TMT/Internet

Nomura Holdings is looking to raise around US$486m via selling 2.5% of Nomura Research.
This is not the first sale by Nomura and hence, might not come as a complete surprise.
In this note, we will run the deal through our ECM framework and talk about the recent updates.

Potential MSCI Upweights in May: Kuaishou, JD Health, Akeso

We see a potential increase in the FIF for Kuaishou Technology (1024 HK), JD Health (6618 HK) and Akeso Biopharma Inc (9926 HK) at the MSCI May SAIR.
The increase in FIF will require passive funds to buy 79.45m shares of Kuaishou (1024 HK), 57.35m shares of JD Health (6618 HK) and 15.32m shares of Akeso (9926 HK).
Short interest has started to inch higher on Kuaishou, while short interest is rising sharply on JD Health and Akeso.

Tencent Music (TME): 4Q21, Revenue Down for First Time

In 4Q21, TME’s revenue decreased YoY for the first time since its IPO.
We do not believe the music rise will cover the social entertainment decline in 2022.
Either, we do not believe social entertainment will recover based on its operating data.

UMS Holdings: Excellent Results in 2021 & Valuation Has Become More Attractive After Recent Sell-Off

UMS Holdings’ stock price has been oversold in the past several weeks. It posted excellent results in 4Q 2021 and its valuations have become more attractive.
If the global semiconductor cycle undergoes a major downtrend, UMS Holdings would not be immune from such downturn and the company is likely to experience lower sales and profit growth.
We believe that UMS Holdings has 20% to 40%+ upside from current levels over the next one year, based on historical valuation multiples in the past three years.

Xiaomi (1810 HK): 4Q21, Growth Rate Bounced Up, as High End Strategy Worked

The growth rate of total revenue bounced up and all business lines grew strongly in 4Q21.
Smartphone revenue grew more rapidly than smartphone shipment, as the high-end strategy worked.
We set an upside of 56% and a price target of HK$21 for the year end 2021.

Capcom – The Prospects for Street Fighter 6

A month ago Capcom announced Street Fighter 6 with a small trailer featuring no actual gameplay footage.
Given the somewhat haphazard launch of Street Fighter 5 expectations for the title are likely to be moderate.
However, there has been much progress since the launch of Street Fighter 5 and there are some promising signs to consider.

TME 4Q Results: Earnings Continue to Weaken

TME reported 4Q2021 results on Monday. Revenue for the quarter decreased 8.7% YoY to RMB7.61bn (vs consensus RMB7.66bn) and reported OP decreased 47.3% YoY to RMB682m (vs consensus RMB1.3bn).
Revenue from Online music services grew single digit (4%) for the first time while revenue from Social Entertainment services dropped further during the quarter.
TME expects its revenues to decline in 2022 as it expects the social entertainment services business to remain under pressure due to competition and regulatory pressure.

Before it’s here, it’s on Smartkarma

Mar 22

TMT: Razer Inc, Samsung Sds, Link Administration Holdings, Alibaba Group, Vanguard Intl Semiconductor, Xometry and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Caymans To Decapitate The Headcount
Samsung SDS Placement – Deal Is Very Well Flagged and the Stock Is Cheap, but It’s a Tough One
Link Admin (LNK AU): Scheme On Track as Proposal Emerges For RSS Business
US Expansion of Travel Bans the First Step in Broader Escalation?
Link’s Privatisation by DND on Track to Complete in June/July
Block Deal Sale of Samsung SDS by the Lee Family to Pay for Inheritance Taxes
Vanguard (5347.TT): We Think Vanguard Can Easily Reach 1Q22 Guidance.
Recent IPO Insights: Xometry

Caymans To Decapitate The Headcount

By David Blennerhassett

The Cayman Islands is seeking to eliminate the “headcount test” for Schemes of Arrangement.
Such an amendment will provide greater certainty for Hong Kong Schemes, wherein 59% of all listed companies are Cayman Islands incorporated.
This development arrives a tad late for Razer Inc (1337 HK), which is trading wide to terms, exactly on account of the fact it could potentially fail the headcount test.

