TMT/Internet

• On 28th Mar 2023, Alibaba (ADR) (BABA US) announced that it would adopt a new organizational and governance structure, splitting into six major business groups and other investments.
• Alibaba also stated that each of the business groups would be set up as an independent entity with its own board and the groups will eventually seek to list.
• In our previous note, we highlighted which division could list. In this note, we will look at Cainiao.

• Canon has conducted 18 buybacks in the last 15 years. Every single one has been the same size. And the parameter-setting and how they are executed is… particular.
• For those with Canon to execute, using the information about patterns may be helpful. 
• For those interested in a trade, there may be one here.

• Shopee, Southeast Asia’s largest e-commerce player, has been on a strict financial diet to reach profitability in the last year.
• That’s been welcome news for shareholders of its listed parent, Sea Ltd, but more challenging for sellers on the platform who have faced lower sales growth and higher selling costs after years of heavily subsidised operations. 
• In this blog post we report on the most important figures from Shopee’s newly published Q1-2023 results (released 16 May) as well as the key implications for e-commerce sellers in Southeast Asia.

• Sea (SE US)‘s shares dropped by 18% as its operating profit fell short of consensus by around 60% at $125m, compared to the expected $311m.
• Shopee’s revenue shows improvement due to increased monetization, but there are no signs of exponential growth potential in operating profit.
• Projected decline in paying users poses further downside for Free Fire, while the previously positive fintech segment underperformed in Q1 with revenue and operating profit below expectations.

• In 1Q23, the revenue growth rose significantly to 11% YoY.
• The operating margin also improved significantly to 24% in 1Q23 versus 17% in 1Q22.
• We set an upside of 28% and a price target of HK$440 for yearend 2023.

• Baidu delivered 1Q23 results with top line beat our estimate by 3.5%, and non-GAAP net income beat our estimate by 14.7%. 
• We expect both its ads and AI cloud revenues to recover with accelerated pace, which could offset the increase of R&D spending in AIGC. 
• Reiterate BUY rating and slightly raise TP to US$ 178 to reflect the faster recovery. Our TP implies 17.9x PE in 2023.

• SE reported C1Q23 revenue/non-GAAP net income in-line/(37%) vs. cons., and (3.2%)/(31%) vs. our est. Profit miss is mainly due to the 53% YoY decline in game revenue
• We suggest that 1) game development and S&M cost cutting, as well as 2) disappointing game content updates during 1Q23, lead to the weak result; 
• In the long run, we still expect Shopee growth to be SE’s major issue, as TikTok continues to grow rapidly. We maintain SELL and cut TP to US$ 60.

• freee (4478 JP) reported 3QFY06/2023 results. Revenue increased 39.5% YoY to ¥5.1bn (vs consensus ¥4.9bn) while adj. operating losses increased to ¥1.9bn (vs consensus ¥1.9bn) from ¥676m in 3QFY03/2022.
• Widened operating losses is no big surprise as freee had already guided for increased investments related to invoicing system and tax filing season which has helped increase paying user numbers.
• As we continue to emphasise, freee’s business model is superior to that of MF who has resorted to several mediocre businesses (non-BA SAAS) to pursue aggressive top line growth.

• Arista Networks delivered strong results in the quarter, with $1.35 billion in revenue and $1.43 in non-GAAP earnings per share, crushing market expectations.
• Throughout this year, Arista anticipates seeing increases in its gross margins every quarter.
• We give Arista Networks a ‘Hold’ rating with a revised target price.

• ZoomInfo Technologies achieved better-than-expected revenues and profitability in Q1 with an adjusted operating income margin of 40% and more than $121 million in unleveraged free cash flow.
• Moreover, ZoomInfo is investing resources in products to develop engaging customer experiences, enhance data leadership, and go upmarket.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• We believe BABA’s upcoming 4QFY23 results will surprise the market to the upside by a wide margin in terms of recovery in bottomline, catalyzing trading opportunity for short-term investors.
• We also expect that the results will usher in a period of sustained re-rating for the stock due to China’s continued yet slow consumption recovery and Alibaba’s well-executed restructuring plan.
• Geo-Political risks will not go away, but have been very much reflected in current pricing in our view. Buy ahead of results on Thursday.

