TMT/Internet

• CATL (3750 HK) is trading at a 6.9% premium to Contemporary Amperex Technology (CATL) (300750 CH) – if that is due to expectations of Fast Entry, that premium could drop.
• CATL (3750 HK) has not announced the overallotment option as exercised and that puts Fast Entry at risk. An announcement prior to the close tomorrow could lead to Fast Entry.
• The earliest inclusion could be at the close on 30 May while the other global index inclusion looks likely in December.

• ETF trading topped 50% of KOSPI turnover in April—a first outside the March 2020 COVID crash—rising nearly 14 percentage points month-to-month despite a sharp overall volume drop.
• Despite a 30% drop in KOSPI volume, leveraged and inverse ETFs surged 28% and 34%, led by ‘KODEX Leverage’ and ‘KODEX 200 Futures Inverse 2X’ hitting top ADV ranks.
• Some local traders see opportunities in spot market dislocations amid volatility, futures rollovers, and ETF-driven supply-demand imbalances likely to persist from last month’s surge.

• If ₩500B comes from common shares, about 40M shares retire, raising Samsung Life and Fire stakes to 10.07%, requiring a ₩0.23T block sale to trim excess.
• Slightly smaller than last time but still notable, the insurers acted fast in February. Expect a ~0.07% block trade soon, though price impact was mild previously.
• Watch for preferred share outperformance as phase two buyback hits 0.66% common vs. 0.81% preferred (effective buyback assuming cancellation); similar dynamics may repeat in the larger ₩4T phase three buyback.

• The review period for the June rebalance of the CSI All Share Semiconductor Index ended 30 April. The changes should be announced on 30 May and implemented on 13 June.
• We forecast 4 adds and 9 deletes for the index with a one-way turnover of 2.7% and a round-trip trade of CNY 1.2bn (US$167m).
• Some stocks have overlaps with changes to the CES China Semiconductor Chips Index and the CNI Semiconductor Chips Index and there will be increased passive flow for those stocks.

• As reported by Sanghyun Park, Samsung Electronics (005930 KS) ‘s phase 2 buyback disposal plan appears to be virtually finalized (or will be finalized soon – not official yet).
• As always, we’ll assess what our tactical models suggest about the trend from here—interpreted alongside the latest catalysts.
• We have been monitoring Samsung Electronics (005930 KS) for a while: the stock has been bottoming, then flat for a while, rallied modestly, now a minor pullback… time to BUY?
  

• Following its AGM on May 13 last, AMD announced a new $6 billion share repurchase program, despite still having $4 billion remaining on the previous buyback program
• The AGM also approved a proposal to authorize a 78% increase in the company’s share count, from 2.25 billion to 4 billion shares
• It’s a bold move on AMD’s part and it reawakens memories of the company’s acquisition of Xilinx back in 2022 in a $35 billion all stock deal. Deja vu ?

• With 8 trading days left in the review period, we forecast 3 changes for the Stock Exchange of Thailand SET 50 Index (SET50 INDEX) in June.
• Capping changes for Delta Electronics Thailand (DELTA TB) will result in big passive selling in the stock and funding inflows for the other index constituents.
• The forecast adds have drifted lower over the last 6 months and outperformed the SET 50 Index while the deletes have dropped a lot and underperformed the index.

• We expect Baidu to report C1Q25 top line,non-GAAP operating profit and GAAP net income inline, (4.2%) and (8.2%) vs. the consensus, and C2Q25 top line guidance (2.7%) vs. the consensus
• Although we expect rebounding consumption to help BIDU’s advertising business, its traffic share losses were alarming. Further, we expect some of BIDU’s core advertising categories to experience sluggish recovery;
• We maintain our view that Baidu lacks visible growth drivers, reiterate our SELL rating, and cut its TP to US$88.

• PROTEAN eGov Technologies LTD (PROTEAN) has experienced a significant setback by not being shortlisted for the Indian government’s PAN 2.0 project worth INR 1,440 crore, a material negative.
• This exclusion, despite earlier confidence, is expected to lead to a substantial decline in this revenue stream over the next 2-3 years, potentially collapsing by 75-100%.
• The PAN business has historically been a key driver of profitability and free cash flow, funding new initiatives now under threat. 

• Makus is #34 in our Korea Small Cap Gem series. Its treasury shares as  percentage of outstanding shares is 44%. Net cash as a percent of market cap is 78%.
• With greater interest in companies that have a combination of high levels of treasury shares as a percentage of market cap, cheap valuations, and excellent fundamentals, Makus fits the bill.
• Makus could be one of the targets for potential tender offers/M&As and likely to outperform the market in the next 1-2 years. 

