TMT/Internet

• Kioxia Holdings (6600 JP) is aiming to raise around US$700m (including over-allocation) from its Japan IPO.
• It was the world’s largest pure-play NAND flash memory supplier, in terms of both revenue and unit shipments in 2023, according to TechInsights.
• In this note, we talk about the not-so-positive aspects of the deal.

• Tier-2 commodity Memory is a lousy business, which requires high Capex and R&D, generates very low Free Cash Flows. DRAM is more sustainable than NAND as peak margins are higher. 
• Kioxia only makes NAND, has a high market share (16%) but is a Tier-2 supplier with a roadmap lagging SK Hynix by ~2 years, and a high exposure to Consumer. 
• The Memory cycle has recovered, probably close to peak earnings. That’s why stocks have been declining (Micron, Hynix).  Part 2 will cover financials (there’s a bad surprise) and valuations. 

• Xiaomi’s stock price has risen 62% since our buy rating after 2Q24 results.
• We believe vehicle production will bring Xiaomi a revenue of RMB90 billion maximum.
• The sum-of-the-parts valuation suggests significant downside for the next twelve months.

• Hong Kong continued a correction in its Bull market which has lifted the HSCEI to be the best performing Asian index this year.  Southboune buying is strong.
• AAC Technologies Holdings (2018 HK) share price had a breakout relative to the MSCI AC Asia Index.  The company reported solid results benifitting from the smartphone and auto sectors.
• CGN Power (1816 HK) share price relative to MSCI China broke down.  The company reported a disappointing 3Q24 results even as power generation increased by 15% YoY for the period.

• TSMC: +19.2% Premium; Middle of Most Recent ADR Spread Trading Range
• UMC: -1.7% Discount; Local Shares’ Short Interest Continues to Rise
• ASE: +4.0% Premium; Local Shares’ Short Interest Has Finally Stopped Rising

• Delta Thailand Still Grossly Overvalued Even After Recent Correction; Under Market Surveillance Until December 11th
• Delta Taiwan’s Market Cap Remains at Just 57% of Delta Thailand
• Further Valuation Correction Likely Between the Two Names; We Believe Delta Taiwan Should Outperform

• Former TSMC chairman Mark Liu believes Taiwan’s chip industry is unaffected by Trump’s trade policy, showing confidence in the sector.
• DIGITIMES Research predicts a 3.6% CAGR growth in global smartphone shipments from 2024-2029, indicating steady expansion.
• Despite potential US bans and chip supply halts, Huawei remains dedicated to developing advanced technology, including AI chips.

• Trustpilot is a leading online consumer review platform with a strong presence in Europe and North America
• The company is undergoing fundamental improvements following a leadership team upgrade
• Trustpilot has unmatched reputation and scale in the industry with 1.1 million rated businesses, 60 million monthly unique visitors, and a quarter-billion total reviews

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Buffett has famously called Bitcoin a “mirage” and “rat poison squared”.

• If so, then the corporate wrapper masquerading as intelligent leverage of Bitcoin known as MSTR equals that squared — and is perhaps the epitome of late-stage capital cycles expressed

• Before I start, let me just say that I completely get the bull thesis behind Bitcoin. 

• Q2FY3/25 showed strong recovery in OP margins from 3.5% in Q2 FY3/24 to 5.3% in Q2 FY3/25, reflecting stringent cost control and AGEST Group turning to the black.
• Although the performance improved YoY, the company revised its FY3/25 OP guidance down to ¥2.5bn from ¥3.1bn mainly due to a negative impact from a cancellation of a large project for AGEST Group in Q1.
• Nevertheless, the company expects 24.5% OP growth YoY for FY3/25.

• Move away from short gamma levels and position covering help push HSI implied vols lower on the week. 
• Short dated Puts are still very active in HSCEI at the 6300 and 6800 strikes. 
• Both HSI and HSCEI implied vols are trading about 2 points above their pre-stimulus levels. 

• Initiate a short position in MCHP Target Price Range: $45-50 Time Horizon: 6-12 months 
• Declining fundamentals: Q2 FY2025 revenue declined 48% YoY, with adjusted EPS falling 72% YoY. Valuation concerns: P/E of 36.8x vs. sector median of 22x, unsupported by current performance.  
• Geo-Political risk: 50% of sales from Asia, exposed to potential trade tensions. Operational challenges: Customer destocking and sluggish demand. ETF-Driven price support: Potential for sharp correction if sector rotation occurs. 