• AEM reported weak 1Q23 showing significant revenue and margin pressure across the board
• The company mentioned it was an indirect beneficiary of AI and ChatGPT hype going forward
• AEM could achieve 0.40 EPS in FY24 once the semiconductor industry rebounds. Fair Value of 6 SGD is unchanged.

• At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
• Our multi-quarter outlook for Tencent Holdings Ltd (700 HK) remains extremely bullish with a multi-quarter target towards 451.95. In April we identified the 302/330 range as a potential buy zone.
• The recent low of 323.20 has preceded an impulsive bullish daily confirmation. This week we await a bullish weekly close (above 343.99) to confirm a renewed MT uptrend bias.

CentralNic’s Q123 results showed robust revenue and profit growth, as well as a further deleveraging of its balance sheet. Its product comparison business VGL’s entry into France provides a strong organic growth opportunity, with potential to expand into other regions. The group continues to showcase its commitment to shareholder returns with its latest share buyback programme.

• Cisco is about to report its Q3 2023 results, but the market does not seem to fully appreciate the business momentum.
• Decisions regarding capital allocation could give us some valuable clues on where is the business headed, says CNN’s John Sutter.
• The company is expected to report Q32023 results on Thursday.

• Hua Hong reported C1Q23 top-line, IFRS EBIT, and non-IFRS net income in-line, (15.3%), and 13.3% vs. our est., and in-line, (3.4%), and 34.9% vs. cons., respectively. 
• Hua Hong reported 1Q23 utilization rate of 103%, higher than peers, which we believe is due to (1) large EV and new energy exposure, and (2) 8” price cuts. 
• Despite near-term margin deterioration, we maintain Hua Hong’s BUY and HK$ 35 TP due to auto IC exposure and localization, implying 11x FY24 PE.

• On May 15th, Tencent holds its annual game conference “Spark 2023” and releases its latest game pipeline, including updates of 15 launched games and 20 new games.
• Considering Tencent’s large size, only a game that has the potential to exceed RMB 10 bn in annual gross billing could be considered as a positive sign.
• Yet, we don’t find any game title that could reach over RMB 10bn annualized gross billing in the game pipeline.

• Sea (SE US) may achieve around $3.0 billion in 1Q23 revenue, in line with consensus, but is likely to miss the consensus OP estimate of $309 million by approximately 10%.
• Shopee’s profitability is at risk without sustained revenue growth. If the cost-cutting strategy persists, losses are expected by 3Q23 or possibly sooner with a strategy shift.
• Amid Free Fire’s decline and Shopee’s potential losses, the fintech business stands as the sole bright spot.

• Appier achieved 32% revenue growth and 50.1% gross margin in Q1 FY23, exceeding company expectations
• We expect the pace of growth to accelerate, driven by stronger momentum in Digital Content in Q2 and Q3
• We remain bullish following the recent pullback in the share price. Stock is attractive at 5x EV/Rev

• Q1’23 revenues of US$630.8 million, up 6.1% YoY and flat sequentially.
• Gross margin was 32.1%, up 5.2 points YoY but down 6.1 points sequentially.
• HH is playing a blinder through the downturn and likely beyond…

• SMIC reported C1Q23 top-line, GAAP EBIT and non-IFRS net profit 4.7%, 17% and 75% vs. our est., and 1.9%, (19.5%), and 25% vs. cons。 
• We expect 1Q23 to be the bottom for SMIC, improving quarterly on the back (1) IC supply chain localization, and (2) domestic economic improvement. 
• Despite high-inventory levels at most clients, SMIC continues to receive wafer orders for new IC products. We maintain BUY rating and HK$ 24 TP.

