TMT/Internet

• While our outlook for Sea (SE US)‘s 2Q23 was bearish, we didn’t anticipate such a substantial price reaction post-earnings, considering the existing low consensus.
• However, the market appears to have given more importance to the revenue miss and the deterioration of fundamentals in e-commerce, as indicated by the post-earnings price reaction of -28.7%.
• Shopee’s modest profitability, restrained growth fail to warrant an EV surpassing $7.0bn. The Gaming business is best valued around $3.0bn, while the Fintech arm should be valued at around $5.0bn.

• Sea reported CY2Q23 top-line that missed consensus by 3.4%, while non-GAAP net income beat  by 16%. Sea guided for the net margin to turn negative again in future quarters.
• We see deterioration of Sea’s competitive landscape as a long-term trend, hence we cut TP to US$35. The next swing factor is Temu’s ASEAN launch.
• Yet, we need to remind investors that Sea’s 3Q earning might have some upside, including user growth of Shopee, as well as stabilization of gaming metrics.

• Splitit Ltd (SPT AU) will seek approval from shareholders to delist the Buy Now, Pay Later micro-play from the ASX and redomicile to the Cayman Islands.
• Concurrent with the voluntary delisting proposal, PE outfit Motive Partners will pump in US$50mn in exchange for preference shares – assuming the delisting occurs and certain earnings targets are met. 
• This is not an Offer for shares. If delisted, Splitit shareholders will hold scrip in an unlisted private vehicle. 

• Alibaba Group Holding Ltd.’s workplace collaboration platform DingTalk will split from the company’s cloud division and pursue its own IPO, a source familiar with the matter told Caixin, as the tech giant ramps up efforts to unlock growth following its major restructuring.
• DingTalk’s separation is expected to be completed before the Alibaba cloud unit’s own IPO, the source close to the e-commerce firm said.
• Alibaba announced in May that it would spin off its Cloud Intelligence Group via a stock dividend distribution to its shareholders over the next year with an eventual listing.

• In 2Q23, online advertising and FinTech revenues continued to grow rapidly.
• Game revenue was slow, but two existing games were still at the top of the game market.
• The operating margin improve significantly, benefiting from the layoff last year.

• Tesserent Ltd (TNT AU)‘s IE considers Thales SA (HO FP)’s A$0.13 offer fair and reasonable as it is above its valuation range of A$0.098 to A$0.109 per share. 
• The offer is subject to FIRB and shareholder approval. New Zealand’s OIO approval suggests that Australia’s FIRB approval should be forthcoming. Pearson’s recent selldown lowers the vote risk.
• At the last close price and for the 4 October payment, the gross and annualised spread is 4.0% and 32.0%, respectively.

• Tower to collect a cool $353 million termination fee from Intel
• Intel claims its foundry ambition to become the global #2 by end of the decade remains unchanged
• The key thing Intel needed from Tower was access to its broad, diverse portfolio of specialty process technologies. These will take Intel years to develop on their own.  

• Tencent (700 HK) reported 2Q2023 results today. Revenue grew 11.3% YoY to RMB149.2bn (vs consensus RMB151.1bn) while reported OP increased 34% YoY to RMB40.3bn (vs consensus RMB44.6bn).
• Rapid growth in ad business, video account monetisation and cost controls have contributed to Tencent’s 2Q2023 earnings despite domestic gaming business has slowed down.
• Though Tencent’s 2Q2023 results show a recovery in earnings, we would interpret the company’s earnings with caution given the slowdown in domestic gaming and social networks businesses.

• SSE 50 and SSE180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on Shanghai Stock Exchange. 
• Earlier this month, I discussed the historical price and volume performance of SSE 50 and SSE 180 Rebalance events in Quiddity Primer for SSE 50/180/380 Index Rebalance Events. 
• In this insight, we take a look at our expectations for potential index changes for SSE 50 and SSE 180 during the December 2023 Rebalance event.

• Omron’s stock price has collapsed 20% after missing Q1 earnings estimates. 
• The recovery in demand has been pushed back – the company may cut its full year guidance at the interim stage
• On near-term earnings, the stock is around fair value. There is +20% upside for longer-term investors based on our DCF 

• PayPal managed to surpass the revenue and earnings expectations of Wall Street.
• The company’s strategic priorities, including branded checkout, merchant solutions, and digital wallets, drive innovation and growth, supported by AI and data utilization investments.
• In addition, PayPal introduced the development of a stablecoin pegged to the U.S. dollar called PayPal USD.

