TMT/Internet

• TSMC: +16.1% Premium; Strong Spread Rebound, Potential Opportunity to Short the Spread
• UMC: +1.6% Premium; Consider Shorting the Spread at This Level
• ASE: +3.8% Premium; Uncertainty Remains on the Sustainability of the Recent Breakdown

• Last Week — TSMC’s July Revenue Soared, Asustek Guided for PC Growth Acceleration, While KYEC, Mediatek, and UMC Rebounded
• Key Events — This Week Look to Hon Hai & Zhen Ding Earnings and Guidance for Servers, AI PCs/Mobiles, iPhone 16
• PC Monitor: Promising Uptake of Microsoft Copilot and AI Services; Remain Structurally Long 

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• We provide updates on recent results for Plover Bay Technologies (1523 HK) and upcoming H1 results for the Philippines names. 

• Trend Micro Inc (4704 JP) shares rose 14.8% on Friday after Reuters reported that it is exploring a sale after attracting buyout interest. 
• The interest is unsurprising due to the weak share price. Since ValueAct disclosed a stake on 8 August 2022, the shares are down 0.7% vs the Nikkei 225’s 23.6% increase.
• The lack of a controlling shareholder and increased cybersecurity M&A activity support the buyout interest. A privatisation price is likely to be around JPY9,000. Valuation is undemanding at last close.

• Strong Revenue Growth Signals Robust Demand in PC and Server Markets for Asustek and Acer
• Asus Management Continues to Describe Multi-Year PC Growth Cycle Ahead; 3Q24 Will Be Start of ‘New Product Lifecycle’
• Visit to Guang Hua Digital Plaza to Review New PC Models First-Hand. Remain Structurally Long PC Makers; Acer, Asus, Dell.

• I tally 46 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Three new deals were discussed this week on Smartkarma: KKR’s tilt for Fuji Soft (9749 JP); and Itochu’s Tenders Offers for Descente (8114 JP) and C.I. TAKIRON Corporation (4215 JP).
• Key updates took place on Pacific Smiles (PSQ AU), Greatview Aseptic Packaging (468 HK), L’Occitane (973 HK), Fancl Corp (4921 JP), Shinko Electric Industries (6967 JP), and Isetan Singapore (ISET SP).

• Consolidated financial results for 1H FY12/24: Sales JPY26.2bn (+54.1% YoY), Operating profit JPY5.8bn (+229.4% YoY), Net income JPY3.7bn (+222.4% YoY).
• Segment sales in Q2: Memory probe card sales JPY12.4bn (+124.1% YoY), Non-memory probe card sales JPY1.3bn (+66.8% YoY).
• Full-year FY12/24 forecast: Sales JPY55.0bn (+43.6% YoY), Operating profit JPY11.6bn (+118.4% YoY), Net income JPY8.3bn (+101.1% YoY).

• The second quarter 2024 financial results for Amazon.com Inc. showcased both growth and challenges as the company continues to navigate a complex global economic environment.
• Overall, Amazon.com reported an 11% year-over-year increase in revenue, totaling $148 billion, which excludes the effects of foreign exchange rates.
• The operating income notably increased by 91% year-over-year to $14.7 billion, and the free cash flow adjusted for leases surged by 664% to $51.4 billion.

• Motorola Solutions has posted a robust performance in its second quarter of 2024, reflecting notable strides in revenue and earnings amidst varied operational outcomes.
• The company demonstrated a commendable 9% revenue growth, surpassing their initial projections, primarily fueled by significant contributions across all three technological divisions despite facing headwinds such as a $5 million impact from foreign exchange rates.
• In the breakdown of revenues, the Products and Systems Integration (SI) segment witnessed a substantial 15% increase, buoyed by robust demand and improved supply chain conditions for Land Mobile Radio (LMR) products.

• Sales grew 2.4% YoY to JPY55.2bn, with Accounting Firm segment up 3.4% YoY and Local Government segment up 0.5% YoY.
• Operating profit increased 1.9% YoY to JPY13.6bn, with Accounting Firm segment up 2.1% YoY and Local Government segment up 6.4% YoY.
• Net income attributable to owners of the parent decreased 0.7% YoY to JPY9.7bn, despite overall sales and operating profit growth.