• Kioxia Holdings (6600 JP) is aiming to raise around US$700m (including over-allocation) from its Japan IPO
• It was the world’s largest pure-play NAND flash memory supplier, in terms of both revenue and unit shipments in 2023, according to TechInsights.
• In this note, we talk about the positive aspects of the deal.

• HP undergoes leadership overhaul and revamps supply chain in preparation for Trump 2.0, while strict qualification measures impact 7nm technology development.
• TSMC’s AI chip expansion is overshadowed by the potential return of Trump, with global notebook shipments fluctuating in Q3/Q4 2024.
• DIGITIMES Research forecasts a steady revenue growth of over 10% CAGR for the global wafer foundry industry during the 2024-2029 period, while Apple India’s sales soar to US$8B driven by strong iPhone sales. Availability of Samsung’s HBM3E for Nvidia’s Blackwell remains uncertain.

• JST Group (1703609D CH) is looking to raise up to US$100m in its upcoming Hong Kong IPO.
• It is China’s largest and most popular e-commerce SaaS ERP provider to facilitate the connection of merchants with over 400 e-commerce platforms in China and across the world.
• In this note, we look at the firm’s past performance.

• The company continues to make progress with its international expansion which partially offsets concerns over the challenges in the company’s domestic market.
• Estimating the total number of shares (and by default ADSs) outstanding has been incredibly challenging as the company has financed operations by issuing stock as the market price of the ADSs has fallen.
• We now estimate that the company has 164 million common shares outstanding which equates to 1.8 million ADSs given the new ADS to common ratio of 1 to 90.

• Secai Marche, a farm-to-table startup connecting farmers with restaurants and retailers in Southeast Asia, has secured an additional JPY 250 million (US$1.6 million) in its Series A funding round.
• The round includes equity financing from Mitsui Sumitomo Insurance Venture Capital (MSIVC) and debt financing from The Shizuoka Bank and The Hokkoku Bank.
• This follows a US$3.5 million Series A round of investment from investors, including Beyond Next Ventures, Spiral Ventures Asia, Mitsubishi UFJ Capital, Future Food Fund, Tsuneishi Shoji, Fukuoka Sonoriku, and Foodison co-CEO Toru Yamamoto, in August this year.

• Kuaishou Technology (1024 HK) and New Oriental Education (9901 HK) will be added to the Hang Seng Index in December while New World Development (17 HK) will be deleted.
• Estimated one-way turnover is 2.7% and the estimated round-trip trade is HK$10.89bn (US$1.4bn) with over 1 day of ADV to trade in the adds and the delete.
• The index committee has net added 1 stock to the Hang Seng Index this year to go from 82 to 83 constituents. Reaching the 100-member target will drag into 2026.

• 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 IPOs front, S.F. Holding (6936 HK) and Kioxia Holdings (6600 JP) launched their much awaited IPO, while we had a new launche in Australia in as well.
• On the placements front, Keppel DC REIT (KDCREIT SP) undertook a large placement

• Despite being a key beneficiary in travel and tourism in China, the rather muted growth in the first half does not bode well for Travelsky Technology Ltd H (696 HK) .
• YTD share price performance has reflected the above, but the deep discount valuation to Trip.com (TCOM US) might be temporary.
• In the near term, the company’s share price will not rebound as the company has less upside participation compared to Airlines and OTA. 

• Smartphone demand remains slow, that contributes to weak outlook for commodity DRAM.  Nvidia / Mediatek and Qualcomm AI PC chips should be launched mid-2025. 
• Nvidia allocation of TSMC CoWoS remains at 60% in 2025, capacity doubles, Data Center GPU revenue will double? TSMC 2nm-16A roadmap on track.  
• SK Hynix is now ahead of Samsung in HBM, DDR5, 3D NAND and SSD. Meanwhile, Samsung is buying back shares. 

• Kuaishou reported C3Q24 revenue, IFRS operating profit,and IFRS net income in-line with our estimates and consensus.The only negative was that C4Q24 guidance for operating margin missed consensus and our estimate;
• Within mid-sized Internet platforms, Kuaishou lacks fresh secular driver, putting its stock under pressure. Advertising and GMV growth still outpace the industry and some peers. The stock is undervalued;
• We maintain our BUY rating and slightly revised down TP to HK$72 to make up for the higher-than-expected OPEX guidance.