Samsung SDS Placement – Deal Is Very Well Flagged and the Stock Is Cheap, but It’s a Tough One

Kookmin Bank Trust Department is looking to raise up to US$321m via selling 3.9% of Samsung SDS.
The deal appears to be very well flagged as the ultimate sellers are the Samsung family.
In this note, we will run the deal through our ECM framework and talk about the recent updates.

Link Admin (LNK AU): Scheme On Track as Proposal Emerges For RSS Business

By David Blennerhassett

Link Administration Holdings (LNK AU) announced that all applications for regulatory approvals have been submitted. The Scheme explanatory booklet will be submitted to ASIC this week.
Separately, discussions with LCFH have not resulted in an agreement for the sale of Link’s BCM business. Additionally, a proposal from FNZ Group for the RSS business was rejected.
The ACCC and FCA approvals are the key risks to the deal completing.

US Expansion of Travel Bans the First Step in Broader Escalation?

The US just expanded travel bans against Chinese officials said to be repressing ethnic and religious minorities.
The timing, a few days after a Biden-Xi call on Russia that appeared to achieve little of substance is telling.
Noises out of the UK have been similarly aggressive here and the question now is how Europe responds.

Link’s Privatisation by DND on Track to Complete in June/July

Link Administration Holdings (LNK AU) notes that the Dye & Durham (DND) privatisation scheme remains on track for a June/July completion. Scheme document will be submitted to the ASIC shortly.
Link also noted that it was unable to reach a binding agreement with LC Financial Holding for the sale of the BCM business.
Key hurdles are ACCC clearance and the Woodford investigation. We would be buyers up to A$5.2 per share (implies 70% deal probability).

Block Deal Sale of Samsung SDS by the Lee Family to Pay for Inheritance Taxes

The Samsung Group owner Lee family wants to partially sell their stake in Samsung Sds worth 390 billion won in a block deal.
The block deal sale involves 3.02 million shares of Samsung SDS or 3.9% of outstanding shares.
We would avoid this block deal as the company may face continued overhang sale issue in the next 1-2 years.

Vanguard (5347.TT): We Think Vanguard Can Easily Reach 1Q22 Guidance.

By Patrick Liao

It’s NTD$4.976~5.176bn to go in March to reach the 1Q22 guidance of NTD$13.2~13.6bn.
Despite Consumer and Smartphone demands could be weak in 1Q because of seasonality, we still see the demands can be strong in PMIC, Auto, 5G and etc.
For the continuous 8” demand, the clients have high willingness to sign up an LTA (long term agreement), which explains the strong demand situation now.

Recent IPO Insights: Xometry

By Aaron Gabin

Two-Sided online marketplace connecting buyers and sellers. But is this more Amazon or Angi?
Game changing acquisition in December of Thomas should turbocharge growth and margins for 2022-2023.
At 4x sales, this is a very high growth asset that has been crushed since IPO, down 55%. Interesting entry point.

Before it’s here, it’s on Smartkarma

Mar 21

TMT: Tobila Systems Inc, GoTo, Samsung SDI, GitLab, BigCommerce Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Tobila Systems: The Monopoly that You Probably Never Heard Of (Even as Its Customer)
GoTo IPO: A No Go
KOSPI 200 IT (TIGER ETF) Rebalancing Preview
Gitlab 4Q22 Earnings: Impressive
GoTo IPO: Peer Comparison and Valuation
BigCommerce: Stock Selloff Looks Finished As Valuation Hit $1.5 Billion

Tobila Systems: The Monopoly that You Probably Never Heard Of (Even as Its Customer)

By Steven Chen

With less than 60 employees, Tobila Systems is the absolute dominator in the space that can make a significant impact on Japan’s society;
The valuation starts to look attractive while the fundamentals remain sound;
Partly benefiting from being the first entrant to this niche with a robust flywheel business model, the company now “monopolizes” both the supply side and the distribution side.

GoTo IPO: A No Go

Superapp GoTo has filed for an IPO to list its shares on the Indonesian Stock Exchange to raise US$1.2bn at a market capitalisation of US$25.0bn.
The company plans to use most of the proceeds on developing its businesses including Gojek, Tokopedia and fintech services.
Our analysis on the company’s financials suggests the company has been burning cash to grow its business and may not be able to generate any profits in the near future.