• Apple reported an impressive fiscal third quarter with revenue reaching $85.8 billion, marking a 5% year-over year increase and setting a new record for the June quarter.
• This growth in revenue was accompanied by a double-digit increase in earnings per share (EPS) to $1.40, also a record for the period, reflecting robust financial performance amidst challenging market conditions.
• On the product forefront, iPhone sales were slightly down by 1% at $39.3 billion compared to last year, although there was growth on a constant-currency basis.

• A Reuters article overnight says Trend Micro might be up for sale. This caused the ADRs to jump 10% overnight. The remaining co-founders are 65 and 70 this year. 
• The stock has effectively gone sideways the last few years as Value Act has been activisting. Now one has to exercise one’s imagination to think about a possible sale price. 
• On a DCF basis, a PE fund couldn’t reasonably do this. Multiples are too high. That means a strategic buyer would be more likely. But Who? Why? And How much?

• Reddit (RDDT US) is ineligible for inclusion for the upcoming August review because of fcap failing the fcap threshold if it qualifies for the standard segment. 
• Reddit (RDDT US) is ineligible for inclusion for the upcoming September review because of failing the minimum public voting rights threshold.
• The IPO lock-up expiry increases the probability for inclusion in November and December review for US and Global indices. Forecasted demand in December is ~$360m and 2.1 ADV. 

• FY03/25 forecast: Revenue JPY2.30tn (+25.6% YoY), Operating profit JPY627.0bn (+37.4% YoY), Recurring profit JPY630.0bn (+36.0% YoY).
• R&D investment plan: JPY1.5tn over FY03/25–FY03/29, with JPY253.0bn in FY03/25 for new development buildings and equipment.
• Shareholder returns: JPY319.8bn total, including JPY79.9bn for share buybacks and JPY239.8bn for dividends.

• TSMC achieves record-breaking performance in July thanks to high demand from key clients like Apple, Intel, and Nvidia.
• Chang Wah Electromaterials appoints new CEO and plans a major US$100M expansion in Malaysia through CWTC.
• South Korean micro LED component makers target the backplane market with AI-driven AR and VR technologies gaining popularity, while Taiwan’s PCB sector faces sustainability challenges in Southeast Asia.

• Expected sequential revenue growth of 13% to 15%, gross margin expected between 18% and 20%.
• The company has not increased capacity utilization through price cuts but supports customers in facing competition to maintain market share.
• Inventory replenishment behavior will end in the third quarter, and fourth-quarter orders will more accurately reflect actual demand rather than the impact of restocking.

• Q1 revenue increased by 27.4% YoY to JPY839mn, achieving an operating profit of JPY40mn and a recurring profit of JPY49mn.
• Revised FY03/25 forecast: revenue JPY3.7bn (+16.1% YoY), operating profit JPY200mn, recurring profit JPY200mn, net income JPY13mn.
• Company recorded JPY150mn in tender offer-related expenses in Q1 and will not distribute an annual dividend for FY03/25.

• In evaluating Cognizant Technology Solutions’ performance for the second quarter of 2024, several important factors come to the forefront, presenting a mixed picture of the company’s financial health and operational execution.
• The company, driven by strategic acquisitions and improved operational efficiency, posted better-than expected revenue and margin figures, but has notably seen year-over-year revenue decline and continuous pressure in certain industry sectors.
• Positively, Cognizant’s revenue in Q2 amounted to $4.85 billion, surpassing the high end of their guidance range and marking a 2.1% sequential growth in constant currency, the highest since 2022.

• CDW’s earnings for the second quarter of 2024 indicated a cautious consumer behavior resulting in elongated sales cycles and a preference to prioritize immediate needs over expansion endeavors.
• CDW has witnessed a hesitation in capital investments, particularly those tied to data center and network modernization, alongside a significant interaction with client device refresh activities.
• Additionally, unexpected market-specific dynamics, such as escalated challenges in the UK market and concerns around federal funding in the US, were cited as influencing factors.