• Haier plans to acquire all shares of Autohome and dismiss 30% of Autohome’s employees.
• In 3Q24, Xiaomi’s revenue grew by 30% YoY or 17% YoY without electric vehicle.
• In 3Q24, Tongcheng Travel’s revenue increased by 51% YoY with gross profit up by 29% YoY.

• NVIDIA this week reported Q3FY25 revenues of $35.082 billion, up 17% QoQ, up 94% YoY and a full $2.5 billion above the guided midpoint.
• Looking ahead, NVIDIA is forecasting revenues of $37.5 billion, up ~7% sequentially. Gross margins to decline slightly to 73%.
• Contrary to Jensen Huang’s vision, the existing $1 trillion worth of data centers do not need to be “modernized” into AI factories. This is pure fantasy. 

• Kioxia plans to complete its IPO on 18 December, valuing Kioxia at 750 billion yen ($4.8 billion), down nearly 50% from the initial market value estimates about 2-3 months ago. 
• Kioxia had revenue of 909.4 billion Yen (up 84.6% YoY) and EBITDA of 449.6 billion Yen in 1H FY24, driven by the recovering demand for data center and enterprise SSDs.
• As of 2Q 2024, Samsung Electronics was the largest player in the global NAND Flash market with a 36.9% market, followed by SK Group (22.1%), and Kioxia (13.8%).

• Kioxia Holdings (285A JP) is scheduled to be listed on 18 December 2024, at the prime market of TSE at an expected valuation of ~$4.9bn.
• The security’s low free float is the main cause of Fast-Entry rejection by both global indices and quarterly exclusion from the one global index.
• Quarterly inclusion to the other global index is forecasted for June 2025 following the 3-month minimum trading requirement. 

• Temasek-Backed 65 Equity Partners bought 13% stake in Tuya, implying a total investment of US$100 million (or S$134M). 
• The fund’s mandate is to support high-growth, mid-cap companies seeking a listing on the Singapore Exchange (SGX).
• The listing will benefit Tuya by providing easy access to capital. Tuya will be able to use stock as a currency to fund its expansion plans in Southeast Asia.

• The opposition’s pushing a Commercial Act amendment, and to gain ruling party support, they might strategically ease up on the dividend tax issue—classic quid pro quo.
• The Samsung family’s collateral risk eased with a 10 trillion won buyback, but local markets are still cautious. Local traders now eye another 10 trillion won shareholder return.
• The timing of the special dividend and tax deadlines may cause mismatches, but we should watch for earlier price moves in Samsung Electronics preferred shares.

• Cuscal (1229Z AU) raised around A$337m (US$218m) in its Australia IPO.
• Cuscal is an authorized deposit-taking institution (ADI) in Australia that primarily provides financial infrastructure and payment services in Australia.
• We have looked at the company’s performance and valuation in our past notes. In this note, we talk about the trading dynamics.

• Nvidia posted earnings yesterday, and guidance was light of buy-side bogeys. I’m not going to step into the mind game of bogeys here, but there are some finer points to focus on.
• NVIDIA reports Q3 EPS $0.81 ex-items vs FactSet $0.75. Reports Q3: Revenue $35.08B vs FactSet $33.17B (2 billion beat like clockwork)
• Q4 Guidance: Revenue $37.5B +/- 2% vs FactSet $37.09B (a bit light). GAAP and non-GAAP gross margins are expected to be 73.0% and 73.5%, respectively, +/- 50 bps. (also light)

• On November 18th, 2024, Temasek-affiliated investment fund 65Equity bought 13% of TUYA, an IOT hardware company and planned to bring the company to list on the Singapore Stock Exchange;
• TUYA is trading at US$901mn market cap, equivalent to 3.2x 12TTM sales. This isn’t cheap. Xiaomi, a high flying stock, now trades at 2.0x 12TTM sales. TUYA is not profitable;
• TUYA is a good and real company but in a bad business. Electronics inventory cycle and advanced stocking for Trump’s Tariff Hike shall support earnings in the next few quarters.

• Globalstar reported strong results for the third quarter of 2024, with notable growth in both revenue and adjusted EBITDA.
• Total revenue grew by 25% from the previous year, reaching a record $72 million.
• Service revenue increased by 28%, primarily driven by wholesale capacity revenue and the recognition of performance bonuses for 2023 and part of 2024.