• Telcoware announced that the largest shareholder and CEO of the company (Keum Han-Tae) will be undertaking a tender offer of 2.332 million shares (25.24%) to take the company private.
• Tender offer price is 13,000 won per share. Tender offer period is from 19 May to 10 June. 
• Telcoware has 4.08 million treasury shares, accounting for 44.1% of outstanding shares. 

• Contemporary Amperex Technology (3750 HK) priced its H Share at HK$263 to raise HK$35,657.2 million (US$4.6 billion) in gross proceeds. The H Share will be listed tomorrow.
• The H Share listing price implies an AH discount of 6.6% at the A Share price of RMB63.51. This compares to Midea Group (300 HK)‘s AH discount of 4.7%.
• CATL had the highest oversubscription rates among recent large AH listings. Our valuation analysis suggests that the H Share listing price is attractive.

• NVIDIA Corp (NVDA US) CEO Jensen Huang visited Taiwan to attend the COMPUTEX Taipei International Computer Exhibition.  
• Meanwhile, NVIDIA continues expanding its workforce, recently opening over a thousand job vacancies globally.  
• Throughout his speech, Huang repeatedly mentioned Taiwan. He opened with “Hello Taiwan,” noting that both of his parents were present in the audience, highlighting his personal connection to Taiwan.  

• Nvidia will provide IP blocks to other semiconductor designers (hyperscalers Amazon, Google, their design partners Alchip, Mediatek) so that they can integrate their own CPU or ASIC into Nvidia’s systems.    
• A small size RTX-Pro-Server for Enterprise to run their own AI models, AI agents. That’s “on-premise” AI. AI Data Platform, a tool to structure and train AI data and models.  
• Mediatek is promoted to the title of “great partner”. Lots of mentions of Hon Hai / Foxconn, TSMC. No mention of Broadcom.

• TSMC: +19.2% Premium; Rebounded from Previous Lows, Consider Shorting ADR Spread at 20% or Higher
• ASE: +6.0% Premium; Near Level to Go Short the ADR Spread
• ChipMOS: +3.4% Premium; Good Level to Short the ADR Spread

• COMPUTEX 2025 Kicks Off — Nvidia CEO unveils Taiwan AI Supercomputer investment plan with Hon Hai, TSMC as key partners.
• Nvidia Opens Up Ecosystem with new “NVLink Fusion” — A strategic move to cement long-term platform dominance.
• PC Monitor — Asus Results Warn of Coming Slowdown; PCs’ Next Edge AI Shift 

• There’s been an avalanche of biased or disingenuous comments along the lines of “Samsung, TSMC won’t use High N.A. EUV” or “too expensive, too difficult”. 
• Samsung will use High NA in 4F² DRAM by 2028; TSMC in some but not all A14 processes by 2028. 
• We should really think about High NA as optionality value for ASML (share price), rather than a catalyst.

• Their self-serve software platform enables marketers to precisely target audiences through their MNTN Matched technology and then directly attribute each view to a purchase or other action.
• Detractors of this IPO may point to the lack of profitability of a company founded in 2009 as well as the immense competition in the space.
• The company does have a grand vision and a solid core of backers with a manageable deal size.  Furthermore, 19 of the last 25 quarters have produced positive adjusted EBITDA. 

• In this edition: • AkzoNobel | believed to be close to a final deal with JSW Paints on Akzo Nobel India • KPN | VodafoneZiggo investigating possible sale of transmission towers • InPost | poor delivery quality in to-door segment damaging to e-commerce growth • Just Eat TakeAway.com (“JET”) | Prosus launches recommended cash offer • Corporate agenda | week 21 – 24

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: Contemporary Amperex Technology (3750 HK) and Jiangsu Hengrui Pharmaceuticals (1276 HK) launch H Share listings.
• Event-Driven developments: ESR Group (1821 HK), Oneconnect Financial Technology (6638 HK), Mayne Pharma (MYX AU), Nissin Corp (9066 JP), Nippon Road (1884 JP), Technopro Holdings (6028 JP). 

• Gross SOUTHBOUND volumes averaged more than HK$100bn a day this past week, which gets us back above halfway to the peak earlier this spring. Net flows were negative HK$8bn+.
• Among the top buys as a percentage of volume, financials, utilities, and energy REALLY stand out. Among top sells, industrials, info tech, and consumer discretionary are tops.
• The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.