• Qualcomm delivered a mixed result in the recent quarter, with revenues below market expectations, but it managed to surpass the analyst consensus in terms of earnings.
• Its chipset and licensing business’s strong performance supported the company’s revenues.
• Qualcomm’s success in delivering premium mobile experiences, advancing 5G adoption, and expanding its presence in areas like automotive and IoT underscores its commitment to innovation and market leadership.

• IMMR reported second quarter results where the income from the Company’s securities portfolio led to earnings exceeding our expectations. 
• IMMR’s revenue declined more than expected as softer unit volumes resulted in lower royalty revenue. We would expect a recovery in smartphone units to result in higher revenue in 2024
• The utilization of haptics within automobiles remains the most promising source of revenue growth for IMMR. The market is broadening to lower priced models

• Shopify Inc. managed to exceed analyst expectations in terms of revenue as well as earnings with strong financial results.
• The company’s focus on improving the merchant experience, including pricing changes and innovative product offerings, contributed to strong top-line growth and attachment rates across the Merchant Solutions product suite.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Fidelity National Information Services exceeded Wall Street’s revenue and earnings expectations in the last quarter.
• In the quarter, revenue, adjusted EBITDA, and adjusted EPS exceeded expectations, driven by strong execution across their three business divisions and a continued emphasis on expenditure restraint.
• Fidelity National Information is seeing strong traction, with increased penetration in atypical sectors like large corporates, insurance, and auto loan organizations.

• Cognizant Technology Solutions managed to exceed the revenue expectations as well as the earnings expectations of Wall Street.
• The company exceeded expectations in the second quarter for adjusted operating margins and revenue at the high end of its target range.
• We give Cognizant Technology Solutions Corporation a ‘Hold’ rating with a revised target price.

• Due to decades of underinvestment, North American infrastructure has aged and deteriorated significantly to a point where governments are beginning to rapidly increase spending in the sector.
• The declining stability of the electrical grid as well as electrification trends only exacerbate the issues at hand.
• This report highlights five small-cap Canadian equities with torque to thematic trends in infrastructure spending. 

• Strong Q2 results with revenue +42% yoy versus +33% in Q1
• Gross margin expansion to 51.3% on improving AI algorithm performance
• Stock down around 20% over past couple of months, No change to bullish growth forecasts.

• Sindoh Co Ltd (029530 KS) is the 24th company in our Korea Small Cap Gems series. 
• Sindoh has one of the highest net cash/market cap ratios in the entire Korean stock market. Net cash at end of 1Q 2023 was 226% of its market cap. 
• Sindoh’s operations turned around in 1Q 2023. It had sales of 105.5 billion won (up 26.6% YoY) and operating profit of 9.8 billion won (turned black) in 1Q 2023.

• We remain bearish on Sea (SE US) leading upto Q2 results on 15th August 2023.
• Our analysis suggests Sea Ltd could hit around $3.25bn revenue in 2Q23, in line with consensus. However, profitability could fall short of consensus expectations.
• Nonetheless, any downside stemming from a minor earnings shortfall could be rather limited given the existing low consensus and the lackluster price performance leading up to the Q2 earnings announcement.

• Samsung SDI is currently facing legal challenges in the United States stemming from a scooter fire during charging and a separate incident involving a lithium-ion battery fire. 
• These incidents are part of a series of recurring battery fire controversies involving Samsung SDI dating back to 2016. 
• Notably, the ESG (Environmental, Social, and Governance) risk level for Samsung SDI has been assessed as ‘High,’ supported by an ESG risk score of 2.7.

We view Lenovo as “Low Risk” on the LARA scale, mainly due to the business’ large size, track record and strong balance sheet. Lenovo is the world’s largest PC maker, with the PC segment being the company’s key profit centre. The Mobile segment has been scaled back to certain markets, and has turned profitable. The Data Centre/Server business is promising and has grown impressively, albeit still suffering losses.

Negatively, all three of the company’s market segments are becoming commoditised. The PC markets, having previously experienced a structural decline due to changes in user behaviour as well as substitutes (smartphones and tablets), has enjoyed strong demand as more people have been working from home amid the pandemic.

Our Credit Bias on Lenovo remains “Stable”, as the growth outlook is subdued due to weak post-COVID-19 PC demand. We do not expect the credit to improve further. That said, the strong balance sheet, sound liquidity and solid working-capital management would cushion Lenovo from the PC segment’s inventory adjustment period.