• IC design firms remain positive about 2025 outlook despite uncertainties for 1Q25, showing resilience in the industry.
• Taiwan evaluates consequences of Trump’s potential revocation of China’s trade status, highlighting potential geopolitical impacts.
• JSR’s construction of new EUV photoresist plant in S. Korea demonstrates commitment to meeting semiconductor demand in the region and globally.

• 65 Equity Partners, a Temasek-backed global investment firm with $3B+ in AUM, took a ~13% stake in Tuya for ~$100M.
• Jerry Wang, Tuya’s CEO and Founder, assumed that Tuya would consider a potential secondary listing in Singapore to strengthen company’s presence in the global capital markets.
• With $1B+ in cash, revenue growth re-acceleration, non-GAAP op margin break-even and turnaround plan, I have a positive view on the stock longer-term.

• Monolithic Power Systems (MPS) recently reported a robust performance for the third quarter of 2024, epitomizing significant revenue growth and diversification across its product portfolio.
• The company attained a record quarterly revenue of $620.1 million, marking a 22% increase from the previous quarter and an impressive 30% growth year-over-year.
• This growth trajectory is attributed to MPS’s advancing market strategy diversity and the beneficial onset of revenue steams from past design wins.

• Synaptics Incorporated’s recent earnings call provided a detailed overview of their first-quarter fiscal year 2025 performance, highlighting both positive and challenging aspects of their operations.
• A positive takeaway from the call is the company’s solid financial performance in the quarter.
• Revenue increased by 8% year-over-year to $257.7 million, surpassing the midpoint of guidance.

• RingCentral’s third quarter 2024 results reflected a solid performance, demonstrating strength both in traditional business segments and new product areas.
• The revenue exceeded guidance, supported by continued growth in the Unified Communications as a Service (UCaaS) sector and strong contributions from new products like RingCX.
• This performance aligns with RingCentral’s strategic focus: further solidifying its UCaaS leadership, expanding total addressable market (TAM) through new AI-powered offerings, and enhancing reach through partnerships and geographic expansion.

• There will be 8 additions and 8 deletions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the next rebalance to be implemented at the close on 12 December.
• Most of the inclusions were forecast but there is a lot of variance among the list of deletions… index committee knows best!
• Fadu (440110 KS) was ignored for yet another rebalance, while Snh Inc (051980 KS) has also not been included in the index.

• Tuya Inc (TUYA US/2391 HK), a leading IoT cloud platform in China, was listed on the 18th March 2021 at US$21.00/ADS. The share price is currently down 92.5%. 
• Tuya subsequently established a primary dual-listing in Hong Kong on the 5th July 2022, priced at HK$19.30/share. Those shares are down ~23% 
• Temasek-Backed 65 Equity Partners has now acquired a 13% stake (equivalent to ~6.2% of the voting rights) in Tuya, with a view to establishing a secondary listing on the SGX.

• Hong Kong is again trading well below its historical multiple valuation levels after the October/November correction.  Mainland investors bought a record amount the day after Trump’s win.
• Kingsoft Corp (3888 HK) reported consensus beating results with its online game segment surging.  The company is benefiting from AI upgrades in its office SAAS business.
• Precision Tsugami China (1651 HK) posted blockbuster earnings for its 1H25 as the machine tool sector rebounds on the back of factories upgrading to intelligent manufacturing.

• On 18 November, it was announced that 65 Equity Partners (backed by Temasek) will invest US$100 million (S$134 million) for a 13% stake in Tuya Inc (TUYA US). 
• Net cash as a percentage of market cap is currently at 92%. Tuya’s sales growth and improvement in operating margin in 1Q-3Q 2024 have also been impressive this year.
• Comps are trading at average EV/EBITDA of 13.7x in 2025 versus 2.3x for for Tuya. If Tuya continues its turnaround, its valuation gap versus its peers could decrease further. 

• Qualcomm is aggressively pushing into the PC market, aiming to transform its identity from a mobile chip giant to a diversified computing powerhouse.
• At its recent investor day, Qualcomm announced bold revenue projections of $4 billion from PC chips by 2029, alongside significant strides in automotive, industrial IoT, and XR markets.
• This marks a pivotal moment as Qualcomm ventures beyond its traditional smartphone business, which currently accounts for 75% of its chip revenue.