• CATL (3750 HK) is forecasted to fail the fast-entry float cap threshold of both global indices due to unlisted shares, locked cornerstone investors and domestic offering.
• Stock price needs to rise by ~30% on the first trading day to achieve fast-entry to one global index. Offer price is 263HKD and the adjustment option has been exercised.
• The security is expected to be added to Global Standard in August 2025 and to Global All-World in December 2025, with an elevated free float following the 6-month cornerstone lock-up.

• Nexon underperformed the software segment by 32% in the past 12 months, and analysts expect earnings to decline over the next 5 years.
• But the company beat Q1 consensus EBIT estimates.by 54% and the stock lurched 17% the very next day.
• Nexon’s business is immune to tariffs and tends to perform well in recessions. The company’s pipeline appears to be stronger than anyone imagined.

• Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
• On the IPO front, Contemporary Amperex Technology (CATL) (300750 CH) and Jiangsu Hengrui Medicine (600276 CH) will remain in the spotlight in the coming week as well.
• On the placements front, Japan deals appear to be picking up again.

• GMO Internet Group (9449 JP)  is looking to sell its 33.4% stake in its subsidiary GMO Internet (4784 JP)  to meet free-float requirements.
• Shares are very overvalued at the moment and should be worth a mere fraction of its current trading value.
• We have looked at the company’s deal dynamics in our earlier notes. In this note, we discuss the firm’s outlook as well as valuation.

• More US restrictions on export of SPE Semi Production Equipment to Chinese firms (CXMT, SMIC, YMTC). The big increase in Chinese spending was done over 2023-24, it’s declining in 2025-26. 
• Chinese domestic SPE vendors are growing fast and gaining share from AMAT, LAM, TEL. ASML is a monopoly below 65nm. KLA is very dominant. Focus on best 2: ASML, KLA.
• China’s efforts to grow its own supply chain and equipment makers will continue, AMEC and Naura are the leaders. Consolidation could start. 

• Since mid-April, share price spreads have generally tightened across the European liquid universe of ordinary and preferred shares, with 10 tightening and 9 widening.
• The premium of non-voting, less liquid Handelsbanken B shares vs. A is at irrational highs (54.2%); the discount of Grifols B has tightened (Brookfield is again knocking at the door). 
• Recommended trades long preferred/short ords: Atlas Copco, Grifols. Recommended trades long ordinary / short preferred shares: Henkel, SSAB Svenska Stal.

• ASUS beat 1Q25 expectations, but flagged tariff risks and a potential PC demand slowdown in 2H25 as consumers front-load purchases ahead of pricing uncertainty.
• PC segment growth outperformed the market, led by >30% YoY gains in commercial PCs and strong momentum in AI-capable and gaming systems.
• On-Device AI execution is emerging as the next PC evolution; Asus is preparing for this shift with GX10 edge devices and deeper integration of AI across product lines.

• We had Pop Mart International (9992 HK) at the cusp of index inclusion. An increase in Postal Savings Bank of China (1658 HK)‘s FAF led to Pop Mart missing out.
• Estimated one-way turnover at the rebalance is 3.18% leading to a round-trip trade of HK$3.8bn (US$489m).
• There are large inflows for NetEase (9999 HK), Trip.com Group (9961 HK) and Baidu (9888 HK) due to a FAF methodology change for Secondary Listings.

• CSOP told Korean media this Sammy ETF product targets Korea’s local retail traders wanting leveraged or short KOSPI exposure, especially Sammy, without using Korea’s derivatives market—essentially a cross-border retail play.
• Korean retail’s insanely strong demand for anything leveraged, combined with limited domestic derivatives access, makes significant local inflows very likely—far from a moonshot.
• TRS use doesn’t guarantee 1:1 futures buying—depends on broker hedging. But, with Samsung futures volume surging, heavy retail flows in CSOP ETF could cause contango and a basis arb opportunity.

• Back on 3rd March, dual-listed OneConnect Financial (6638 HK/OFT US), a digital retail banking/commercial banking/digital insurance play, announced a non-binding proposal from Ping An, OneConnect’s controlling shareholder with 32.12%.
• By way of a Scheme, Ping An offered HK$2.068/share, or US$7.98/ADS, a 72.33% premium to last close, and a 131.66% premium to the 30-day average. The price was final.
• SAMR has now signed off on the deal and terms are now firmed. M&G is supportive (1.98% of shares out,  ~8% of disinterested shares). Perhaps mid-September completion. 