• Revenue for Q1 FY03/25 was JPY12.1bn (+27.2% YoY), with operating profit at JPY1.1bn and recurring profit at JPY1.3bn.
• Electronic Materials segment revenue increased 32.7% YoY to JPY7.2bn, with an operating profit of JPY488mn (loss of JPY260mn in Q1 FY03/24).
• Display Materials segment revenue increased 75.9% YoY to JPY1.3bn, with an operating profit of JPY515mn (+309.9% YoY).

• Sales reached JPY27.6bn (+5.4% YoY), driven by mobile batteries, AC chargers, and beauty appliances from Tescom Denki Group.
• Operating profit was JPY2.5bn (-25.2% YoY) due to a rise in SG&A expenses despite higher gross profit.
• B2C sales were JPY18.8bn (+12.6% YoY), with e-commerce sales at JPY4.9bn (+21.5% YoY), and B2B sales at JPY8.8bn (-7.3% YoY).

• Barito Renewables Energy (BREN IJ) is down 19% in the past month. But still accounts for ~730% of parent Barito Pacific (BRPT IJ)‘s market cap. Still unsustainable.
• Preceding my comments on the Barito complex AND the Kyocera Corp (6971 JP) / KDDI Corp (9433 JP) Holdco, are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation (sub/parent) >20%.

• KKR has announced its previously leaked takeover of Fuji Soft Inc (9749 JP). Two activists with 30+% between them have agreed to tender at ¥8,800.  
• Given what the founder, crossholders, and other arbs own, this gets done easily. Congrats on the win to the activists. 
• We will see more activism and more pressure on under-earning companies to go private to clean themselves up outside the public eye. Big opportunities for years.

• Amidst the volatility in the Japanese yen, companies like Money Forward, with a strong domestic revenue base and minimal exposure to forex risk, present an attractive investment opportunity.
• Despite broader market uncertainties, Money Forward continues to demonstrate impressive growth, with its corporate ARR surging by 38% YoY in the most recent quarter, signaling sustained momentum.
• The recent agreement to divest 49% of its non-core B2C segment, Money Forward ME, underscores the significant undervaluation of its core operations. 

• Following media reports, Fuji Soft Inc (9749 JP) announced a pre-conditional tender offer from KKR at JPY8,800 per share, a 1.0% discount to the last close price of JPY8,890 (8 August).
• The pre-condition is approvals under competition laws of Japan, Vietnam and possibly Belgium. The offer is anticipated to commence in mid-September.
• The offer is a knockout bid and the culmination of an auction process. The board’s recommendation and the irrevocables from activist shareholders ensure this deal is done.

• TSMC’s new plants will increase its production capacity for 3-nm chips, aiming to triple output this year. Global market share stands at 18%.
• Major tech companies’ increased AI investments are driving demand for TSMC’s advanced semiconductors, crucial for AI and machine learning applications. 
• TSMC’s automotive solutions output is expected to grow at a 50% CAGR through 2024, addressing global chip shortages in the auto industry.

• In this insight, we take a look at the potential index changes for F100 and F250 in the run-up to the September 2024 index rebal event.
• There could be up to three M&A-related intra-review changes in the next few weeks.
• Apart from that, there could be two changes for the F100 index and two other changes for the F250 index during the September 2024 review.

• Super Micro Computer, Inc. has garnered attention with its strong financial performance in Q4 2024, reporting record revenue growth driven by its AI server and data center infrastructure solutions.
• The company’s transition to direct liquid cooling (DLC) technology and AI-focused strategies have positioned it as a key player in the rapidly evolving technology landscape.
• With a 143% year-over-year revenue growth to $5.31 billion, SMCI has demonstrated its capability to scale and meet the increasing demand for AI infrastructure.

• Acer’s subsidiaries are driving growth, providing resilience and optimism in the face of shifts in the PC market.
• China’s smartphone industry is experiencing a boom in the second quarter of 2024, indicating strong potential for growth.
• A potential US ban on Chinese vehicle technology could deepen the technology rift with lasting effects, impacting various industries.