• Xiaomi reported CY3Q24 revenue, non-IFRS EBIT and non-IFRS net income 4.7%, 7.8%, and 16.6% vs. consensus. 
• C4Q should be even stronger, as (1) appliance subsidy drive IoT revenue and margin improvement, (2) SU7 production output ~doubles
• We reiterate Xiaomi as our TOP BUY idea and raise Xiaomi’s TP to HK$ 33 to reflect the improved profit outlook. Our TP implies 26.6x CY25 P/E.

• Harmonic reported record results for the third quarter of 2024, with total company revenue and profitability exceeding expectations.
• The company’s Broadband and Video segments both contributed significantly to this performance, showcasing strong execution on business plans.
• The Broadband revenue reached $145.3 million, marking a 92% year-over-year increase and a 56% sequential increase.

• Hang Seng Index (HSI INDEX) implied volatility fell across the term structure and skew. The skew displays a smile favoring specific option strategies.
• The most traded HKEX traded tailor-made combinations are Call and Put Spreads. Straddles, Strangles and Butterflies have become less popular most recently.
• While three quarters of all strategies take a long volatility position, there is a balance in bullish, bearish, and market-neutral strategies.

• Ziff Davis reported its financial performance for the third quarter of 2024, highlighting several strategic advancements and financial outcomes.
• Total revenue grew by 3.7% compared to Q3 2023, reaching $353.6 million.
• Adjusted EBITDA increased more significantly, by 9.6%, reflecting a focus on operational efficiency and cost management that resulted in a higher adjusted EBITDA margin of 35.3%.

• Lightspeed Commerce Inc. reported its fiscal Q2 2025 earnings, showcasing robust performance with a 20% year-over-year increase in total revenue to $277.2 million, surpassing their projected range of $270-$275 million.
• This growth was driven by a significant rise in payment services penetration and effective cost control measures, resulting in a record adjusted EBITDA of $14 million, up from breakeven in the same quarter last year.
• Furthermore, Lightspeed’s trailing 12-month revenue exceeded $1 billion, demonstrating positive momentum for the company as it celebrates its 20th anniversary.

• The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
• The indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.
• In this insight, we take a look at our updated flow estimates for December 2024. Separately, we have also presented our latest March 2025 index review predictions.

• 3Q25 (Oct-25) 5% above Consensus, Hopper growing incl H200, no Blackwell revenue. 4Q25 (Jan-25) guidance inline with Consensus but Nvidia has beat guidance for 8 quarters.
• Jan-25: Blackwell revenue “several billion dollars”. Supply keeps to increase but supply constraints. GM will moderate to low-70% during Blackwell ramp due  but will stabilize at mid-70%.
• The stock is not expensive, trading at its average multiples since 2019: 51x trailing EPS, 34x forward EPS. These multiples are high in an absolute sense, but average for NVDA.

• Both online marketing and “other revenues” grew strongly in 3Q24.
• Both the gross margin and the operating margin improved over the same period last year.
• We believe total revenue will accelerate when live streaming is not significant and margins will rise when e-commerce makes profit.

• QCOM estimates ~5% Android revenues growth Cagr to FY29, Automotive 22%, IoT 21%. If QCOM keeps Apple business, revenue Cagr will be 9% to FY29. If QCOM loses it: 6%.
• Mngt forecasts high Opex control, target at 22% of revenue, which looks aggressive. Opex reached 31% in FY23-24 . At 22% Opex, Operating Profit would grow ~13% Cagr to FY29.
• Android growth looks low, Opex control demanding. As such, we could conclude that 10% Operating Profit Cagr is more likely than 13%. Even with lower growth, the stock is cheap. 

• Freee KK (4478 JP) offers cloud-based online accounting and HR/Payroll software to small and medium businesses (SMBs) in Japan. The company operates a subscription-based revenue model.
• Freee reported its first-ever profits recently and we expect continued improvement in freee’s profitability driven by its strong business model vs MF whose business model has started to breakdown.
• Freee’s current valuation multiples are cheap and there is significant upside to the current share price, hence we recommend making an entry.