• TSMC (2330 TT) recent revenues reports were good (April: up 22.2% MoM, and up 48.1% YoY) and its direct competitor Intel (INTC US) is starting to look less competitive.
• According to a report from Reuters, Intel CFO David Zinsner revealed that some of the 18A prospects withdrew after trial production, leading to a lower-than-expected volume of committed demand.
• While Intel struggles, TSMC’s N2 technology is experiencing strong success, being adopted quickly by a wider range of mobile, HPC, AI customers. Our model suggests the stock can rally higher.

• There are no constituent changes for the Hang Seng Internet & IT Index (HSIII) in June but there will be float and capping changes.
• Estimated one-way turnover is 5.95% and that leads to a round-trip trade of HK$3.2bn (US$410m). There are a few stocks with over 0.5x ADV to trade from passive trackers.
• The inflows to NetEase (9999 HK) and Baidu (9888 HK) and the outflows from Kuaishou Technology (1024 HK) and Bilibili (9626 HK) will add to the flows from other indices.

• AMAT mentions “tremendous architecture inflections” in Logic and Memory (GAA, BSPD, HBM), this is true. But reviewed yesterday, how much, how fast versus declining Mature Logic and China declining?
• 2025 China to decline -25%, RoW to increase +25% on AI. This should continue in 2026. Post China’s elevated capex in 2023-24, the SPE sector is a play on AI. 
• ASML and KLA are 1) quasi monopoly 2) in segments that outgrow the total market. ASML is cheapish, KAL at average valuations. Best 2 stocks: ASML, KLA

• Revenue increased to JPY1.2bn (+24.4% YoY), driven by growth in WafCharm and CloudFastener, with ARR at JPY4.5bn (+30.9% YoY).
• Operating profit declined to JPY241mn (-23.6% YoY) due to increased operating expenses, including personnel and outsourcing costs.
• Shadankun’s ARR reached JPY1.7bn (+6.1% YoY) with a user count of 1,322 companies and a churn rate of 1.06%.

• Revenue reached JPY2.2bn (+4.5% YoY), with Product Services at JPY1.5bn (+22.6% YoY) and Professional Services at JPY707mn (-20.0% YoY).
• Operating profit increased to JPY412mn (+45.5% YoY) due to a JPY177mn rise in Product Services gross profit.
• LaKeel product license sales rose to JPY412mn (+174.5% YoY), driven by LaKeel HR, with ARPU at JPY317,000 (+16.5% YoY).

• POET Technologies is a startup disrupting the photonics industry with a new technology that eliminates parts of an optical transceiver and replaces them with a single integrated device which is smaller, cheaper, faster, more scalable and with much lower power consumption than the current solutions.
• Its solution can be produced at wafer scale, eliminating costly manual steps, and allowing it to be easily produced in large quantities and at low cost.
• In 2024 it raised $81 million to ramp production and restructure the company by buying out its JV partner.

• Revenue was JPY1.6bn, increasing 3.4% YoY but decreasing 27.2% QoQ, with Japan and overseas declines.
• Operating loss reduced YoY due to cost reduction efforts, with decreased labor, outsourcing, and SG&A expenses.
• Foreign exchange loss of JPY116mn recorded due to settlement and revaluation of foreign currency-denominated receivables and payables.

• The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
• The official index changes and indicative weights for the June 2025 index rebal event will be announced on Friday 16th May 2025.
• We continue to expect zero index changes for June 2025 but we estimate there to be capping flows of US$396mn one-way.

• The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
• For the June 2025 index rebal, we estimate there to be US$423mn one-way flows due to capping.
• We also expect three index changes (so far) for the next semiannual index review which will take place in September 2025 (regular ADDs/DELs only take place in March and September).

• Contemporary Amperex Technology (CATL) (300750 CH) has offered118 million shares in Hong Kong, priced at HKD263 per share, a modest discount to its A share price.
• More than half of the USD4 Billion Hong Kong share offering has already been subscribed by cornerstone investors.
• Middle Eastern sovereign wealth funds are amongst CATL’s key corner stone investors while the deal excluded US onshore investors given the mounting geopolitical tensions.

• Oneconnect Financial Technology (6638 HK) disclosed a preconditional scheme offer from Ping An Insurance (H) (2318 HK) at HK$2.068 per share (US$7.976 per ADS).
• Despite the hefty premium, the offer is opportunistic as it values OneConnect below net cash, and the FCF burn is modest (net cash can fund 8 years of FCF burn).
• Ping An has secured support from M&G to lower vote risk. The key risk remains that an activist stealthily builds a blocking stake (below the 5% HKEx disclosure threshold).