• The possibility of experiencing a CFD margin call is a genuine and persistent concern. Even a small trigger causes selling pressure to intensify and results in a rapid downward trend.
• The counter that the local market is closely monitoring is JPM. The selling pressure from the JPM counter since May 8th has exhibited an abnormal pattern. 
• Eight names are screened. They are KOSPI 200/KOSDAQ 150 constituents with JPM’s net selling volume to SO being 0.2% or higher, and a margin-equity ratio of 3% or higher.

• Travelsky Technology Ltd H (696 HK) is the IT provider for airports in China thus it should be one of the stocks to benefit from China’s reopening.
• Despite already operating at a profit, the share price is still lagging behind the other travel-related names that are still loss-making.
• Its operating numbers have already reached the 2019 level, a pre-COVID era, thus the opportunity to rebound is abundant. 

• Since we released our piece suggesting closing our original Long Asustek vs. Short Acer, and reversing to Long ACER vs. Short Asustek, this new trade has earned a 6.9% spread.
• Given the latest performance between the two shares and the latest results from Asustek, we believe one can now close out Long Acer/Short Asustek… and reverse the trade again.
• Hence we now like Long Asustek vs. Short Acer based on relative share performance and latest guidance from Asustek.

• This week is relatively in terms of earnings. Applied Materials (AMAT US) will however be reporting on the 18th U.S. time.
• Hon Hai sees the PC market bottoming; Separately, we’ve closed our Long Acer vs. Short Asus and reversed it to Long Asus vs. Short Acer again.
• Quant shares have surged post results, dramatically outperforming Apple and other key Apple suppliers.

• In our view, Hon Hai 3Q23 results showcased stability for 2023E ahead of expected growth in 2024E-2025E.
• The company has maintained its 2025E 10% gross margin target and highlighted how its EV business expansion is continuing.
• While Consumer Electronics revenue is expected to fall this year, PC Products is expected to grow given the company believes the PC market has bottomed. Stay Long Hon Hai.

• Q1’23 revenues of NT$ 102,376 million, down 13% QoQ and down 20% YoY
• Forecasting PC segment +20% but Components segment -5% QoQ in Q2’23 
• Outperforming both peers & the market with >50% revenues now coming from gaming…

• In the digital era, data is the bedrock of decision-making, fuelling business strategies worldwide.
• However, the tightening landscape of privacy regulations presents challenges in capturing and utilizing data, particularly for advertisers and marketing departments across industries.
• In this complex backdrop, Near, a data intelligence startup, asserts its unique proposition of providing actionable, anonymized insights via its cloud-based AI platform.

• Weekly summary of vol changes and moves across Global Markets
• Analysing ATM volatility and skew changes over the last 5 days
• We suggest a few trades to take advantage of the implied vol surfaces

• On 12 May, GigaVis announced its IPO price of 43,000 won, which is 8% higher than the high end of the IPO price range of 39,700 won. 
• Our base case valuation of Gigavis is target price of 61,755 won per share, which is 44% higher than the IPO price of 43,000 won.
• Gigavis makes automatic optical inspection equipment (AOI) and automatic optical repair equipment (AOR) for the inspection and repair process of inner layer substrates, which are core components of semiconductor substrates.

• Q1’23 revenues of ¥109.9 billion, better than forecasted, down 6.4% QoQ but up 10% YoY.
• Q2’23 forecasted flat sequentially, no full year 2023 forecast provided
• There’s a major headwind looming on the horizon for the broader silicon wafer segment…

• 4QFY22 saw the best result for the Vision Funds since 3QFY21; SVF private companies saw minimal valuation write-downs last quarter, and we suspect valuations may still be too optimistically marked
• Masa’s debts to SoftBank stand at USD5.2bn in 4QFY22; in addition, the group’s credit risk exposure to troubled company WeWork was over USD1.1bn at fiscal year end and going higher
• Softbank shares trade at a 46% discount to the stated NAV; with the Alibaba valuation “cushion” largely consumed, the potential Arm IPO is critical but private company valuations remain questionable