• King Yuan Electronics Co, Ltd. (2449 TT)‘s 2Q24 revenue/GM/OPM/EPS were NTD$9,035mn/40.5%/29.8%/NTD$2.2.
• The main reasons of revenue growth shall be the AI aspects, especially the contribution from NVIDIA Corp (NVDA US).
• For the upcoming 3Q24, we are keeping a relatively strong confidence of 5-10% growth rate for KYEC.

• Revenue for 1H FY12/24 was JPY8.4bn, with an operating loss of JPY44mn and pre-tax profit of JPY16mn.
• Cloud services revenue increased 63.4% YoY, while packaged systems revenue decreased 6.2% YoY.
• Full-year FY12/24 earnings forecast revised: pre-tax profit to JPY100mn and profit attributable to owners of the parent to JPY90mn.

• There are 44 adds/41 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. There are stocks with multiple days ADV to trade.
• Based on the adds, deletes and capping changes, we estimate one way turnover of 7.9% and a round-trip trade of JPY 880bn (US$6bn).
• The adds have outperformed the deletes over the last year though that has been faded over the last couple of months. Breaking with history, there could be outperformance near-term.

• Nikkei and Bloomberg report that Fuji Soft Inc (9749 JP) will be privatised through a KKR-sponsored MBO at a price just below JPY9,000, a 21.8% premium to the last close.
• The rumoured privatisation proposal is the culmination of a sale process initiated by 3D Investment Partners, the largest shareholder, in September 2023.
• The Board will meet tomorrow to discuss the proposal. The rumoured offer represents an all-time high and a knockout bid, suggesting a done deal if a binding proposal materialises.

• Cap Gemini SA (CAP FP) is estimated to be excluded from the selection list in the long-run due to being pushed way above 60% coverage in the Technology sector.
• Merck KGaA (MRK GR) switches between in and out of the selection list because it fluctuates close to the 60% coverage of the Health Care sector.
• Nokia OYJ (NOKIA FH) has a higher probability of deletion from SX5E if Merck KGaA (MRK GR)  qualifies to the selection list. Forecasted passive fund supply is  ~15 ADV.   

• Palantir Technologies continues to establish itself as a leading force in the world of data analytics and artificial intelligence.
• The company’s recent financial results reveal a mixed but overall positive picture, showcasing strong revenue growth and solidifying its position as a key player in both the government and commercial sectors.
• Palantir’s focus on leveraging AI to solve complex problems at scale is clearly paying off, with impressive strides in revenue and customer acquisition.

• Last year into early 2024, Fuji Soft Inc (9749 JP) – partially at the prodding of 3D Investment Partners – took in 4 subs and conducted a strategic review.
• In January, I explored the situation here suggesting the stock had run, FujiSoft needed to liquidate more assets, but a PE firm would look at a valuation of ¥600bn.
• Last night, the Nikkei reported that US PE Firm KKR planned to take Fuji Soft private with a TOB valued at ¥600bn. Limit up will take us to ¥560bn+.

• In this insight, we provide an update on the K Bank IPO, which is more likely in 1H 2025. K Bank is one of the largest Internet-only banks in Korea. 
• A successful IPO of K Bank could have a positive impact on KT Corp (030200 KS) which is the indirectly the largest shareholder of K Bank. 
• K Bank had total operating income of 51.5 billion won (up 328% YoY) in 1Q 2024. Operating margin improved materially from 5.7% in 1Q 2023 to 19.5% in 1Q 2024.

• Given market concerns that AI is overhyped and not yet delivering sufficient value, we analyze Microsoft’s Copilot disclosures and examine signs of AI services traction among corporate clients.
• Signs indicate that Copilot is gaining substantial traction with corporate clients, adding value to software development, business operations, and healthcare documentation functions.
• The number of organizations paying for MSFT’s AI services is expanding rapidly. We view this as a promising indicator of increased AI adoption and substantial value creation.