• NetEase reported C3Q24 revenue, GAAP operating profit and GAAP net income in line, (3.6%) and (5.3%) vs. our estimates, and in line, (4.4%) and (5.0%) vs. consensus. 
• Mobile game revenue decline is less a concern due to imminent pipeline launches, but PC game’s significantly beat is a positive surprise. 
• We raised the TP to US$118 for the better outlook of new game launches.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Health and Happiness (H&H), Yinson Production, Xiaomi Corp, ReNew Energy
• In the US, October housing starts declined 3.1% m-o-m to an annualised 1.31 mn units (-1.5% e / -1.9% revised p), the slowest pace in three months as builders put off projects in the wake of hurricanes Helene and Milton.
• Meanwhile, October building permits (a proxy for future construction) eased 0.6% m-o-m to an annualised 1.42 mn units.

• Dynatrace reported a strong performance in its second quarter of fiscal 2025, showcasing solid financial results and effective execution of its strategic initiatives.
• The company posted an annual recurring revenue (ARR) increase of 19% year-over-year to $1.62 billion, propelled by robust expansion bookings, especially in Europe, and an improvement in booking seasonality related to a switch to 6-month sales compensation cycles.
• Subscription revenues grew by 20% year-over-year, further supporting the company’s financial momentum.

• EPAM Systems, Inc., a global leader in software development and digital platform engineering services, reported its third-quarter 2024 results, which were stronger than analysts anticipated.
• The company demonstrated revenue growth on both a year-over-year and sequential basis, signaling potential stabilization in the market.
• This growth was primarily fueled by increased customer engagement across various verticals, notably in life sciences and healthcare, financial services, software, and biotech.

• Datadog’s third quarter 2024 financial results indicate continued growth and expansion in their operations, though there are a mix of positive and challenging elements to consider.
• Revenue for the quarter was $690 million, representing a 26% increase year-over-year and surpassing the high end of the company’s guidance.
• The company added about 2,400 customers over the past year, reaching a total of approximately 29,200.

• HKBN Ltd (1310 HK), a Hong Kong broadband play, is never short on privatisation rumours. China Mobile (941 HK) is reportedly (again) holding talks with HKBN’s major shareholders. 
• China Mobile is a logical suitor. I highly doubt a non-PRC (government-affiliated) corporation would be permitted to take HKBN private.
• Previous takeover rumours over the years came to nought. It may be different this time. HKBN was suspended this morning pursuant to the Takeovers Code.

• With the review period nearly complete, there could be one change for the S&P/ASX 50 Index and one change for the S&P/ASX 200 (AS51 INDEX) in December.
• Both deletes are also deletions from a global index next week and there could be short-term buying/covering opportunities on a drop in the stock price.
• There has been a buildup of cumulative excess volume in all stocks over the last few months. There has been no increase in positioning in CAR Group (CAR AU) recently.

• Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 December.
• With no increase in the number of index constituents this calendar year, there could be inclusions in December. The process of getting to 100 index constituents could drag into 2026.
• Short interest is especially large in Sinotruk, Giant Biogene, Kuaishou Technology, ASMPT and JD Logistics and inclusion could set off some short covering.

• Amid Samsung Electronics announcing a huge buyback of 10 trillion won, one of the issues that has resurfaced is the potential sale of Samsung Electronics by Samsung Life Insurance.
• The total amount of Samsung Electronics that could be sold by Samsung Life Insurance and Samsung F&M Insurance is 25.6 trillion won (at current prices). 
• We remain Positive on Samsung Electronics. The 10 trillion won buyback program is a positive sign on the company’s willingness to provide higher shareholder returns.

• It has been a relatively quiet week.
• Bitcoin has outperformed much of the market, resulting in an increase in its dominance, as highlighted in Thursday’s Crypto Moves #52.
• This was most likely driven by the intense buying pressure from MicroStrategy over the past week.

• Nagarro SE (NA9 GR) is in discussions for a potential delisting and takeover, with private equity firm Warburg Pincus reportedly considering a buyout.
• Strong Financial Growth: Q3 2024 revenue rose by 3.7% to €242.9M, with a 5.6% constant currency growth, adjusted EBITDA improving to €34.6M (14.3% of revenue).
• Nagarro trades at a P/E ratio below peers, suggesting undervaluation despite financial resilience, strong liquid assets, and 14% stock price growth over the last eight trading days.