• XL Axiata reported a robust set of 1Q2023 results as the competitive environment remains rational allowing it to raise prices, whilst its convergence strategy is starting to gain traction. 
• XL’s convergence penetration grew in 1Q2023 but the key announcement was that Link Net will become a pure fibre player whilst the retail element of fixed broadband will fall under XL.
• XL Axiata (EXCL IJ) has seen the MAUs for its digital platform reach 26m with increased user transactions and higher spending. Valuations remain attractive on 4.1x FY2023E EV/EBITDA.

• IMMR reported first quarter results reflecting the slowdown in smartphone shipments and the benefits of the Company’s investing activity
• Of the $150.3 million invested, at the end of March 2023, equity securities were $56.5 million of the portfolio compared to $53.3 million in December 2022
• IMMR’s legal pursuit of patent infringing parties could become an option on the current valuation of the stock

• ARLO reported a non-GAAP profit in the first quarter of 2023 after the Company implemented a price increase on its subscription plan
• ARLO added 182 thousand paid subscribers in the quarter and ended the first quarter with more than 2 million paying subscribers
• Service revenue has allowed for greater operating leverage with gross margin expected to rise further in future quarter with the growth in service revenue

• Rocket Internet-backed Flash Coffee has officially closed its series B round totaling US$50 million.
• In a statement, the company said it would expand deeper into Indonesia, with plans to open a branch in Surabaya in July. It already has a presence in Jakarta and Bandung.
• Besides Indonesia, Flash Coffee also operates in Singapore, Hong Kong, South Korea, Thailand, and Taiwan.

• PayPal has significant competitive advantages, and the management is making the right moves to improve them.
• PayPal continues to slide to multi-year lows, with a mixed quarter that was perceived as a very negative one.
• PayPal has been in a strong position in the market for the past three years.

• ServiceNow delivered an outstanding first quarter for 2023 which was an all-around beat.
• The subscription revenue showed a 27% growth in constant currency, surpassing the high end of guidance by 150 basis points.
• The latest release of ServiceNow, Utah, offers a range of new features and capabilities to increase automation, simplify user experiences, and provide greater organizational flexibility.

• Alphabet reported an all-around beat in Q1 2023, with a steady increase in Google Services and Other revenues.
• There were indications of stabilization and performance in YouTube Ads, while advertiser spending pulled back slightly in the network.
• Alphabet identified Google AI, retail, and YouTube as the three critical areas for long-term growth in advertising.

• Marubeni (8002 JP) and Secom (9735 JP) today announced a Tender Offer to take private Marubeni’s subsidiary ARTERIA Networks Corp (4423 JP) at a 54% premium to the close. 
• Listed 4.5yrs ago, the company hasn’t grown hugely. Revenue growth is slow. EBITDA growth is flat. The takeout is 3.6x book, 7x estimated EBITDA, and about mid-teens PER. Without synergies.
• The price is OK, not great. The Board rejected the final price because it was too low and didn’t include synergies, then accepted because the bidders wouldn’t go further? Hmmm…

• ARTERIA Networks Corp (4423 JP) has recommended Marubeni Corp (8002 JP) and Secom Co Ltd (9735 JP)’s tender offer of JPY1,980 per share, a 54.1% premium to the undisturbed price.
• 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 16.61% ownership ratio.
• The offer is conditional on Chinese and Japanese regulatory approvals. The minimum acceptance condition requires a 33% minority acceptance rate. This is doable as the tender price is attractive. 