• Black Sesame Technologies (BLACKSES HK) raised around US$133m in its Hong Kong IPO, after pricing its IPO at the low-end.
• Black Sesame International Holdings (BSIH) is an automotive-grade computing SoC and SoC-based intelligent vehicle solution provider.
• We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

• Apple achieved a record $85.78B in Q3 revenue, up 5% YoY, and earnings per share rose 11% to $1.40, exceeding expectations and reflecting strong financial health. 
• IPhone revenue was $39.3B, surpassing the $38.81B estimate. Despite a 1% YoY decline, iPhone sales showed growth on a constant currency basis, contributing significantly to overall revenue.
• Services revenue reached a record $24.2B, growing 14% YoY. The gross margin was 46.3%, slightly above estimates, despite challenges from foreign exchange and product mix changes.

• Airtel Africa is undervalued and has potential for upside growth
• Company has shown strong performance in revenue and EBITDA growth despite challenges
• Potential IPO of mobile money business could unlock more value for shareholders

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.

• NVIDIA Corp (NVDA US) and Apple (AAPL US) switched positions in June setting off huge flows. Those flows could reverse in September if the current index methodology is used.
• To avoid frequent reverse turnover, S&P DJI have started a market consultation to change the index weighting methodology. We believe feedback will be positive and the proposals will be approved.
• Apple (AAPL US) will have inflows in September while there will be outflows from Microsoft Corp (MSFT US) and NVIDIA Corp (NVDA US). 

• Palantir Technologies Inc. provides software solutions for government customers in national security and intelligence
• Facing competition in AI products in the commercial sector, which may affect stock performance
• Company founded in 2003, known for utilizing technology to extract insights from data for government operations, with significant impact on Western society.

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 2Q24 revenue was NT$15.3bn, 1.6% QoQ and -14.4% YoY. GM in 2Q24 was 32.3%, -5.8% QQ and -14.3% YoY. OPM in 2Q24 was 22.0%, -16.3% QoQ and -24.1% YoY.
• The widespread adoption of AI-driven electronic devices, along with the onset of the AI-powered device replacement cycle, is likely driving increased demand for peripheral ICs and sensors. 
• With inventory levels gradually depleting and downstream customers ramping up production capacity in 2025, the semiconductor industry is expected to recover in 2H24 and maintain an optimistic outlook for 2025.

• WeRide Corp (WER CH) is looking to raise around US$300m in its upcoming US IPO.
• WeRide provides autonomous driving products and services from L2 to L4 of driving automation.
• We had looked at the firm’s past performance in an earlier note. In this note, we will undertake a peer comparison.

• Horizon Robotics, a leading provider of ADAS and AD solutions for passenger vehicles, plans to raise up to $500M in Hong Kong IPO.
• I expect Horizon Robotics will price its IPO below last round valuation of ~$8.7B as revenue growth will slow below 50% y/y in 2024, down from 71% y/y in 2023.
• The company’s key competitors, including Mobileye and Microchip Technology, revised their revenue guidance downwards for the second half of 2024.

• Amid recent market turmoil, we believe that SK Telecom could be a solid blue-chip, defensive Korean stock that could outperform the market in the next 6-12 months.
• SK Telecom reported better than expected profits in 2Q 2024. The company’s sales were 0.5% higher than the consensus and its operating profit was 3.9% higher than the consensus estimates.
• SK Telecom’s shareholder return policy is to return at least 50% of adjusted profit for the year on a consolidated basis.

• Wacom is a technology company specializing in the development of graphic tablets (pen tablet products), pen displays (display products), and related digital interface solutions.
• Leveraging its high reputation for its branded products, it is expanding in the OEM solutions market.
• Due to changes in market structure driven by demand shifting towards general-purpose tablets and lengthening replacement cycles, Wacom is focused on improving its sales mix and earnings quality by developing a service-centric growth engine. 

• The 3Q24 revenue is expected 10.5% higher than 2Q24, but the GM/OPG outlook will be 5.1%/3.6% lower because of pricing adjustments and limited NRE sales .  
• Smartphone’s demand will enter peak season with expected stockpiling for new models. Automotive inventory adjustment is needed due to muted demand.  
• Dividend payout ratio has remained at 80-85% in recent years, with no major changes expected.

• Microsoft, a technology giant with a market-leading position across various sectors, finds itself at a crossroads.
• The company has demonstrated remarkable growth, with annual revenue surpassing $245 billion, driven largely by its cloud services and AI-driven innovations.
• However, recent events have cast a shadow over its future prospects.