KOSPI 200 IT (TIGER ETF) Rebalancing Preview

By Sanghyun Park

KOSPI 200 IT sector index rebalances twice a year in June and December. The effective date for the upcoming rebalancing is June 10.
The IT sector has a high degree of price cointegration of the stocks within the sector. Therefore, the impact/price correlation is robust despite a smaller impact size.
At this point, the following three stocks deserve our attention: Samsung SDI, Kakao Pay, and LG Corp. We can expect a passive inflow of +0.15x for these highly liquid names.

Gitlab 4Q22 Earnings: Impressive

By Aaron Gabin

Revenue grew 69% YoY to $78M vs. consensus at $70M (+52%), with very impressive underlying growth metrics that show the larger customers are the fastest growing.
Increased selling through hyperscaler partners may aid S&M leverage over time.
Acquisition of Opstrace accelerates the platform expansion into observability, but right now positioned vs. nonconsumption rather than against Datadog.

GoTo IPO: Peer Comparison and Valuation

Superapp GoTo (1379371D IJ) has filed for an IPO to list its shares on the Indonesian Stock Exchange to raise US$1.1-1.25bn at a valuation of about US$24-26bn.
The company plans to use the proceeds to develop its business including for customer acquisition, product development and sales and marketing.
Our SOTP valuation implies that GoTo’s shares are overvalued at the indicative IPO price range.

BigCommerce: Stock Selloff Looks Finished As Valuation Hit $1.5 Billion

By Andrei Zakharov

Shares of BigCommerce Holdings (BIGC US) slipped below the IPO price of $24.00 per share, and at current valuation, we see limited downside risk for BigCommerce stock investors.
In 2020, Intuit Inc (INTU US) offered to acquire BigCommerce for $1.5 billion, according to CNBC and other public sources. Both BigCommerce and Intuit didn’t provide a comment.
Insider selling activity has slowed down noticeably over the past three months and BigCommerce Holdings (BIGC US) insiders sold ~$5 million worth of shares.

Before it’s here, it’s on Smartkarma

Mar 20

TMT: Alphabet Inc Cl C, GoTo, Meituan, Tencent, Apple Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Vulcan Value Partners Q4 And Annual 2021 Letter
GoTo Gojek Tokopedia IPO: Valuation Insights
Meituan (3690 HK) 182 Rejection Level and Draw Down Buy Support
ECM Weekly (20th Mar 2022) – JD.com, Tencent, Prosus, GoTo, Ferretti, Green Tea, Recbio, Abacus
GreenWood Investors Fourth Quarter 2021 Letter

Vulcan Value Partners Q4 And Annual 2021 Letter

By Fund Newsletters

We are value investors – business analysts with a long-term time horizon focused on purchasing publicly traded companies that are competitively entrenched at significant discounts to intrinsic worth.
After very strong absolute and relative returns through the first nine months of the year, all of our investment strategies lagged their benchmarks during the fourth quarter.
All of our portfolios are fully invested in world class businesses with stable values trading at a significant discount to intrinsic worth.

GoTo Gojek Tokopedia IPO: Valuation Insights

GoTo (1379371D IJ) is the leading digital ecosystem in Southeast Asia. It seeking to raise up to $1.3 billion. Bookbuilding ends on 21 March.
In GoTo Gojek Tokopedia IPO Initiation: Island Shopping, we noted that the fundamentals are mixed as the high growth is accompanied by ongoing losses and cash burn.
Our valuation analysis suggests that the price range is aggressive and unattractive. We would give the IPO a pass.

Meituan (3690 HK) 182 Rejection Level and Draw Down Buy Support

By Thomas Schroeder

Meituan met the 104 macro buy support and short covering spike. 180 resistance to cap for a give back to let the dust settle and set up a fresh long.
180-182 resistance is where old price lows and the 38.2% retracement coincide and expected to induce a reaction lower.
200 and 222 intermediate barriers are in focus. Buy support below 142 lies near 120 on a steep give back sequence.