• We expect that Shopee is spending more in recent months to defend from TikTok Ecommerce’s growth; 
• Further, we see increased marketing to maintain <FreeFire’s> user base, especially in Indonesia; We suggest that SEA’s strong margin performance in 4Q22 was temporary. 
• We forecast that 1Q23’s net margin is 11.2% vs. 4Q22’s 17.9%. We maintain our SELL rating and US$ 62 TP, implying 27x FY23 P/E.

• On 11 May, it was announced that KT Cloud received a 600 billion investment from IMM, valuing KT Cloud at 4.6 trillion won. 
• Given that KT Cloud is valued at 4.6 trillion won, an 86.6% stake would be worth 4 trillion won which would be 49% of KT’s current market. 
• The investment in KT Cloud is likely to have a positive impact on KT Corp. Plus, KT Corp is a likely candidate for MSCI Korea Standard inclusion in May 2023.

• Unikmind (Teddy Sagi, 54.18% holder), adamant on delisting Kabe, increased the offer price to USD3.60/share. The USD adjusted spread was positive until the offer was sweetened.
• Unikmind has so far c.87.89% acceptances (above 75% threshold), therefore, the delisting will be carried out on an accelerated timeline on 31 May. A squeeze-out is highly likely.
• Closing is on 19 May and settlement should happen on or before 2 June. Spread is 0.31%/5.14%, using FX 1.2614, and assuming settlement on 2 June. Long.

• Unity’s 1Q23 top line was in line with our estimate, and  bottom line was USD 34mn, vs. our est./cons. of USD 4/(3)mn, due to headcount reductions.
• We expect it to outperform in coming quarters because: 1) Create solutions are reducing low margin businesses with low churn rate, 
• 2) Growth solutions continue to gain share driven by integrated Mediation platform, 3) announced AI products with accumulated R&D further diversify Unity toolsets.

• Tata Technologies (TATATECH IN) , a subsidiary of Tata Motors, offers turnkey product engineering and digital transformation solutions to global OEMs and operates across automobiles, heavy industrials and aerospace sectors.
• The company has filed for an IPO in India to raise around US$600m through an offer for sale of its shares by existing shareholders including Tata Motors.
• Though the company’s revenues and margins have seen improvement over the last 2-3 years, we have highlighted a few concerns which investors should wary about.

SenSen Networks (SNS) reported its ninth consecutive quarter of year-on-year record cash receipts in Q323, with growth across all key verticals and no customer churn. The company has also introduced further measures to achieve cash flow positivity and profitability from Q423, focusing on upselling to existing customers and introducing a salary sacrifice scheme for senior staff. We moderate our revenue growth forecasts to reflect these measures but upgrade our profitability and cash forecasts as a result. The short to medium term is likely to see greater focus on the smart cities segment, where the company has established a promising international market presence and where it has considerable scope to expand its engagements in its existing customer base. This positions SenSen well to scale more profitably in the mid-term.

• Q1’23 revenues of €404.4 million, -14.3% QoQ and -3% YoY.
• Q2’23 revenues forecasted flat sequentially with no prospect of a second half recovery.
• Why no H2 recovery ? And why did GlobalWafers outperform Siltronic last quarter?

• 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.
• CELSYS (3663 JP) (formerly known as “Artspark”) is a name we have been Bullish on in the last few months as it was a high-probability TOPIX Inclusion candidate.
• In the last couple of trading days, the stock has popped more than 30%. In this insight, we take a closer look at this situation.

• Bain goes mildly hostile, with a €34/share indicative offer (20.5x EV/Fwd EBIT on IBES consensus), above 11.1x last-10y average. Further, if it fully succeeded, it’d raise to €36/share (21.6x).
• Software AG dislikes the improved indicative offer. The situation reminds of the battle for Caverion Corp (CAV1V FH), now being played, in which precisely Bain has been the unexpected loser.
• At this point, it seems Silver Lake will have to raise its offer again. I raise my TP to €34. Long (possible upside to Bain’s €36/share, 6.1% gross).