• Sales decreased to JPY4.1bn (-9.3% YoY), operating profit to JPY528mn (-32.0% YoY), and recurring profit to JPY521mn (-34.3% YoY).
• Q1 FY03/25 results achieved 62.5% of 1H sales forecast, 88.0% of operating profit, and 86.8% of recurring profit.
• Sales of products for pachinko and pachislot machines decreased YoY, with graphics LSI sales dropping by 20,000 units.

• IPO lock-up expiry of Kokusai Electric (6525 JP) results in a forecasted increase in free float to 35% and fcap of $2.9bn for the August 2024 review. 
• Secondary offering of Kokusai Electric (6525 JP) results in a forecasted increase in free float to 60-65% and latest fcap of $3.4bn- $3.7bn for the November 2024 review. 
• Inclusion will be determined based on fcap against the fcap threshold. Fcap uncertainty for November is largely driven by stock price fluctuations and the Greenshoe Option. 

• The Technology Select Sector SPDR (XLK US) ETF tracks the Technology Select Sector Index and has an AUM of over US$65bn.
• The recent drop in NVIDIA Corp (NVDA US) has taken its market cap and free float market cap lower than Microsoft Corp (MSFT US) and Apple (AAPL US). 
• If that continues to be the case on 13 September, there will be huge outflows for NVIDIA (NVDA) and huge inflows for Apple (AAPL) at the close on 20 September.

For our next Corporate Webinar, we are glad to welcome MoneyHero Group’s CEO and Director, Mr Rohith Murthy and CFO, Mr Hao Qian.

In the upcoming webinar, Rohit and Hao will share a short company presentation after which, they will engage in a fireside chat with Smartkarma Insight Provider, Ishan Majumdar. The Corporate Webinar will include a live Q&A session.

This Corporate Webinar will be hosted on Tuesday, 13 August 2024, 15:00 SGT. 

About MoneyHero Group

MoneyHero Group connects people to a better financial future. The mission at MoneyHero Group is to make all of life’s financial decisions a time saving and rewarding experience. MoneyHero Group educates consumers about personal finance, helps them decide which products are best suited for their needs, and facilitates getting the product. They connect financial institutions with their target customers and help them achieve their customer acquisition objectives.

• Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
• SUNWELS Co (9229 JP) and Macbee Planet (7095 JP) moved to the Prime market in July 2024 which means there will TOPIX Inclusions at the end of August 2024.
• Our pre-event pick CELSYS (3663 JP) has seen its price fall by more than 20% during the recent market sell-off and it is close to a key share price threshold.  

• Arm’s revenue of $935M marks a 39.1% YoY increase, driven by a significant 70% rise in license revenue. Earnings of $0.40 exceeded expectations, reflecting a robust 67% YoY growth.
• Arm’s R&D investments in AI workloads drive future royalty growth, with v9 and compute subsystems enhancing licensing value amid strong AI demand, particularly in data centers.
• Shares dropped 13% as Q2 revenue guidance of $780M-$830M and FY25 revenue guidance of $3.8B-$4.1B were below market expectations.

• Flex Ltd. reported solid financial results, reflecting a combination of strategic positioning and operational resilience.
• The company delivered $6.3 billion in revenue for the quarter, slightly exceeding expectations, while achieving an adjusted operating margin of 4.8%.
• This translated into an adjusted earnings per share (EPS) of $0.51, which is a 9% increase year-over-year.

• Silicon Motion reported 2Q24 results on Friday, describing strong demand for NAND flash controllers driven by the PC industry and improving demand from the smartphone industry.
• The company expects industry NAND flash pricing to continue improving into 2025E. Moreover, SIMO expects to expand its market share for NAND flash controllers by year-end.
• Maintain Structural Long rating for SIMO. The recent share price decline is painful for holders however share weakness is an accumulation opportunity with an investment view to mid-2025E.

• In line with the company’s plan –Semiconductors saw a lower segment OP margin (7.3% Q1 FY3/24, 4.0% Q1 FY3/25) with a revenue decline in profitable Industrial (-34.8 YoY) due to weakness in the semiconductor market.
• Compared to the previous quarter, the segment OP margin declined (5.4% Q1 FY3/24, 4.0% Q1 FY3/25) with poorer sales due to a higher contribution from less-profitable Memory.
• However, the revenue decline in Industrial was less pronounced (-2.7% QoQ), a sign of bottoming out. 

