Daily Brief TMT/Internet: Canon Inc, Alibaba (ADR), Schrole Group Ltd, Chewy Inc, Nano Dimension , Cellnex Telecom Sau, Wemade Co., Ltd. and more

• Canon was late to market with its 193-nm immersion litho tool developed in 2007 causing it to cede the leading-edge litho race to ASML and, to a lesser extent, Nikon
• The company has been working on NanoImprint Lithography as an alternative to EUV since 2004 & was supposedly fast tracked by the acquisition of Molecular Imprints in 2014
• Commercial launch was originally slated for 2015. We’re still waiting. Why?

• On 28th Mar 2023, Alibaba Group (9988 HK) 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 notes, we highlighted which divisions could list and looked at some of the divisions in more detail. In this note, we will talk about the international operations.

• Schrole Group Ltd (ASX:SCL) is an Australian software company focused on providing human resource technology solutions to the international education and training sector.
• Schrole has developed a suite of five HR Software-as-a-Service (SaaS) offerings including the core product, Schrole Connect, a SaaS-based staff recruitment platform.
• Schrole Group has held its CY22 annual general meeting in Perth, noting that it has an ambition of reaching a 25% share of the international schools’ HR SaaS market in the medium term. 

• Chewy will report 1QFY23 financial results after the market close on Wednesday, May 31, 2023. Management expects 1QFY23 net sales of between $2.72B and $2.74B, representing 12%-13% y/y growth.
• I calculate that insiders such as CEO & Director Mr. Singh, CFO Mr. Marte, and other management team sold ~$28M worth of Chewy shares during the last six months.
• My bear case scenario suggests downside on the continued slowdown in consumables, hard goods sales, intense competition in the pet insurance and pet health care segments, and uncertain macro environment.

As previously flagged, Nano Dimension has launched a tender offer at $18/share to buy up to 40.8% of Stratasys shares, with the aim of taking its stake to 55%. This would cost up to $502.7m in cash; we note that Nano Dimension had cash and short-term deposits of $957m at 21 May. On the same day the tender offer was launched, Stratasys announced plans to merge with Desktop Metal.

• The board’s renewal and the arrival of a new CEO (both should be a positive catalyst) are on track and will be completed in the coming weeks.
• Gone the takeover angle, Cellnex’s new strategy focuses on organic growth and deleveraging, aiming an investment grade rating and reducing net debt by end of FY2024 (already 5.6x net debt/2023e EBITDA).
• Cellnex trades at 15.3x EV/Fwd EBITDA, vs. 28.8x American Towers and 24.4x Inwit. TCI may still look for ways to increase the value of its investment.

• Recently, a controversy surrounding substantial crypto investments in the political sphere has exerted downward pressure on the stock prices of major listed game companies in South Korea. 
• In the past five years, there has been a shift in the gaming industry’s risk landscape, with social risks giving way to governance risks.
• Some game companies have started publishing sustainability reports, but challenges arise due to the inconsistency in environmental data and the difficulties in comparing companies.