Controversies are “Immaterial” and the ESG Impact on Credit is “Moderately Positive”. ESG-compliant funds may find Lenovo attractive due to its strong ESG. The company has done very well in terms of environmental factors, with a strong management team as well as a long and positive track record. Lenovo is mainly exposed to geopolitical risk, albeit it has managed this very well amid the US-China trade war.

• Hon Hai beat expecations by nearly 30% but reduced 2023E sales guidance. However, the company’s AI server business is expected to take market share and its EV business is developing.
• Asustek management provided some clarity on when AI PCs might turn from dream into reality — 3Q24E is when the company believes they will contribute significantly to sales volume.
• Himax reported some improvement in demand from China beleaguered automotive industry and said it expects its dominant global market position for automotive display drivers to continue.

• Freee reported 4QFY06/23 results today. Revenue increased 39.6% YoY to ¥5.4bn (vs consensus ¥5.32bn) while operating losses increased to ¥3.0bn from ¥724m in 4QFY06/2022 (vs consensus ¥2.5bn).
• Freee KK (4478 JP) ’s full-year revenues and operating losses were in line with the company’s guidance, and increased losses were due to investments related to growth and customer acquisition.
• The company’s medium-term plan expects revenues of more than ¥50.0bn by FY06/2027E and operating profits by FY06/2025E which seems attainable to us.

• KLA Corporation delivered a positive result and managed an all-around beat in the last quarter.
• KLA demonstrated consistent execution amid a competitive market by delivering results at the upper end of the guidance and commitment range.
• We give KLA Corporation a ‘Hold rating with a revised target price.

• Hon Hai’s 2Q23 results beat earnings street expectations by nearly 30%, thanks to AI server demand and gross margin rising.
• Tightening China tech restrictions highlight Hon Hai’s advantageous position for EV development.
• Structural Long. Any weakness over worries about Apple/consumer products demand is an opportunity to accumulate. Investors shouldn’t let cyclical expectations fluctuations blur their focus on Hon Hai’s structural story.

• SMIC reported C2Q23 top-line, EBIT, and non-IFRS net profit in-line, (10%), and (20%) vs. our est., and in-line, (35%), and (8%) vs. cons., respectively.
• SMIC guided 3Q revenues up 3-5% QoQ, but gross profit flattish QoQ. This suggests SMIC is shipping 8” wafers with low, or negative profit per wafer.
• We maintain BUY on Huawei exposure but cut our TP to HK$ 24 to reflect the low profitability of 8” wafer orders that could persist given weak demand.

• Alibaba delivered a strong June quarter that beat consensus by a wide margin and across the board, showcasing an acceleration of recovery.
• The strong results were however clouded by China’s weak macro signals and investors’ lingering concern about China consumption of which Alibaba is commonly seen as a proxy.
• Alibaba trades at 9x our revised-up FY24 earnings. The most certain thing about Alibaba amidst all the uncertainties is it is getting cheaper and it is not a value trap.

• BABA reported CY2Q23 top-line and non-GAAP net profit 10% and in-line vs. our estimate, and 12% and 20% vs. consensus, respectively. Taobao/T-mall 3P, international retail, and DME beat our estimate.
• We suspect WeChat cooperation has been a main driver for increasing DAU of a cohort of previously untapped users. This also drove merchants to return to the platform.
• We maintain BUY and raise TP to US$ 120 to reflect (1) higher growth of Taobao/Tmall, and (2) improved profitability of most business groups.

• Within Alibaba (ADR) (BABA US)‘s June quarter results, the numbers from logistics arm Cainiao Smart Logistics (1437124D HK) stood out: revenue up 34% Y/Y, & EBITA turned to +ive
• In this insight we attempt to place Cainiao’s stellar results into context: it grew far faster than parent Alibaba’s revenue, but also faster than Chinese e-comm and Chinese express
• As Cainiao preps for its IPO, its June results should boost investors’ confidence. The numbers also hint at what is driving Cainiao’s recent performance, and which indicators to watch

• Back on the 7 June, Chindata Group (CD US) announced Bain Capital’s NBIO to buy all shares of the Chinese data center provider it does not already own for $8/ADS.
• On the 13 July, Chindata announced that China Merchants Capital has made an NBIO at $9.20/ADS.
• Now Chindata has entered into a definitive agreement with Chindata at US$8.60/ADS. Bain holds more than 2/3s of Chindata to vote this through. And there is no PRC regulator approval.