• Juniper Networks reported its third-quarter results for 2023, delivering a performance that outperformed expectations in a challenging macroeconomic environment.
• Juniper Networks showcased a robust total revenue of $1.398 billion for the quarter, which exceeded the midpoint of its guidance.
• The company experienced better-than-expected non-GAAP gross and operating margins, contributing to a non-GAAP earnings per share of $0.60, surpassing the high end of its quarterly guidance range.

• SS&C Technologies reported encouraging results for the second quarter of 2024.
• The company experienced a record adjusted revenue of $1.4524 billion, which grew by 6.5% and surpassed expectations by $20 million.
• Adjusted diluted earnings per share also saw a significant increase of 17.6% to $1.27.

• When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.
• Nearly 7mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco’d a buy. Then 5mos ago, recommended taking profits.
• Ibiden has now underperformed Shinko by 25+% in 2-plus weeks. GAP RISK is higher but this is a short-timer. HUGE yield to “expected” start date, so everyone assumes a delay. 

• Local traders see interest rate cuts and value-up disclosures as key for timing Samsung Electronics 1P discount narrowing.
• Samsung’s only realistic value-up goal beyond 50% FCF return is improving ROE, likely through a pref-skewed buyback or cancellation program.
• If Samsung announces a value-up plan during the Bank of Korea’s rate cuts, local traders expect the 1P discount to reverse, targeting October-November for position entry.

• Nuvoton Technology (4919 TT) should be deleted from the Yuanta/​P-Shares Taiwan Dividend Plus ETF in September and that will trigger selling of over 4 days of ADV.
• Nuvoton Technology (4919 TT) has underperformed most of its peers since the start of the calendar year and shorts have started to increase in the stock.
• Positioning appears light and the recent deletion from an index has increased the real float of the stock. Recent semiconductor weakness could further pressure the stock.

• TSMC: Premium Breaks Back Down to +8.3%; 5-15% Could Now Be the Key Range
• UMC: -2.2% Discount; Good Level to Go Long the Premium
• ASE: Premium Breaks Down Again, Now Only +1.5%; Consider Going Long

• Black Sesame Technologies (BLACKSES HK) is looking to raise US$143m in its Hong Kong IPO.
• Black Sesame International Holdings (BSIH) is an automotive-grade computing SoC and SoC-based intelligent vehicle solution provider.
• In our earlier notes, we looked at the past performance of the deal. In this note, we discuss peers and share our thoughts on valuation.

• Tough Start to the Week — Negative News for Nvidia and Apple Supply Chains
• Key Events: Asustek & Novatek Results; Mediatek & TSMC July Sales Data
• UMC Signals Non-AI Industry Inventory Correction Through 2024E; Why Intel Is Increasingly Important 

• UMC’s latest results indicate a mild recovery for consumer, communications, and computing industries. UMC’s capacity utilization to continue improving but industry inventory correction could last until end-2024E.
• UMC maintained 2024E capex guidance however it’s increasingly clear UMC can’t keep up the capex arms race alone. Hence we see UMC & Intel becoming closer and closer partners.
• We continue to view UMC as a long-term accumulate, and rate the stock as Structural Long, this however requires a longer than usual multi-year holding period.

• Q2 revenue of $64.73 billion and EPS of $2.95 surpassed expectations of $64.39 billion and $2.93, respectively. Intelligent Cloud revenue reached $28.52 billion but below analysts’ $28.68 billion expectation. 
• Activision acquisition boosted revenue by 3 points but cut EPS by $0.06 due to lower operating income.
• While Microsoft’s core cloud business slowed, it increased capex significantly. Uncertain GenAI monetization might shift wealth from Microsoft shareholders to Nvidia shareholders.