• Pastel Ltd, a subsidiary of Singapore Telecommunications (Singtel) is looking to raise up to US$1bn via selling a 0.8% stake in Bharti Airtel Limited.
• Singtel had sold a 0.8% stake (US$950m then) to GQG Partners in Mar 2024.  Singtel had a total stake of around 29.3% in the firm, as of the last close.
• In this note, we run the deal through our ECM framework and comment on deal dynamics.

• Typical Intel? 18A node was going to be a great success with customers lining up. CFO now says that revenues from external customers is “not significant”, limited to packaging only.
• Intel CFO toned expectation of significant external 18A revenues by 2027: some revenues with UMC, Tower, some packaging, some older gen Intel16 “not a ton has to come from 18A”.   
• Clear admission that Intel Foundry won’t be ready for external clients before 14A in 2028 due to lack of design tools (PDK). All that is good for TSMC.

• Solid Q1 and reaffirmed guidance: Appier delivered 27% organic growth in Q1, maintained FY targets, and continues to benefit from resilient demand for AI marketing solutions.
• Strategic acquisition of AdCreative.ai: The deal expands Appier’s AI portfolio, enhances creative automation capabilities, and supports cross-sell potential, despite short-term margin pressure from integration.
• Attractive valuation with upside: Despite strong fundamentals, shares trade below 3x EV/sales; H2 seasonality and AI adoption present a compelling re-rating opportunity.

• Intel has signalled a shift from its long held Copy Exactly strategy to a “democratization of innovation between Technology Development & High Volume Manufacturing
• This may be more akin to how TSMC operates. Some hail this as a positive, others are not quite so convinced, but it’s a seismic shift at a critical juncture 
• If Intel is indeed switching from CE to CT, it needs to be a carefully thought out, well planned transition to succeed. But that’s not what what we see happening. 

• Freee KK (4478 JP) reported 3QFY06/2025 results today. Revenue for the quarter was marginally below consensus despite increasing 27% YoY, while GAAP OP beat consensus by a huge margin.
• Due to the tax filing season, freee’s S&M costs tends to be higher during 3Q which led to slightly lower Adj. OP during the quarter. Price revisions have improved ARPU.
• Freee’s share price has been up more than 40% YTD, strengthening profitability and its solid business model vs Money Forward (3994 JP) mean there is further upside.

• SMIC reported C1Q25 top line, IFRS operating profit and IFRS net income (8.3%), in-line and (8.9%) vs our estimates. 
• Evidence pointed to the revenue shortfall stemming from manufacturing issues associated with high ASP, 300mm, which we suspect to be advanced node products. 
• We cut the TP from HK$47 to HK$43.5 to reflect the headwinds above.

• GMO Internet Group (9449 JP) is looking to sell its 33.4% stake in its subsidiary GMO Internet (4784 JP) to meet free-float requirements.
• As the current free-float is tiny, the deal is more like a quasi-IPO rather than a placement, in our view.
• In this note, we will talk about the deal dynamics as well as updates on the company’s financial performance.

• The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
• The official index changes and indicative weights for the June 2025 index rebal event will be announced after the close on Friday 16th May 2025.
• We continue to expect zero index changes for June 2025 but we estimate there to be capping flows of US$1.85bn one-way.

• In 1Q25, both total revenue and game revenue growth rates accelerated.
• The authorities have been turning from containing games to encouraging games.
• We expect the stock has an upside of 34% and a price target of HK$700. Buy.

• NVIDIA stock rose over 3% Wednesday morning, after news of a reported multi-billion-dollar AI chip deal with Saudi Arabia, announced during an investment forum attended by President Trump.
• Nvidia will supply hundreds of thousands of AI chips over five years to Humain, a new Saudi AI venture backed by the $925B Public Investment Fund.
• Bank of America raised NVDA price target to $160 from $150. A Bloomberg report suggested the UAE may buy over 1 million Nvidia AI chips under a potential U.S. deal.

• With the review period complete, we forecast 10 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index in June.
• The largest flows will be in stocks that are adds/deletes for both indices – and there are a few of those. Plus there are some overlaps with other indices.
• While the forecast adds have outperformed the forecast deletes for both indices since January, near-term performance has not been great. That could change as we near the announcement date.