• Chindata Group (CD US) has entered a definite agreement with Bain Capital at US$8.60 per ADS, 7.5% higher than its previous offer of US$8.00 per ADS.
• Completion is conditional on shareholder approval, dissenting shareholders representing less than 12% of outstanding shares and any applicable regulatory approvals. The completion conditions should be met.
• CMC’s offer, while higher, does not meet the “superior proposal” criterion. At the last close price and December-end completion, the gross and annualised spread is 6.0% and 16.6%, respectively.

• The data for the Nikkei 225 Rebalance is cemented as of 31 July 2023. Lasertec Corp (6920 JP) looks like a shoo-in. The DELETEs are obvious too.
• Fast Retailing (9983 JP) doesn’t get a cap (yet). But the other ADDs are a real question. It is a matter of interpreting the methodology and qualitative aspects. And FLOAT.
• One way, Socionext (6526) and Mercari (4385) are ADDs. Another way, it looks like Nitori Holdings (9843) and ZOZO Inc (3092) or Ryohin Keikaku (7453). FLOAT IS A PROBLEM ANYWAY.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• In India, TVS Supply Chain Solutions (1915741D IN) launched its IPO bookbuild. Suzlon Energy (SUEL IN) had also launched its well-flagged INR20bn (US$240m) QIP.
• While Japan saw Star Asia Investment (3468 JP) launching its primary follow-on for acquiring properties as well. 

• Asustek and Acer recently reported 2Q23 results with both companies showing a rebound in margins and normalized inventory levels. The cycle trough is clearly past.
• Asustek expects to grow its server product revenue by 500% by 2027 and is also developing AI PCs that could generate a significant sales volume by 3Q24.
• The latest results and comments not just make a coming PC up-cycle clear, but also imply that it could be stronger than previous cycles thanks to AI PCs.

• Juniper Networks delivered an all-around beat in the previous quarter, achieving total revenue growth of 13% year-over-year.
• Despite some challenges in the cloud and service provider segments due to the timing of projects and digestion of prior purchases, Juniper’s Enterprise business showed remarkable momentum, accounting for over 45% of total revenue and posting nearly 40% year-over-year growth.
• While revenue growth is expected to face some pressure soon due to macro uncertainties, Juniper remains optimistic about its long-term growth prospects, especially in the cloud and SP Metro opportunities.

• Himax reported 2Q23 results — Showing a previously-guided margin drop due to the one-off impact of the exit from long-term capacity commitments.
• Positive developments — Inventory levels improved further, China’s automotive industry demand is rebounding from lows, and the company should maintain its already-dominant market share in automotive display drivers.
• Long Himax — Himax continues to represent structural exposure to dramatically increasing display content in vehicles. The stock’s previous all-time high is double the current level.

• Roku Inc. managed to surpass the revenue expectations as well as the earnings expectations of Wall Street.
• The company demonstrated growth in scale, engagement, and platform revenue.
• Roku’s TV streaming platform and its innovation and scale continue to attract users, advertisers, streaming services, and content owners.

• ARLO reported another quarter of net subscriber adds above expectations and putting the Company on a faster pace to achieve 3 million paying subscribers
• At the end of the June quarter, ARLO had annualized recurring revenue of approximately $200 million even though hardware revenue has remained at levels not seen in two years
• The recurring revenue model gave ARLO the ability to generate free cash flow in the Q2. This inflection point should solidify ARLO’s valuation on a recurring revenue basis

• Alibaba (ADR) (BABA US)‘s 1QFY24 revenue and OP beat consensus by RMB 9.2bn and RMB 14.4bn respectively, possibly on the back of a successful 6.18 shopping festival.
• It looks like Alibaba Group Holding (9988 HK) has decided to abandon its New Retail Strategy and instead, put more effort into e-commerce, especially on popular platforms like Taobao and Tmall.
• Although this is a good-sign and could rally the stock short-term, we would still steer clear of Alibaba as we remain skeptical about the overall health of the Chinese economy.

• SmartRent’s 2Q was a bit of a head-scratcher. The significant growth in sales from 1Q didn’t carryover into 2Q, with top-line decelerating from ~74% YoY in Q1 to 26% YoY in 2Q.
• Trends of key KPIs suggest deterioration in the underlying business is continuing and in fact worsening, as we have seen from industry peers recently.
• The exact cause of such is unclear given management’s hesitance to provide clear commentary.