ECM Weekly (20th Mar 2022) – JD.com, Tencent, Prosus, GoTo, Ferretti, Green Tea, Recbio, Abacus

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
GoTo (1379371D IJ) launched its bookbuild but decided to keep it local, with no international bookrunners.
Placements continue to trickle in with Abacus Property (ABP AU) managing to raise US$150m odd. All eyes will be on JD.com Inc. (9618 HK) in the coming week.

GreenWood Investors Fourth Quarter 2021 Letter

By Fund Newsletters

GreenWood Investors is a mostly-long, deep value investment firm focused on areas of extreme pessimism, structural inefficiencies and low competition.
Our fourth quarter performance reflected a worldwide capitulation away from nearly everything except the large tech companies.
We want to be optimized for both the short, medium and long-term, and seek rare investments that look attractive from all perspectives.
We’ve given significant consideration to owning the big tech monopolies since 2012.
We’ve been finding highly compelling short opportunities in addition to maintaining a high sense of urgency in sifting through the wreckage brought on by the most recent market turmoil.

Before it’s here, it’s on Smartkarma

Mar 19

TMT: Sea Ltd, Wiwynn Corp and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Sea Ltd.’s Money Machine Is Broken, Downside Is Not Fully Priced-In
Wiwynn Corp Placement – Selldown’s Timing Is Curious but Previous Deal Had Performed Well

Sea Ltd.’s Money Machine Is Broken, Downside Is Not Fully Priced-In

By Oshadhi Kumarasiri

Perhaps, misled by the Chinese tech rally due to the change in stance from the Chinese Government, Sea’s shares rose by 33% compared to the broader market’s 8.3%.
With fundamentals deteriorating and the Federal Reserve signalling an aggressive rate hike outlook, Sea Ltd (SE US)’s 33% move seems unwarranted.
Meanwhile, the downside potential is quite significant as Sea trades at a significant FY+2 EV/Sales premium to regional peers whose cyclical bottoms are unknown.

Wiwynn Corp Placement – Selldown’s Timing Is Curious but Previous Deal Had Performed Well

By Clarence Chu

Wistron Corp (3231 TT) aims to raise around US$204m (NT$5.8bn) via selling 3.3% of its stake in subsidiary, Wiwynn Corp (6669 TT) . This would not be a clean-up.
The timing is curious given Wiwynn having just announced its plans to offer up to 17m new shares in a primary follow-on offer.
In this note, we will talk about the firm’s track record and run the deal through our ECM framework.

Before it’s here, it’s on Smartkarma

Mar 18

TMT: Softbank Group, Razer Inc, GoTo, LINE Corp, Meituan, HashiCorp, Intuit Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Softbank Group – China Bounce Erases a Week of Losses
Razer’s Offer Spread Risk/Reward – FY21 Results
GoTo IPO – Valuation – Missed the Tide, Boat Won’t Rise
LINE Gift: The Next Stage
Meituan (3690 HK): Authorities Turned Friendly to Internet Companies, Upgrade to Buy
Will Cisco Make A Bid For HashiCorp As Valuation Fell By Half From The IPO Price?
Intuit: A Strategy Shift And High Momentum Exposure

Softbank Group – China Bounce Erases a Week of Losses

By Kirk Boodry

Softbank is a $23bn winner on the China bounce as Alibaba (+37% over 2 days, $18bn) and Vision Fund (+$4.8bn) recovered from selling pressure over the last week
Improving sentiment aside the discount remains above 50% and the rebound appears to be more about correcting excess selling than a change in market outlook
We remain wary of Chinese exposure in the near-term on political, regulatory and economic risks although the worst appears to be over for now

Razer’s Offer Spread Risk/Reward – FY21 Results

Razer Inc (1337 HK)‘s FY21 results beat consensus revenue by 8% but came below consensus EBIT by 3%, based on CapitalIQ data.
The management did their best to dampen sentiment by pointing out slowing growth momentum and margin compression due to significant growth investments in 2022.
We think that the results/outlook do little to increase the attractiveness of the offer. We would be buyers up to HK$2.5 per share (implies 65% deal probability).