• Origin story of the book: Becoming interested in Apple’s Achilles heel in China after being too bullish on the company’s success
• Focus on the role of manufacturing design engineers in custom manufacturing and orchestration of Apple’s supply chain in China
• Thesis of the book: Exploring Apple’s strategic positioning in China and the symbiotic relationship between economic scale and customer allure in the luxury market

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

• Cognizant Technology Solutions reported its financial performance for the first quarter of 2025, demonstrating substantial growth and strategic progress amidst an evolving macroeconomic landscape.
• Revenue for the quarter was $5.1 billion, reflecting an 8.2% increase year-over-year in constant currency, largely driven by the acquisition of Belcan and organic growth in the Health Sciences and Financial Services sectors.
• This growth was instrumental in placing Cognizant in what the company refers to as the “Winner’s Circle,” indicating notable progress in achieving strategic targets.

• KLA Corporation reported strong financial results for the March quarter of 2025, with revenues of $3.06 billion, slightly exceeding the midpoint of their guidance.
• Their non-GAAP diluted earnings per share (EPS) of $8.41 and GAAP EPS of $8.16 also met the upper end of expectations.
• This performance was largely driven by robust demand in advanced logic, high-bandwidth memory (HBM), and significant contributions from its advanced packaging businesses.

• Automatic Data Processing, Inc. (ADP) reported solid financial performance in its third quarter of fiscal year 2025, demonstrating robust capabilities amidst varying global economic conditions.
• The company achieved a 6% increase in revenue, alongside a 10 basis point rise in adjusted EBIT margin and a 6% growth in adjusted EPS.
• ADP showed significant growth across its U.S. portfolio, especially in its small business, mid-market, enterprise, and compliance solutions offerings.

• eBay Inc. began 2025 with results surpassing expectations across key financial metrics, despite a challenging operational environment triggered by ongoing trade policy changes and consumer concerns over increasing prices for imported goods.
• The first quarter saw a nearly 2% increase in Gross Merchandise Volume (GMV) to approximately $18.8 billion, marking a consecutive streak of positive growth for four quarters.
• The company’s revenue rose over 1% to $2.58 billion, and non-GAAP earnings per share grew by 10% to $1.38.

• Revenues are hitting the bottom in 1Q25, most firms mention sequential growth in 2Q, sometimes YoY growth. Trends depend on specific firms, mentions of both Auto and Industrial recovering.
• Gross / operating profit recovery could take a bit longer as inventory and price concessions could negate revenue growth for a couple of quarters.
• 2 categories of stocks: the cheap ones (NXP, Onsemi, Renesas, STMicro) and the expensive stocks (Analog Devices, Infineon, Microchip, Texas Instruments). I’d go with Renesas and Texas Instruments.

• With the review period complete, there are 2 non-constituents in direct inclusion zone and 4 current constituents in direct deletion zone.
• 4 changes result in a one-way turnover of 5.7%, leading to a round-trip trade of CNY 21.8bn (US$3bn). Index arb balances will increase the impact on the stocks.
• After drifting in a range, the forecast adds have outperformed the forecast deletes over the last month. There could be further outperformance as we near the announcement date.

• Tencent has rallied 17.29% off the April low—against this backdrop, we analyze implied vol, the earnings-implied jump, and post-earnings price patterns.
• Relative to past earnings cycles, current implied vol screens lower across multiple timeframes and spread metrics.
• Post-Earnings price behavior reveals some non-intuitive dynamics worthy of consideration.

• In this insight, we discuss a pair trade between LG Electronics (066570 KS) (long) and LG Display (034220 KS) (short). 
• LG Display is likely to face greater margin pressures than LG Electronics this year, which could lead a bigger consensus estimates downward revisions for LG Display than LG Electronics. 
• Both LG Electronics and LG Display are trading at 0.6x P/B multiples. Given LG Electronics’ much higher ROE vs LG Display, LG Electronics should be trading at higher valuation multiples. 

• Unisound AI Technology (1053075D CH) is looking to raise at least US$300m in its upcoming HK IPO.
• The firm specializes primarily in speech recognition and text-to-speech capabilities
• In this note, we look at the firm’s past performance.

• B-EN-G achieved record-high orders of JPY21.7bn and revenue of JPY20.8bn, driven by IT investments and sales growth.
• Operating profit reached JPY4.7bn, with a 20.4% YoY increase, supported by higher project profitability and license sales.
• For FY03/26, B-EN-G forecasts revenue of JPY22.0bn and operating profit of JPY5.2bn, focusing on digital transformation demand.