• Q1’23 revenues of $1.84 billion, -12% QoQ ,- 5% YoY, but at the high end of the guided range
• Remains on track for >50% wafer capacity growth between 2021 and 2024
• Muted CY’23 outlook sends shares down ~10% by close. Buying opportunity?

• Fujifilm delivered its 4Q and full-year FY03/2023 results today. Revenue and OP increased 15.0% and 63.2% YoY to ¥764.7bn (vs consensus ¥715.7bn) and ¥70.4bn (vs consensus ¥62.5bn) respectively.
• The company’s full-year revenue and OP were above its own guidance as well as consensus, and we think FUJIFILM Holdings (4901 JP) ’s guidance for FY03/2024E is too conservative.
• The market continues to value Fujifilm as an imaging company and not in line with healthcare peers suggesting there is significant upside to the current valuation multiples.

• XPER reported new customer wins with the release of first quarter results. Continued expansion of XPER’s customer base in connected TV and cars affirms our thesis
• XPER had already won a major TV OEM in Europe and has now won a second TV producer planning to use TiVo OS
• XPER announced a global program design win with a Japanese automaker for DTS AutoStage

• ATEN had already warned of the shortfall in Q1 revenue and the official release of the results was an update on the improvement the business has seen in recent months
• ATEN’s management used the first quarter earnings call asserting orders have increased in recent months and ATEN would post sequentially higher revenue in the second quarter
• Network security is not an area we would expect much penny pinching over the course of the year

• UI reported fiscal third quarter (March) results mostly in line with our lowered estimates. The business climate for network hardware has cooled in recent months and Ubiquiti is no different
• Ubiquiti has spent the past year building inventory to meet demand after many quarters of not having adequate supply
• Simultaneous with revenue growth has been an improvement in gross margin. Gross margin is beginning to revert to prior levels of 45 percent and higher

• We believe total revenue will grow by 6% in 1Q23, compared to four stagnant quarters in 2022.
• We also believe operating margin will improve by 2 percentage points YoY in 1Q23 due to the layoff in 1Q22.
• We believe the stock has an upside of 48%, but we reduce our price target from HK$563 to HK$505.

• The review period for the September rebalance of the KOSPI Size Indices will run from 1 June to 31 August. The changes will be implemented at the close 7 September.
• We see 6 migrations from MidCap to LargeCap, 56 migrations from LargeCap to MidCap, 2 new adds to MidCap, and 11 migrations from SmallCap to MidCap.
• Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.

• In this insight, we provide an update of Naver Corp which is our 2023 high conviction stock. Naver’s shares are up 19% YTD, outperforming KOSPI which is up 12% YTD. 
• The total transaction amount of Naver Commerce was 11.6 trillion won (up 19.7% YoY) in 1Q 2023. Poshmark also generated positive EBITDA in 1Q 2023. 
• Naver plans to cancel about 1.6 million treasury shares per year (1% of outstanding shares) in the next three years (for a combined 3% of outstanding shares). 

• China government guided no commission capping on real estate brokerage business, but the ladder-pricing system may lead to moderate commission rate reduction for Beike.
• We estimate that 0.1% of Lianjia commission rate cut can imply to 1.2% of revenue reduction for Beike in 2023. 
• Therefore, we lowered revenue by (2.8%) and net income by (5.3%) to factor in the potential changes.  We maintain BUY rating but cut the TP by US$2 to US$21.  

• Novatek reported earnings ahead of expectations where margins rose thanks to recovery in pricing for its products in inventory. Inventory metrics improved as well.
• Key industry readthrough — Novatek seeing strongest demand for DDICs (display driver chips) coming from the small/medium form factor and highlighted mass production of VR as a cause.
• Apple could be quietly preparing for mass production of AR/VR headset ahead of announcement at June’s WWDC. Combined with Novatek’s comments, could AR/VR will be going mass market this year?