• Spotify Technology S.A. delivered a mixed set of results for the third quarter of 2024, showcasing both achievements and continued challenges as the company navigates through its business strategy.
• On one hand, it marked a milestone by delivering strong growth metrics in both subscribers (net addition of 6 million to reach a total of 252 million) and monthly active users (MAU, rising by 14 million to 640 million).
• These metrics exceeded Spotify’s guidance and reflect its dual focus on product innovation and marketing efficiency.

• NVIDIA, the undisputed leader in AI-driven GPUs, is currently navigating turbulent waters with its latest Blackwell architecture chips.
• While the company has been riding high on record-breaking revenues and a surging demand for AI compute power, reports of overheating issues in Blackwell chips have cast a shadow over its otherwise stellar growth trajectory.
• According to recent disclosures, these state-of-the-art GPUs face severe thermal management challenges when configured in server racks holding up to 72 units.

• Soitec is a leading supplier of specialty engineered wafers for semiconductor manufacturing, particularly in smartphone RF applications.
• The company experienced a downturn in the smartphone market and covid-related inventory corrections but is poised for growth as chip complexity and demand for their products increase.
• Soitec is expanding their market with silicon carbide (SiC) wafers for EVs, which could significantly boost earnings by 2025/2026, with a price target of €175 over 1.75 years and a 70% upside potential for investors.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

The delay of a major contract inevitably has an impact on short-term profitability. Solid State has a strong balance sheet and a growth strategy to develop into a higher value-added electronics components and systems business, as witnessed by the two recent small acquisitions. Post the current hiatus we expect this to drive growth and value creation.

• The market’s reaction to Samsung Fire’s stake sale seems overhyped. Given past share sales, Life may outperform Fire as this momentum unfolds.
• I don’t see SDS merging with Samsung Electronics. It lacks synergy and could stir up PR issues. If Sammy’s stock stalls, Lee Jae-yong might sell more of his SDS stake.
• I’m still bullish on Sammy prefs. If the tax reform passes, a special dividend, not a buyback, will be the cleanest way for Samsung to address inheritance tax.

• There are 15 changes for the TIP Taiwan Value High Dividend Index in November. The Yuanta Taiwan Value High Dividend ETF (00940 TT) has an AUM of US$5bn.
• Estimated one-way turnover is 26% and there are 16 stocks with over 4 days of ADV left to trade. The rebalance commenced yesterday and will end on Friday.
• An equal weighted basket of inclusions has outperformed an equal weighted basket of deletions since July. That could continue over the week as the ETF continues to rebalance their portfolio.

• In this insight, we take a look at our final expectations for index changes for ASX200, 100, 50, and 20 in the run-up to the December 2024 index rebal event.
• We do not see any index changes for ASX 20 and ASX 100.
• We expect one change for ASX 50 and one change for ASX 200.

• Bloomberg reports that China Mobile (941 HK) is exploring a buyout of HKBN Ltd (1310 HK) and is willing to pay at least HK$5.00, a 16.0% premium to last close.  
• HKBN has been the subject of numerous bid rumours, which seemingly came to nothing due to the challenge of meeting the largest shareholders’ (TPG and MBK) price expectations. 
• The rumoured offer price will struggle to gain TPG/MBK’s backing. The current valuation is unappealing, as HKBN trades at a premium multiple compared to peers at the last close. 

• Korea Exchange (KRX) plans to make special changes to the Korea Value-Up Index constituents on 20 December.
• We believe that following five stocks are likely inclusions in the Korea Value Up index rebalance on 20 December (KB Financial, Hana Financial, SK Telecom, KT Corp, and LG Electronics).
• The new companies that will be included in the Korea Value-Up Index include companies that provide detailed corporate value up plans by 6 December.

• Nvidia’s Blackwell rack design overheating issues causing potential shipment delays
• AMD leading server market in 3Q24, Intel fighting back in PC market
• Trump’s tariff changes impacting Chinese EV makers, with 4 strategies to navigate the changes. Huawei and Xiaomi dominate China’s AI smartphone market with over 50% market share.

• Fortinet’s third-quarter financial results for 2024 showcase robust performance and a strategic focus on growth markets in the cybersecurity landscape.
• The company’s total revenue grew by 13%, a return to product revenue growth bolstered by strong service revenue expansion.
• Fortinet’s strong execution led to record gross and operating margins, with the latter increasing by 830 basis points to over 36%.