• Revenue for FY03/25 increased 5.0% YoY to JPY4.4bn, with recurring revenue rising 8.9% YoY to JPY4.2bn.
• Operating profit for FY03/25 declined 14.2% YoY to JPY385mn, with SG&A expenses increasing 10.9% YoY to JPY3.2bn.
• FY03/26 forecast includes revenue of JPY5.1bn (+14.8% YoY) and operating profit of JPY505mn (+31.1% YoY).

• In FY03/25, revenue declined 4.3% YoY, with operating profit dropping 45.5% YoY due to reduced securities sales.
• Investment segment revenue fell 25.0% YoY, operating profit decreased 34.0% YoY, despite 45 new investments made.
• FY03/26 forecasts a 16.9% YoY revenue decline, with an operating loss of JPY1.2bn, excluding large-scale securities sales.

• FY03/25 results: Sales JPY300.4bn (+3.2% YoY), operating profit JPY41.5bn (+12.6% YoY), net income JPY41.0bn (+35.6% YoY).
• Medium-term plan targets: FY03/28 sales JPY340.0bn, operating profit JPY51.0bn, ROE 14%, focusing on core and growth businesses.
• Long-term targets for FY03/31: Sales JPY420.0bn, operating profit JPY65.0bn, ROE 15%, revised upward from initial targets.

• GMGI’s leverage ratio is down to 2Q24 levels & since the consummation of the Meridianbet transaction, GMGI has reduced the consideration payable to Meridianbet’s former owners to ~$34.9m from $70.0m, through payments in cash and shares.
• GMGI ended 1Q25 with cash and equivalents just shy of $30m to support growth initiatives, including strategic M&A and share repurchases.
• GMGI expects full-year 2025 revenue of $190m-$195m, up about 26% to 29% y/y, as it continues to invest in technology, content and new licenses to drive growth and shareholder value.

• Denso Corp (6902 JP) is looking to raise up to JPY137bn (US$940m) by selling 73.9m shares of Renesas Electronics (6723 JP) to international investors.
• The indicative price range is JPY 1,812-1,848/share, a discount of 1-2.95% to Monday’s close. The placement is 4.1% of shares outstanding and is 4.7 days of ADV.
• We do not expect any passive buying at the time of settlement of the placement shares. The earliest passive buying will take place in August and September.

• Denso Corp (6902 JP) is looking to raise US$940m via selling its remaining stake in Renesas Electronics (6723 JP).
• DENSO last sold some of its stake nearly a year ago and hence, this deal is well flagged.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• With the review period complete, we forecast 1 change for the SSE STAR50 (STAR50 INDEX) and 4 changes for the STAR100 Index in June.
• We estimate turnover of 2.26% for the SSE STAR50 (STAR50 INDEX) and 5.05% for the STAR100 Index. The estimated round-trip trade is CNY 8.1bn (US$1.11bn).
• There are multiple stocks that are forecast adds or deletes for other indices and the passive flows will be a lot larger than just for the STAR50/STAR100 indices.

• Antfin (Netherlands) Holding B.V. (Antfin) is looking to raise up to US$242m via selling a 4% stake in Paytm (PAYTM IN).
• Antfin has been selling off its stake since it pared around 12% in its Nov’21 IPO. As of date of writing, it had a 9.85% stake remaining in the firm.
• In this note, we run the deal through our ECM framework and comment on deal dynamics.

• An early channel check of this deal revealed that the offering is multiple-times oversubscribed with continued 1-on-1 conversions. The books close Monday at 4pm.
• The company is targeting the “next generation” of investor with encouraging growth and has the metrics to show they are meaningfully headed in the right direction. 
• Our sources state that want to be involved with the name and we believe an explosive debut could be on tap for this IPO. 

• Gamma Communications (GAMA LN) is the flagship addition forecast at the review at a market cap of ~$1.7bn following its listing transfer from AIM to Main Market on 2 May.
• The ~$1.5bn tender offer of BBGI is expected to close prior to the review. Current F250 replacement candidates are Wickes Group (WIX LN) and Pantheon Infrastructure (PINT LN).
• Mobico Group (MCG LN) and Bellevue Healthcare Trust (BBH LN) are the main deletion candidates set to migrate from F250 to SmallCap.

• Our previous insight indicated a potential buy opportunity immediately followed by higher prices, but China Mobile (941 HK) hasn’t really rallied much since our signal was released, 2 weeks ago.
• Monday, news about a US-China tariffs deal sent global stocks sharply higher. However, the stock closed the day at 84.25, our model’s Q2 profit target (i.e. not a strong rally…).
• Our time model also indicates an overbought state (74% probability of reversal): we’re not bearish on the stock, but in this insight we will discuss a few tactical scenarios.

