In today’s briefing:
- CATL (3750 HK): The Tail Wags the Dog
- [Japan M&A] Shibaura in Limbo – “Neutral” On Minebea And “Reserves Opinion” On YAGEO Bid, Waiting…
- Shibaura Electronics (6957 JP): Board’s Changed Stance as Minebea Hopes Reg Approvals Derail Yageo
- Tencent/Netease: None Gets Approvals for Domestic Games
- [Sea Limited (SE US, SELL, TP US$134) Rating Change]: Three Has Been a Charm…DG to SELL
- [Tencent (700 HK, BUY, TP HK$584) TP Change]: C1Q25 Review: Outperformance in Low Game Season
- Greenidge Generation Holdings, Inc: 1Q25 Earnings Highlight Debt and Revenue Progress
- AIRE: 1Q25 Revenue Ramps, With Peak Homebuying Activity Still Ahead
- Soluna Holdings, Inc: 1Q25 Earnings Highlight Cash Position and Expectations for Growth
CATL (3750 HK): The Tail Wags the Dog
- The buying in Contemporary Amperex Technology (3750 HK) over the last couple of days has dragged Contemporary Amperex Technology (CATL) (300750 CH) higher as the arbs trade the AH spread.
- The Fast Entry into a global index could keep CATL (3750 HK) supported over the next few trading days, but reality will take hold pretty soon.
- Short CATL (3750 HK) / long CATL (300750 CH) offers great risk/reward, while an outright CATL (3750 HK) short offers higher return albeit at a much higher level of risk.
[Japan M&A] Shibaura in Limbo – “Neutral” On Minebea And “Reserves Opinion” On YAGEO Bid, Waiting…
- Yageo Corporation (2327 TT) approached Shibaura Electronics (6957 JP) for a takeover at ¥4300. Shibaura dismissed them and asked Minebea Mitsumi (6479 JP) to overbid. They did at ¥4500.
- Then Yageo overbid Minebea at ¥5400, who then overbid Yageo at ¥5500, who then re-overbid at ¥6200. Despite not having its FEFTA Approval in place, YAGEO overbid and launched.
- The Minebea CEO objected. We don’t know status. Now the Shibaura Special Committee has paused, supporting but not recommending the Minebea bid and Neutral on Yageo. We are in limbo.
Shibaura Electronics (6957 JP): Board’s Changed Stance as Minebea Hopes Reg Approvals Derail Yageo
- The Shibaura Electronics (6957 JP) Board supports Minebea Mitsumi (6479 JP) JPY5,500 offer, but has shifted its recommendation from tendering to a neutral stance.
- The Board maintains that it is not yet in a position to provide an opinion on Yageo’s JPY6,200 offer due to concerns on feasibility and synergies.
- Minebea hopes Yageo will withdraw due to its failure to secure regulatory approvals. If Yageo secures the required approvals, Minebea will actively consider measures.
Tencent/Netease: None Gets Approvals for Domestic Games
- China announced game approval for the May batch. The number of games approved remained at a higher level than 2023.
- The pace of China’s game approval appears to have accelerated to the same level as pre-tightening.
- Of the companies that we are monitoring, none of them got approval for domestic games but a handful approvals of imported games save their day.
[Sea Limited (SE US, SELL, TP US$134) Rating Change]: Three Has Been a Charm…DG to SELL
- SEA reported C1Q25 top line, non-GAAP operating profit and GAAP net income (3.7%), 10% and 8.4% vs. our estimates and 1.4%, (16%) and 31% vs. consensus.
- SEA has weathered the return of TikTok Shop better than rivals three quarters in a roll, but we see its e-commerce business vulnerable to future attacks.
- We raised TP from US$75 to US$134 but DG to a SELL on rich valuation
[Tencent (700 HK, BUY, TP HK$584) TP Change]: C1Q25 Review: Outperformance in Low Game Season
- Tencent reported C1Q25 rev., IFRS op. profit, and IFRS net inc, in-line, (3.1%), (5.6%) vs. our est. and 3.8%, (2.3%), (4.9%) vs. cons.
- As predicted, Tencent maintained a transitional game quarter well, going forward new game launches shall fill the pipeline while recovering consumption helping on advertising and fintech.
- We raised our TP to HK$584 for better outlook and place Tencent back to the TOP BUY list. Our TP implies 21x PE.
Greenidge Generation Holdings, Inc: 1Q25 Earnings Highlight Debt and Revenue Progress
- Greenidge announced a solid 1Q25, with revenue of $19.2 million, roughly flat Y/Y, and debt reduction of $12 million from the original $72 million to $60 million.
- The company had $13.3 million in cash and Bitcoin at the end of the quarter.
- CEO Jordan Kovler said, “This past quarter, our team’s disciplined execution and prudent financial management have significantly advanced the turnaround of our business and operations.
AIRE: 1Q25 Revenue Ramps, With Peak Homebuying Activity Still Ahead
- GTG Financial was acquired in late February 2025 and so did not make a full quarter impact on AIRE’s consolidated results.
- Even so, since closing the acquisition during the quarter, GTG contributed to originating 36 mortgages in 1Q25, representing total loan volume of about $22.4m.
- 2Q25 – with peak homebuying activity underway – will mark the first quarter with full GTG contribution.
Soluna Holdings, Inc: 1Q25 Earnings Highlight Cash Position and Expectations for Growth
- Soluna recently announced its 1Q25 earnings an business update, with revenue of $5.9 million, 220 MW of new project development (698 MW total), and a solid cash position.
- The company has also simplified its capital structure by fully converting its notes last year, restructuring its Preferred B equity, paying off it Navitas loan, and securing $5 million in non-dilutive financing from Galaxy Digital.
- CEO John Belizaire said, “Our outlook shines brighter with expanding project development at Projects Rosa, Ellen, and Hedy.
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