GoTo IPO – Valuation – Missed the Tide, Boat Won’t Rise

GoTo aims to raise around US$1.25bn from a local listing, which will mainly be targeted at domestic investors.
GoTo, is an Indonesian holding company, was formed in May 2021 as a result of a merger between Gojek, leading player in ride hailing, and Tokopedia, leading e-commerce player.
In this note, we will talk about the company’s valuation.

LINE Gift: The Next Stage

By Michael Causton

LINE Gift has doubled its user base to 20 million in a year, and added merchants like Seven Eleven, but isn’t content with this.
It has only just integrated with Zozo and Yahoo Shopping and expects these new partners, as well as new TV ad campaigns, to deliver a major increase in user numbers.
The collaboration with Z Holdings’ through Yahoo Shopping and Zozo shows the potential for leveraging the groups’ huge user base.

Meituan (3690 HK): Authorities Turned Friendly to Internet Companies, Upgrade to Buy

Central Financial Working Committee turned friendly to overseas listed internet Companies.
We believe Meituan will be free from the pressure of anti-monopoly rules.
Meituan stock has fallen significantly and we upgrade it to BUY.

Will Cisco Make A Bid For HashiCorp As Valuation Fell By Half From The IPO Price?

By Andrei Zakharov

Shares of HashiCorp (HCP US) , a leading VC-backed infrastructure automation company, fell ~50% below the IPO price of $80.00 per share.
HashiCorp (HCP US) is a multi-product company that helps to accelerate cloud adoption. The company reported total revenue of $321M in FY’22 ended Jan-22, up 51% year-over-year.
According to public sources, Cisco Systems (CSCO US) has already approached HashiCorp with an acquisition offer in 2019. However, both Cisco and HashiCorp declined to comment on rumors.

Intuit: A Strategy Shift And High Momentum Exposure

By Vladimir Dimitrov, CFA

Intuit returned a negative 27% since I warned for pending risks for the share price back in November of last year.
While most of that disappointing performance was due to market related risks, the company’s strategy seems to be changing rapidly.
Shifting the focus from a pure organic-led growth to an M&A frenzy is a bad omen in the already richly priced software space.

Before it’s here, it’s on Smartkarma

Mar 17

TMT: Tencent, SK Square, GoTo, Nintendo Co Ltd, Hollysys Automation Technologies, Technology Select Sector SPDR and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Hong Kong: Where Have Shorts Increased & Decreased?
Korea Holding Companies: Stub Tradable Names
Tencent (700 HK): Layoff and Penalty Before 4Q21 Result
GoTo IPO – Past Performance Hasn’t All Been Great
Nintendo – Switch Pro Leaks And Implications For Developers
Hollysys (HOLI US): Potential Suitors Didn’t Get The Memo
GoTo Gojek Tokopedia IPO: Offering Details & Index Inclusion
Tencent Met Our 320 Macro Long Entry Target
Downgrading Technology To Underweight
GoTo Gojek Tokopedia IPO Initiation: Island Shopping

Hong Kong: Where Have Shorts Increased & Decreased?

Short notional in Hong Kong is HK$488bn and has been falling mainly as a result of a falling market. Short interest has increased substantially from end January.
From 31 January to 4 March, the largest shorts have been built on Tencent, China Merchants Bank, AIA Group Ltd, Alibaba, JD.com, Meituan, Xiaomi, JD Health and Xinyi Solar.
Over the same period, shorts have covered on COSCO Shipping Holdings, HKEX, Longfor Properties, China Construction Bank, Ping An Insurance, Yanzhou Coal Mining Company and HSBC Holdings.

Korea Holding Companies: Stub Tradable Names

By Sanghyun Park

Korea has a total of 68 holding companies listed on KOSPI and KOSDAQ. We then have 14 holdcos with a high level of price cointegration with their respective listed subsidiaries.
Three holding companies have sigma below zero on a 20D MA. Hanwha Corp is considered stub tradable as its share price relative to its subsidiaries was relatively flat.
Four holdcos, including SK Square are over 70% NAV discount. Among them, SK Square is of the most interest as the price correlation with SK Hynix has been improving lately.