• Apple reported strong financial results for Q2 of the fiscal year 2025, achieving revenue of $95.4 billion, which represents a 5% increase compared to the previous year.
• This growth was at the high end of the company’s guidance range, and the diluted earnings per share stood at $1.65, marking an 8% year-over-year increase and setting a record for the March quarter.
• The company’s Services segment achieved an all-time revenue high, with a 12% growth year-on-year, indicating robust performance across Apple’s diverse service offerings.

• Our estimations for FY 2025 annual revenue range at around $205,590 million and for 2026 at around $258,431 million.
• The company’s annual revenue reached $164,501 million in 2024 compared to $134,902 million in 2023, posting an increase by 21.94%.
• META’s gross profit for FY 2024 was $134,340 million, increased by 23.31% compared to $108,943 million for the corresponding period of 2023. 

• Net sales decreased 10.8% YoY to JPY210.8bn, with operating income down 31.0% YoY to JPY9.0bn.
• Ordinary income increased 12.7% YoY to JPY6.3bn, supported by foreign exchange gains from yen appreciation.
• Dividend forecast revised to JPY66.0 per share, with a payout ratio of 40.4%, up from JPY52.0.

• This deal should not come as a surprise. Bloomberg has an article out saying tycoons are taking companies private to avoid shareholder activism. It’s not just that.
• The stated reasons (competitive environment requiring faster decision-making and significant restructuring) are all kinda hot garbage. This is being done at adjusted EV/EBITDA of 4x and 10x FCF.
• And there are no synergies counted, and half of the Adjusted EV is net receivables+inventory equal to about 2mos of revenues. This is being done too cheaply. But…. TIJ baby…

• TSMC: +12.7% Premium; Consider Going Long the ADR Spread; Short Interest in Local Shares Approaching Highs
• ASE: +2.0% Premium; Continue to Wait for Near-Parity Before Going Long
• CHT: -0.8% Discount; Wait for More Extreme Level; Short Interest Continues to Spike in ADR

• MediaTek and Nvidia expected to unveil joint ARM-based AI PC SoCs at Computex May 19 – 23; a major milestone for Mediatek expanding into the massive Windows PC market.
• We will be looking to see how the new chips are positioned; To highlight full local LLM inference; enabling private, real-time AI at the edge for PCs?
• We maintain our Structural Long view for Mediatek shares; MediaTek is evolving from mobile SoC leader to full-stack AI compute player across smartphones, PCs, and data centers.

• Intel Down But Not Out — Reportedly Wins Major Microsoft Foundry Contract; Significant Interest from Nvidia and Google
• AMD CEO Lisa Su Presents to U.S. Senate — Taiwan is America’s Key Ally in the AI Chip Race
• Mediatek Approaching Potential Share Catalyst at Computex Taiwan; Nvidia PC PC Announcement Expected

• Onshore Chinese investors’ purchases of HK equity through the Southbound Connect accelerated rapidly after China’s September stimulus. Despite net selling in early May, the onshore bullishness seems sustainable for now.
• Onshore investors prefer internet platforms (Tencent, Alibaba), technology and consumer discretionaries (Xiaomi, SMIC, China Mobile), and lately EVs (Li Auto, XPeng). High dividend SOE banks were bought earlier, not recently.
• Our “China Twelve” stocks and focus themes closely align with onshore investors’ preferences. 6 out of 12 figure in the “top bought” Southbound list – reaffirming our bullishness on them.

• Etoro Group (ETOR US) is ineligible for US indices due to its US foreign listing and undisclosed geographical breakdown of assets and revenues.
• Etoro Group (ETOR US) is forecasted to be added to Global-F in March 2026 following the 6-month lock-up expiry which increases public voting rights and float cap above the thresholds.
• Etoro Group (ETOR US) is forecasted to be added to Global-M in August 2025 as there is no voting rights requirement and a lower float cap threshold.

• Celsys Q1 FY12/25 sales were JPY2.4bn (+19.4% YoY), with operating profit at JPY759mn (+34.2% YoY).
• Creator Support segment sales reached JPY2.1bn (+23.0% YoY), driven by CLIP STUDIO PAINT’s global expansion.
• Creator Platform segment sales were JPY345mn (+1.5% YoY), with ongoing development of a new platform service for FY12/26.