• SS&C delivered mixed results for the previous quarter, with revenues above the analyst consensus.
• The company’s strength was evident in its alternative business, particularly private markets, which saw a significant growth of over 20%, as well as in its Intralinks and retirement businesses.
• SS&C plans to focus on expense management, prioritize innovation, and continue product rollouts.

• XPER reported second quarter results underscoring the progress the Company has made in securing new design wins and revenue opportunities for its connected car and media platform segments
• Simultaneous with the second quarter results, XPER announced Sharp would use TiVo operating system for smart TVs starting in 2024
• New design wins for DTS AutoSense and DTS AutoStage are expected to translate into revenue towards the end of 2024

• Focus maintained on growth, experiencing temporary headwinds – Q1 FY3/2024 results showcased the company’s strong execution in driving growth, with sales increasing by 6.2% YoY.
• Although there was a major improvement in profitability in the Environmental Energy segment, the core Semiconductor and Electronics Components experienced a negative of persistent demand weakness in China.
• There was also reduced spot demand, negative FX translation impact YoY and on inventory valuation, and allowance for doubtful debt related to a key customer. 

• NTT reports a Q1 which looks like KDDI where the business looks like KDDI and a bit better than that where it doesn’t. Good. Not great. 
• But NTT announced a ¥200bn buyback. Again good. Not great. 
• And on Sunday, LDP politician Amari spoke on a Sunday news show about the possible govt selldown of NTT shares. 20yrs is a long time. So no overhang.

• Today, the personal holding company of Kyoden Co Ltd (6881 JP) founder Hashimoto-san announced a Tender Offer to take the company private. 
• Together with his company, he owns 64.75%. He only needs 1.93% to tender. The combination of Shokochukin, SMBC, and Yokohama Bank get him over the line. 
• This is small, illiquid, and will trade tight, but it’s a done deal. 

• AMD reported Q2’23 revenues of $5.4 billion, $100 million above the guided midpoint, flat sequentially but down 18% YoY, largely attributable to weakness in their client segment revenues.
• Q3’23 revenue of $5.7 billion at the midpoint,  a modest 5.5% increase sequentially and ~2.5% YoY.
• AMD has a lot riding on its MI300 launch but can it really take a bite from NVIDIA’s lunch?

• Softbank and the Vision Fund’s exposure to WeWork – estimated at USD1.8bn – look increasingly to be at risk of being written off
• Masa’s debts to SoftBank stand at USD5.1bn at 1QFY23 end and we believe that private company valuations are vulnerable, especially in the light of the recent Union Square Ventures write-downs
• Softbank shares trade at a 36% discount to the stated NAV; with Alibaba gone, the potential Arm IPO valuation is critical but SVF1 and 2 private company valuations remain questionable

• KPIT reported a strong Q1FY24 with 7.1% constant-currency (CC) revenue growth and EBIDTA growth of 13.3% QoQ. EBITDA margin expanded by 90bp QoQ to end at 20%.
• KPIT is upbeat about the demand environment. OEMs are continuing to spend heavily on new technologies. KPIT itself is investing significantly in R&D, especially Generative AI.
• Deal wins was healthy at $190mm vs typical run-rate of $150mm+. The pipeline is also healthy across practices.

• Kyoden Co Ltd (6881 JP) has recommended the founder’s tender offer of JPY600 per share, a 32.5% premium to the undisturbed price (9 August).
• The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 1.91% ownership ratio.
• The minimum acceptance condition (lower limit) requires an undemanding 5.4% minority acceptance rate. The tender offer is reasonable. 

• U.S. has announced new bans on PE and VC investment into key Chinese tech industries.
• Elan Microelectronics, ChipMOS reported good results, two longs to consider as we still see upside.
• Apple earnings short-term trades update — We’re closing out both trades, one at a loss and one roughly flat.

• FUJIFILM Holdings (4901 JP) reported 1QFY03/24 results today. Both revenue and OP increased 5.6% and 5.2% YoY to ¥660.8bn (vs consensus ¥649bn) and ¥52.2bn (vs consensus ¥52.1bn) respectively.
• Materials segment’s earnings were negatively impacted during the quarter due to a stagnant semiconductor market, however, we expect segment’s earnings to improve with the completion of Entegris acquisition.
• Despite the company successfully transitioning into a healthcare player, Fujifilm is still trading in line with imaging/photocopy players and there is significant upside to the company’s current share price.