Tencent (700 HK): Layoff and Penalty Before 4Q21 Result

Layoff rumors are spreading, which shadow two departments and 10% of Tencent’s employees.
China Banking Regulatory Commission (CBRC) will fine Tencent for money laundering.
Short video apps are taking time on site from Tencent’s WeChat app.

GoTo IPO – Past Performance Hasn’t All Been Great

GoTo aims to raise around US$1.25bn from a local listing, which will mainly be targeted at domestic investors.
GoTo, is an Indonesian holding company, was formed in May 2021 as a result of a merger between Gojek, leading player in ride hailing, and Tokopedia, leading e-commerce player.
In this note, we talk about the company’s past performance.

Nintendo – Switch Pro Leaks And Implications For Developers

Recent hacks into Nvidia have resulted in leaks that have got the rumour mills churning again for an upgrade to the Switch.
Most details are similar to previous reporting by Bloomberg for the Switch Pro that was expected last year but failed to materialise.
However, the recent leaks point to a bigger GPU upgrade that previously envisioned and that has implications…

Hollysys (HOLI US): Potential Suitors Didn’t Get The Memo

By David Blennerhassett

Hollysys Automation (HOLI US) said in January it would suspend further evaluation of all unsolicited buyout proposals. Two proposals have reportedly since emerged.
According to Bloomberg, the latest tilt is from Beijing Infrastructure, the state-owned operator of Beijing’s railway and subway.
Separately, Hollysys reported FY21 net income of US$44.3mn, a decrease of 14.6% to FY20.

GoTo Gojek Tokopedia IPO: Offering Details & Index Inclusion

GoTo (1379371D IJ) is offering 52bn shares in its IPO (plus a greenshoe of 7.8bn shares). The issue is being targeted at domestic investors and should list on 4 April.
GoTo (1379371D IJ) will also look to list on an international exchange within the next two years by selling just over 8% of the company to those investors.
Inclusion in domestic indices could take place in July, while inclusion in the MSCI and FTSE indices is expected in 2023 at the earliest.

Tencent Met Our 320 Macro Long Entry Target

By Thomas Schroeder

Our bear call on Tencent met the reverse target at 320 at macro support to go long with some choppy trade expected in coming weeks. Volume spikes to induce volatility.
Hong Kong tech index also met the 3,500 rally support. 4,500 represents immediate resistance that will induce a rejection and pullback. Magnitude of this rise will need a give back.
Tencent 390/400 is near resistance to sell (tactical short) and sets up the bigger buy in the lower range quadrant. 400 is the level to clear for bull traction.

Downgrading Technology To Underweight

By Joe Jasper

Our outlook remains bearish at the index level considering we have yet to see any developments that suggest a bottom is in.
The S&P 500, Nasdaq 100 (QQQ), Russell 2000 (IWM), and Russell Micro Cap (IWC) indexes remain in downtrends.
In today’s report we highlight attractive Groups and stocks within Materials, Manufacturing, Services, and Utilities: MA-14 Fertilizer, MF-15 Railroad Equipment & Products, SV-13 Construction & Engineering, Large-Cap, UT-04 Electric, Mid-Atlantic

GoTo Gojek Tokopedia IPO Initiation: Island Shopping

GoTo (1379371D IJ) is the leading digital ecosystem in Southeast Asia. It seeking to raise up to $1.3 billion. Bookbuilding runs from 15 to 21 March.
The fundamentals are mixed as the high growth is accompanied by ongoing losses and cash burn. A credible path to profitability is yet to be established.
In an environment where growth-at-all costs tech firms and peers have materially sold-off and are out of favour, GoTo is not for the faint-hearted.

Before it’s here, it’s on Smartkarma

Mar 16

TMT: Tencent, GoTo, Globalwafers, IndiaMart and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Tencent: Possible Record Fine for Anti-Money Laundering
GoTo Pre-IPO – Quick Take on US$1bn+ Domestic Listing
GlobalWafers (6488.TT): Under Current Ukraine Crisis, We Have to Admit the Volatility Is Very High.
Initiating Coverage:Indiamart Inter.