• Hong Kong market sectors outperforming since the stimulus in September are Consumer Discretionary and Healthcare as Utilities, Telecom and Energy lag.
• CRRC Corp Ltd H (1766 HK) gets BUY recommendations as its results point to continued strength in the rail equipment sector with passenger volume surging.
• Tencent Music Entertainment Group (1698 HK) reported solid results as it shifts to a pay-to-stream subscription model. Xiaomi Corp (1810 HK) had a blowout quarter with EV sales surging.

• IonQ, Inc., a leading company in the quantum computing space, reported its results for the third quarter of 2024, showing considerable progress both financially and operationally.
• The company recognized $12.4 million in revenue for the quarter, surpassing its guidance range of $9 million to $12 million.
• This marks a year-over-year doubling of third-quarter revenue, highlighting robust growth and demand for IonQ’s quantum computing services.

• Rapid7’s financial performance in the third quarter of 2024 demonstrates both strengths and challenges in its business operations, as outlined during their earnings call.
• Starting with the positive aspects, Rapid7 ended the quarter with an annual recurring revenue (ARR) of $823 million, representing a 6% year-over-year growth.
• This ARR growth was primarily driven by their threat detection and response sector, which continued to show robust double-digit growth.

• On Friday 15 November, KKR announced it would launch KKR Tender2 to buy the rest of FujiSoft not purchased in KKR Tender1. Their new price is ¥1 higher than Bain’s.
• Fuji Soft Inc (9749 JP) announced (J) it supported the KKR2 Tender and rejected the Bain TOB Proposal. KKR1 shareholders are “made whole” at ¥9,451/share. Minimum is 53.22%.
• The document, however, is a Governance Disaster – an absolute shambles, effectively gaslighting investors at every turn. And now investors can see it was problematic from the start.

• TSMC cash dividend has increased by 65% in 2 years or NT$2.75 in 4Q22 to NT$4.50 in 3Q24. It will keep increasing.
• TSMC is spinning cash. 2nm-16A could increase Capex intensity but still we estimate that quarterly dividend can increase to NT$5.50 in 2025 and NT$6.00 in 2026.
• Consensus forecasts similar EPS growth for TSMC and ASML: 30% in 2025, 20% in 2026. TSMC is 50% cheaper than ASML. 2025 PEx: TSMC 18x and ASML 28x.

• TSMC: +16.7% Premium; Further Market Weakness Could Soon Open Up Good Long Level
• UMC: -2.1% Discount; Good Level to Go Long the ADR Spread
• ASE: -0.1% Discount; Premium Completely Broken Down & Local Short Interest Continues to Surge

• Hon Hai, Pegatron, and Quanta Gear Up for Potential U.S. Investment Surge Amid Trump Policy Speculation
• PC Monitor: Asustek & Lenovo Signal Strong PC Growth, AI PC Expansion in Process
• Semiconductor Memory Q324 Revenue Close To Historic Highs Even As Decoupling Intensifies 

• TSMC: more restrictions on export to China. TSMC can’t make 2nm in US before 2028-29. Lawsuit in Arizona.
• Korea: special chips act to give chipmakers subsidies and an exemption from a national cap on working hours. Korean engineers only work 52 hours / week. That’s a problem.
• Amazon more in-house AI chips. Super Micro trying to avoid delisting. Smartphone ASP keep increasing because chip prices are increasing (ie Mediatek, Qualcomm). AI PC reaching 20% in 3Q214. 

• Asustek Guides for 20%+ YoY PC Revenue Growth in 4Q24E;  Lenovo Delivers 17% YoY PC Revenue Growth in CY3Q24
• AI PCs: A Multi-Year Upgrade Cycle with Rising Average Selling Prices; AI PCs 80% of the PC Market by 2027E
• Maintain Structural Long View for AI PC Up-Cycle; Asustek, Acer, & Lenovo Well-Positioned Through 2025E

• Cuscal (1229Z AU) is looking to raise A$337m (US$218m) in its Australia IPO.
• Cuscal is an authorized deposit-taking institution (ADI) in Australia that primarily provides financial infrastructure and payment services in Australia.
• In this note, we look at the updates since our last look-through and share our thoughts on valuation.

• Pony AI (PONY US), an autonomous mobility solutions provider, is looking to raise up to US$195m in its US IPO.
• As per Frost & Sullivan, Pony AI was among the first companies in China to obtain licenses to operate fully driverless robotaxis in all four Tier-1 cities in China.
• We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.