• Meta Platforms had a decent quarter and surpassed Wall Street expectations in terms of revenues as well as earnings.
• The company is progressing in improving its distributed work model, delivering AI tools to improve productivity, and removing unnecessary processes.
• AI recommendations now operate more than 20% of users’ Facebook and Instagram Feeds and over 40% of content on Instagram.

• ASML Holding had a mixed first quarter with below par revenues but performing better than expected on the revenues front.
• Net sales increased significantly due to higher-than-anticipated EUV and deep UV revenue from quicker system installation and earlier acceptance in the quarter.
• The company also shipped 9 EUV systems with significant revenue from 17 systems.

• Hoya has an impressive business model that results in high Returns on Invested Capital
• Hoya reported strong Q4 results but there is little for investors to get excited about in the outlook
• We see a lack of catalysts and an expensive valuation as working against the stock in the short term

• On 8 May, CUBox (340810 KS) announced its IPO price of 15,000 won, which is 13% lower than the lower end of the IPO price range of 17,200 won.
• Our base case valuation of CUBox is implied target price of 22,719 won per share, which represents 51% higher than the IPO price of 15,000 won.
• CUBox claims that it has one of the world’s best technologies in the field of AI face recognition. 

• Bain has a 10.01% stake (likely acquired <€32/share) and could play nasty: its stake is enough to block a squeeze-out, and if it launches a €34/share offer, it will be hostile.
• Meanwhile, Silver Lake (5% recently acquired+25.1% from the foundation) has sweetened to €32/share (19.4x EV/Fwd EBIT, well above 11.1x last-10y average). The Board could change sides (as recently with Caverion).
• The shares trade 3.5% above Silver Lake’s, but at a discount of 2.5% to Bain’s possible offer. The market believes Bain will bid. I raise my TP to €32.

• Q1’23 revenues of NT$18.6 billion, up 14.2% YoY and up ~1% QoQ.
• No specific Q2’23 forecast provided but we fully expect a sequential decline and the end of a 13 quarter growth streak 
• YTD silicon carbide revenues have already exceeded full year 2022 revenues, albeit coming from a low base.

• Corning saw a sequential drop in its total revenues of around 7% in the recent result but this was still better than analyst expectations.
• Despite the lower sales, Corning’s actions to raise prices and restore productivity ratios resulted in gross margin expanding 160 basis points.
• Although multiple markets remain weak, the company expects results to improve in the second quarter.

• Verizon Communications delivered a mixed quarter with below-par revenues despite continued growth of the business across the private and broadband networks, as well as mobility.
• It grew overall postpaid phone gross adds by 5% and achieved 3% wireless service revenue growth.
• Growth is seen for fixed wire access, and it continues to scale and increasingly contributes to revenue performance.

• Fiserv is off to quite a strong start in the year with adjusted revenue growth and an increase in adjusted earnings per share resulting in an all-around beat.
• Adjusted operating margin was up and organic revenue growth was higher than expected, demonstrating the company’s ability to sustain accelerated growth.
• Clover revenue growth stays strong and Fiserv continues to add merchants at quite a healthy pace.

• IBM had a decent start to the year with a mixed result.
• The company’s revenues were below market expectations though it did manage an earnings beat, with free cash flow increasing well.
• Revenue in the data and AI sector increased due to data management, business analytics, asset, and supply chain management growth.

• Lam Research Corporation delivered strong quarter results with revenues, operating margins, and earnings per share above Wall Street expectations.
• The company’s revenue for the quarter was $3.87 billion, a 27% decrease from the prior quarter, witnessing the classic cyclicality associated with the semiconductors industry.
• Foundry-related system revenues reached new highs, indicating the company’s continued success in both cutting-edge and specialty technology categories.

• Texas Instruments managed to deliver an all-around beat in the last quarter even though revenue decreased sequentially.
• Analog revenue declined, embedded processing grew, and its other segment declined in line with the cyclicality in the semiconductors market.
• The industrial market was flat this quarter, the automotive market was up, and personal electronics declined.