• Charter Communications delivered a disappointing set of results as the company was unable to meet the revenue and earnings expectations of Wall Street.
• The company attracted 77,000 new Internet users in the second quarter, and its Spectrum One product and network development plans continue to pay off.
• The overall number of mobile lines was over 6.6 million at the end of the second quarter.

• The Tenth Annual JPX Nikkei 400 Index Review was announced on Monday 7 August. There are 38 Inclusions, 36 Deletions. They are mostly in line with Janaghan Jeyakumar, CFA‘s predictions.
• The BIG SELL is T&D Holdings (8795 JP), which surprised me. The top BUY is ROHM Co Ltd (6963 JP) which was not on the Quiddity Leaderboard.
• Otherwise, the ADDs and DELETEs are 1.8-2.0 days of ADV, there are several NEW CAPs and some RECAPS among LARGE CAPS

• On 8 August, Nikkei Asia reported that Arm plans to complete its IPO on NASDAQ in September in a deal expected to be worth more US$60 billion or more.
• Global tech giants including Apple, Samsung Electronics, NVIDIA, and Intel are expected to invest in Arm once the company is listed on the market.
• The IPO offering amount is expected to be between $8 billion and $10 billion.

• PayPal stock has fallen dramatically on speculations regarding the near-term future.
• The market is now pricing-in significant deterioration of the company’s top or bottom line.
• The management is making the right moves to secure long-term competitive advantages, while also rewarding shareholders, according to the report.

CLIQ Digital delivered robust growth in H123, with 37% year-on-year growth in both revenue and EBITDA at a maintained margin of 15.8%. Growth continues to be driven by growing marketing spend and investment into evolving the bundled content offering. Given a more competitive bidding market, management is focusing on acquiring customers with a higher lifetime value to create a more profitable subscriber base. Management has reiterated both its FY23 and mid-term FY25 guidance and our headline forecasts remain unchanged. Despite CLIQ’s share price performance faring better than the peer average valuation, it remains at a significant discount to peers on both EV/sales and EV/EBITDA multiples. In our view there continues to be significant upside to the current share price on our current estimates.

• There are 38 adds/36 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 4.35% and a two-way trade of JPY 461bn (US$3.24bn).
• There are a few stocks that will have same way flow from other index trackers within a few weeks of the JPX Nikkei 400 Index rebalance.

• Over the last year, the discount of Samsung Electronics Pref Shares (005935 KS) to Samsung Electronics (005930 KS) has increased from 5% to 17%.
• The preferred shares have adequate liquidity, a large issue market cap, and now trade at a much higher dividend yield. A special dividend will further increase the dividend yield differential.
• Breaking from history, the preferred shares discount has continued to increase as the stock has moved higher. With the preferred shares trading near its widest discount, that could change.

• 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.
• Plus Alpha Consulting (4071 JP) will be included in TOPIX at the end of August 2023 and so far the stock has performed negatively as expected (see link).
• Our long-term TOPIX pre-event name CELSYS (3663 JP) has seen its share price decline sharply in the last few weeks which raises some important questions.

• KT Corp (030200 KS)’s shares were up 4.1% today to 32,000 won driven by better than expected results in 2Q 2023 and the nomination of a new CEO. 
• KT has nominated Kim Young-Seop, the former CEO of LG CNS as the new CEO of the company.
• KT Corp has attractive valuations. It is trading at only 2.6x EV/EBITDA, 6.7x P/E, and 0.5x P/B in 2023. These valuation multiples are much cheaper than SK Telecom.

• ACMR reported C2Q23 top-line, non-GAAP EBIT, and non-GAAP net profit 22%, 130%, and 209% vs. our est., and 25%, 228%, and 248%, respectively. 
• As FY guidance was unchanged, we suggest that the revenue beat was due to tool delivery faster than expected (i.e., order pull-in).
• We maintain our FY23 revenue estimate, but raise our net margin estimate to reflect the better-than-expected impact of USD appreciation on profitability. 

• First Solar delivered an all-around beat in the most recent quarterly results.
• Driven by supportive industrial and trade policies, compelling market fundamentals, and robust customer demand, First Solar continued investing and expanding in U.S. domestic manufacturing.
• First Solar purchases Evolar AB in the search for next-generation solar cells.

• VeriSign managed to exceed analyst expectations in terms of revenue as well as earnings.
• The quarter included solid financial results and renewing the.net registry agreement with ICANN.
• The financial results in the quarter showed continued strength of its business during the uncertain macroeconomic period.