Tencent: Possible Record Fine for Anti-Money Laundering

Wall Street Journal (WSJ) reported yesterday that Tencent (700 HK) is facing a possible record fine for violating anti-money laundering regulations in China.
People’s Bank of China has found that WeChat Pay had allowed transfer and laundering of funds with illicit transactions which violates the country’s anti-money laundering regulations.
Tencent’s shares dropped further 10.3% to HK$331 per share from HK$369 per share during yesterday’s trade following the above report.

GoTo Pre-IPO – Quick Take on US$1bn+ Domestic Listing

GoTo aims to raise around US$1.25bn from a local listing, which will mainly be targeted at domestic investors. The company has filed its prospectus today.
GoTo, is an Indonesian holding company, was formed in May 2021 as a result of a merger between Gojek, leading player in ride hailing, and Tokopedia, leading e-commerce player.
In this note, we will take a quick look at the company’s financial performance.

GlobalWafers (6488.TT): Under Current Ukraine Crisis, We Have to Admit the Volatility Is Very High.

By Patrick Liao

Under current Ukraine crisis, we have to admit the volatility is very high. Not only the GlobalWafers, but the other semiconductor names are stumbled as well.
Although 4Q21 revenue is NT$15.8bn, the highest record in GlobalWafers’ history, but the termination fee on Siltronic deal was €15mn, which was consuming NT$3.5 for GlobalWafers’ net EPS.
GlobalWafers keeps NT$100bn, ~US$3.6bn, for the expansion in next couple of years, which covers investments across Asia, Europe and the United States spanning both brownfield and greenfield projects.

Initiating Coverage:Indiamart Inter.

By Axis Direct

We assign 45x to the company’s FY24E earnings of Rs 150 to arrive at the target price of Rs 6,800/share, implying an upside of 52% from the CMP.
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Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Before it’s here, it’s on Smartkarma

Mar 15

TMT: Palantir Technologies Inc, LG Energy Solution, Coupang, Hong Kong Hang Seng Index, Amazon.com Inc, Paytm and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Palantir – Little Early But Getting Interesting Again
Korean Financial Authorities Tighten IPO Requirements for Institutional Investors
Softbank Sells $1.0 Billion Additional Worth of Coupang: Continued Overhang Concerns
HSI 18,100 a Big Level
To Buy or not to Buy: Stock Splits?
RBI directs PPBL to temporarily stop onboarding new customers

Palantir – Little Early But Getting Interesting Again

We last wrote on Palantir over a year ago when we suggested stepping away given expiring lock-ups.
The stock is down 58% since that call as it has sold off together with other unprofitable, high-growth names.
However, we remain of the view that there is something to Palantir unlike many of its compatriots and Ark is now out…

Korean Financial Authorities Tighten IPO Requirements for Institutional Investors

On 11 March, Korea Financial Investment Association (KFIA) announced that it will tighten IPO requirements for institutional investors.
This is likely to further dampen the local IPO market in Korea which has been in the doldrums after the biggest-ever IPO in Korea LG Energy Solution two month ago.
As a result of the change in the IPO requirements for institutional investors, this is likely to to negatively impact smaller investment funds without adequate amount of AUM.

Softbank Sells $1.0 Billion Additional Worth of Coupang: Continued Overhang Concerns

On 14 March, it was reported that Softbank’s Vision Fund sold about 1.3 trillion won ($1.04 billion) worth of Coupang (CPNG US) shares on 9 March in a block deal.
The continued selling of Coupang shares by Softbank suggests that Softbank is not confident on the future prospects of the company. We remain negative on Coupang.
Another reason could be because Softbank needs to raise more cash to make up for the losses from its other investments (mainly Chinese tech companies).

HSI 18,100 a Big Level

By Thomas Schroeder

HSI sliced below the 19,600 projection with the next level at 18,450 and the big dual lows from 2012 and 2016 at 18,100 and a big level to hold.
Sell volumes and sell momentum remain high, equating to more short term pain.
HK tech index break below 4,000 support set to test key lows from 2018 and 2019 as the levels to hold to avert new chart lows.

To Buy or not to Buy: Stock Splits?

