• The IPO base deal size is from US$42 million to US$50 million. The expected market cap after the IPO is from 334 billion won to 401 billion won. 
• Open Edges Technology is a system semiconductor IP specialist with one of the world’s only integrated AI semiconductor design asset IP platform. 

• Oracle has rebounded well in terms of financial performance with a strong all-around beat in the recent quarter.
• The company is currently developing a comprehensive set of applications for the healthcare industry’s whole ecosystem, beginning with healthcare providers like hospitals and clinics.
• Besides, during the quarter, Oracle launched an “OCI dedicated region” for the India market as part of its cloud services platform, Oracle Cloud Infrastructure (OCI), to provide customers with public cloud services on-premises.

• This is our first report on identity solutions provider, Okta Inc.
• The company delivered a solid set of results in the last quarter surpassing Wall Street expectations in terms of revenues as well as earnings.
• There was a rise in Okta’s stand-alone revenue, total revenue, current RPO, and RPO.

• AEM reported stellar 1H22 results beating street estimates as well as far outpacing their own guidance. CHIPS act in USA will benefit company in FY23.
• Stock reaction (+6%) muted despite great outlook and management optimism. Despite record results and strong outlook, stock is down YTD. 
• AEM is cheap trading at only +/-10x FY22 EPS, too low given the growth and consistent margins profile. Fair Value remains 8 SGD.

• As designed, the JPX-Nikkei400 Index is something of a disaster. It aims to be slightly ‘smart’ vs other cap-weighted indices like TOPIX, but tracking error vs TOPIX is de minimus.
• This year, in week 1, the ADD vs DELETE performance is positive. If we sector-hedge the ADDs vs DELETEs, it’s doing even better.
• This is probably due to relatively low pre-positioning, and cares. Momentum suggests one could be long ADDs vs DELETEs. And there is the perennial trade to watch out for.

• Nearmap Ltd (NEA AU) disclosed a non-binding indicative offer of A$2.10 per share from Thoma Bravo. The offer price represents a 39.1% premium to the last trading day price.
• Thoma Bravo has secured a 7-day exclusivity to firm up an offer. Thoma Bravo is a credible bidder and agreed to acquire Ping Identity Holding Corp (PING US) last week. 
• Nearmap also revealed other non-binding expressions of interest. The exclusivity could flush out other bids. We think that offer is reasonable. At the last close, the gross spread is 11.4%.

• Consensus has revised down Sea Ltd (SE US)’s inflated estimates before 2Q22 earnings due on 16th August 2022.
• These revised estimates are on the optimistic side as consensus still thinks that 1Q22 was just a one-off drop.
• However, our analysis of Google Play and App Store data suggests that Sea Ltd’s gaming and e-commerce popularity has further deteriorated from the 1Q22 level.

• Roblox initially fell 17% on earnings, but ended the week up 8%… why? Third party data is driving stock price action.
• Reacceleration of DAUs, engagement, and bookings is beginning to play out…bullish ST.
• LT EBITDA margins are anyone’s guess right now, which makes the coming 9/9 Analyst Day an important catalyst to frame up the size and margin impact of TAM extensions.

• Freee reported 4Q and full-year FY06/2022 results. 4Q revenue increased 31.2% YoY to JPY3.87bn (vs consensus JPY3.9bn) while full-year revenue grew 40.2% YoY to JPY14.4bn beating own guidance by 0.2%.
• Operating losses decreased to 18.7% of total revenue from 32.5% of revenue in the same period a year ago. Full-year OP. losses were 15.7% of revenue vs guidance 17.1%.
• Improvement in profitability was driven by growth in ARPU from mid-and-large paying users.

• ARTERIA Networks Corp (4423 JP) posted Q1 22 results in line with expectations
• 7% revenue growth was the highest in five quarters whilst core segment growth was the best since 2019, supported by work from home demand and data volume growth
• Operating income is down YoY as it laps one-time gains a year ago – this has been well-flagged by management and consensus

• Mapping technology outfit Nearmap Ltd (NEA AU) has fielded a non-binding indicative offer from San Francisco-based PE firm Thoma Bravo.
• Thoma Bravo is offering A$2.10/share, a 39% premium to last close, and an 83% premium to when Nearmap was first approached in early July. 
• Due diligence is at an advanced stage. Curiously, Nearmap has agreed to pay Thoma Bravo up to US$3mn if a transaction agreement does not result.