• In a shocking turn of events, Intel Corporation, a long-standing leader in the semiconductor industry, witnessed one of its worst days on Wall Street, losing over a quarter of its market value in a single trading session.
• The drastic drop followed the company’s announcement of a $1.6 billion net loss for the second quarter of 2024, a stark contrast to the $1.47 billion profit reported in the same period the previous year.
• Intel’s share price plummeted by 27%, marking its steepest decline since 1974, as the company grappled with disappointing earnings, a bleak forecast, and a massive restructuring plan.

• Revenue for FY03/22 was JPY227.8bn (+8.8% YoY), with IT Infrastructure Distribution segment revenue rising 17.4% YoY.
• Operating profit for FY03/22 was JPY4.3bn (-13.4% YoY), with a temporary drop in profit margin due to competition.
• Daiwabo Holdings’ FY03/25 forecast includes revenue of JPY1.0tn (+4.6% YoY) and net income of JPY21.8bn (+409.0% YoY).

• SOUTHBOUND was again a net buyer, for HK$9.2bn this week (now 26wks in a row of net buying), on smallish two-way volumes.
• I’ve thought national team was buying banks for months. They were gone for a couple of weeks. Feels like they are back. 
• There were three ETFs in the top five SOUTHBOUND sells this past week, reversing last week. Energy, Utilities, Telecoms bought. 

• Continued stub losses are one thing. Ballooning PCCW Ltd (8 HK) parent debt is another. 
• Preceding my comments on PCCW and HKT Ltd (6823 HK) are the current setup/unwind tables for Asia-Pacific Holdcos.
• .These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Nintendo missed Q1 with Operating income coming in at Y54.5b (-71% YoY) vs our estimate Y116b and the street at Y94b
• Switch 2 hardware and software units sold are now suffering from buyer fatigue as consumers await the next-gen console
• The stock will likely fall quite sharply over the next week. Looking for good buying opportunity in anticipation of the next console cycle

• Q224 revenues of $12.8 billion, in line with their updated May outlook, ~flat QoQ and down 1% YoY.
• Gross margin (non-GAAP) was 38.7%, down 1.1 points YoY but down a whopping 4.8 points from the April outlook.
• Shares tanked >24% in after hours trading. What’s really going on at Intel? 

• We have a Positive view of KT Corp (030200 KS) due to three main reasons.
• First, KT has started to implement aggressive capital return policy (returning 50% of net income through dividends and share buybacks/cancellations). Two other reasons include Corporate Value Up and higher Smartscore.
• KT Corp has been the best performing stock among the three major Korean telcos in the past one year. KT Corp’s shares are up 27.9% in the past one year.

• Orders were JPY4.7bn (-4.5% YoY) and revenue was JPY5.0bn (+7.2% YoY), reaching a record high.
• Operating profit was JPY1.2bn (+16.7% YoY) with an OPM increase of 1.9pp to 23.2%.
• mcframe license revenue was JPY1.3bn (+22.0% YoY), breaking the record high for the Products business.

• Tenable Holdings has been in the news after reports suggested that the management is exploring strategic alternatives including a potential sale.
• The company delivered a mixed performance for Q2 2024, with lower-than-predicted Calculated Current Billings (CCB) but stronger performance in revenue and earnings.
• Although the performance of the company’s flagship Cyber Exposure platform, Tenable One, and its cloud security offerings were both highlighted as central growth drivers, it was noted that the traditional Vulnerability Management (VM) market, in which the company is a leader, has become increasingly cyclical.

• Tower Semiconductor posted a solid financial performance for the second quarter of 2024, showcasing revenue of $351 million and a net profit of about $53 million, translating to a net margin of approximately 15%.
• Notably, the company achieved sequential quarterly revenue growth as previously targeted and forecasts continued growth with a third-quarter revenue guidance of $370 million, plus or minus 5%.
• The commitment to driving innovation and expanding market leadership was evident throughout the period.

• Check Point Software reported solid financial results for the recent quarter, showcasing moderate growth across key financial metrics.
• The company achieved a 7% increase in revenues, reaching $627 million, which exceeded the midpoint of its projected range.
• Additionally, non-GAAP earnings per share (EPS) grew by 8% to $2.17, reflecting Check Point Software’s ability to manage costs effectively while navigating a challenging market environment.