By Market Sentiment

Stock splits are all the rage – After Google announced in Feb that there would be a 20:1 stock split in July this year
Amazon has followed suit announcing a similar 20:1 split and sending the market into a frenzy
Amazon’s price was up by 6% the next day and Google’s stock rose more than 9% in after-market trading following the news

RBI directs PPBL to temporarily stop onboarding new customers

By ICICI Securities Limited

RBI has directed Paytm Payments Bank (PPBL), an associate of One 97 Communications (OCL or Paytm), to temporarily halt onboarding of new customers, via a letter dated 11th Mar’22. The embargo will have an adverse impact on signing up users for new PPBL wallets or savings / current accounts, until further notice.
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Before it’s here, it’s on Smartkarma

Mar 14

TMT: KraneShares CSI China Internet ETF, Taiwan Semiconductor Sp Adr, Samsung SDI, Razer Inc, Advanced Micro Devices and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

China ADRs & HFCAA: Pace of Homecoming Listings Should Pick Up & Implications
TSMC (TSM.US; 2303.TT): ASP Lifting Hasn’t Decided Yet; QCOM Moves Back High-End Smartphone 8 Gen 1
KODEX (FnGuide) Battery ETF Rebalancing: Passive Flow Tracking for Two Remaining Days
Merger Arb Mondays – Razer, 51Job, Irongate, Link, Crown Resorts, Guodian
Charts to Watch

China ADRs & HFCAA: Pace of Homecoming Listings Should Pick Up & Implications

China ADRs were sharply lower last week as the SEC started to name companies that were identified under the Holding Foreign Companies Accountable Act (HFCAA).
Then DiDi Global dropped 44% on Friday following reports that the their proposals to prevent data/security leaks did not meet CAC’s requirements and work on the HK listing was halted.
With 2024 not too far away, a lot of the U.S. listed companies will look at listing in Hong Kong in the near future. That will have its own implications.

TSMC (TSM.US; 2303.TT): ASP Lifting Hasn’t Decided Yet; QCOM Moves Back High-End Smartphone 8 Gen 1

By Patrick Liao

We think TSMC is still considering 1) at what time and 2) what technologies to further raise wafer price now.
TSMC’s largest client is Apple. Qualcomm should be the 2nd client because they will ship Snapdragon 8 Gen 1 from TSMC in 4Q22. Nvidia/MediaTek are the 3rd/4th clients.
TSMC is giving nearly 49% stock ownership to Sony for CMOS Image Sensor (CIS) Fab in Japan. It is mainly to obtain the CIS technology, to our thoughts.

KODEX (FnGuide) Battery ETF Rebalancing: Passive Flow Tracking for Two Remaining Days

By Sanghyun Park

KODEX battery ETF does rebalancing four times a year from this March. The rebalancing trading is done for 3-trading days from March 14 to 16, presumably equal daily weight.
Due to the low float rate, LG Energy will fall to third place. Samsung SDI should become the top constituent with a 20% cap, followed by SK Innovation at 15%.
The passive impact sizes of the top four stocks are significant, considering they are in the same sector. So, they should make themselves a suitable target for long/short basket trading.

Merger Arb Mondays – Razer, 51Job, Irongate, Link, Crown Resorts, Guodian

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore and the US (Chinese ADRs only).
This week, the highest gross spreads are Razer Inc (1337 HK), 51 Job Inc Adr (JOBS US), Irongate Group (IAP AU), Link Administration Holdings (LNK AU), Crown Resorts (CWN AU)
The lowest gross spreads are CIMIC Group Ltd (CIM AU), Singapore Press Holdings (SPH SP), Australian Pharmaceutical Industries (API AU), Virtus Health (VRT AU), Ausnutria Dairy Corp (1717 HK)

Charts to Watch

By Market Radar

The Chinese Government has not been very friendly with the Chinese tech companies in the last year: it imposed several fines and introduced new anti-monopoly laws, that hurt company business and profitability
Now the SEC is trying to look better into the balance sheet of these companies, threatening a possible delisting from U.S. exchanges. This is another big risk for chinese tech stocks.
An almost 70% drawdown already happened. Will there ever be a reversal?

Before it’s here, it’s on Smartkarma