Daily Brief TMT/Internet: Globalwafers, Roland DG Corp, Micron Technology, Tencent, Delta Electronics, Bharti Hexacom, WCP, Charter Communications , Oracle Corp, Zhejiang Taimei Medical Technology Co Ltd and more

• Globalwafers (6488 TT) is looking to raise up to US$681m in its GDR offering. The proceeds will be used to purchase raw materials overseas.
• The deal is a somewhat large one to digest at 20.2 days of three month ADV and the proceeds will be used to purchase raw materials overseas. 
• In this note, we run the deal through our ECM framework and comment on deal dynamics.

• In response to Roland DG Corp (6789 JP) request, on 22 March, Taiyo said it was considering a revised offer. However, Taiyo has since remained silent. 
• Despite discussions with Brother Industries (6448 JP), the Board have not been able to eliminate dis-synergies concerns. The Board has left the decision to accept the Taiyo offer to shareholders.
• While the Board is trying to dissuade Brother, Brother will take its offer directly to shareholders if the Taiyo offer fails. Taiyo’s behaviour suggests a reluctance to bump. 

• I wrote about this in my recent post about HBM, and it seems almost everything I talked about became true. HBM is going to bail out the memory markets meaningfully.
• Let’s talk about earnings, but I was hoping you could keep this post in mind while I discuss Micron.

• These are the kinds of beats we start to see when the cycle turns. Now, the stocks have begun to anticipate this, but given the pricing dynamics of HBM, I feel very confident in Micron’s ability to hit a new cycle high in profitability.

• Tencent reported C4Q23 revenue, IFRS operating profit, and non-IFRS net income in-line with our estimates and in-line with consensus, with non-game revenues exceeding while game revenue missing expectations;
• We believe the shift from game to non-game should enhance Tencent multiples but the market might have concerns on the sustainability of this change. 
• We believe this change is sustainable with game revenue reaccelerating and non-game revenue continues to gain weight. We cut TP by 3% to reflect slow game recovery in C1H24.

• Delta Taiwan Outperforms Delta Thailand After Showcasing Its AI Power Efficiency Solutions at NVIDIA Corp (NVDA US)’s GTC Conference 
• Delta Taiwan vs. Thailand Valuation Mismatch Has Corrected Further; Delta Thailand Finally Worth Less Than Its Parent
• Short Interest Spiked for Delta Taiwan; Taiwan Rally Short-Term Overdone Due to AI Concept Stock Hype?

• Bharti Hexacom (6597372Z IN), a 70% owned subsidiary of Bharti Airtel (BHARTI IN), aims to raise up to US$513 million at an IPO price range of Rs542-570 per share.
• In Bharti Hexacom IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on low geographic diversification, slowing growth, share overhang from TCIL’s desire to exit fully, mid-tier revenue growth and EBITDA margin. 

• WCP raised around US$314m via selling a mix of primary and secondary shares in its Korean IPO. The lockup on some of its parent’s stake will expire soon.
• WCP designs, manufactures, and sells separators, which are one of the four core materials for secondary Lithium-ion batteries.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• Charter Communications is contending with a narrowing competitive advantage in the cable industry due to the entrance of new rivals like fiber overbuilders and fixed wireless providers.
• The company must make ongoing capital investments to stay competitive, despite uncertain returns on these investments.
• Charter’s aggressive capital allocation approach, motivated by management incentives, is raising doubts about the company’s investment potential and future outlook.

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• Oracle Corporation had a strong performance in its third-quarter fiscal year 2024, with revenue in-line with expectations and EPS $0.02 above the high-end guidance.
• However, both potential future performance and inherent risks were noted, which investors should closely observe.
• A significant part of the discussion was centered on Oracle Cloud Infrastructure (OCI), tagged as the primary driver for the company’s overall revenue acceleration.

• Taimei has transformed from a classic SaaS model to an industrial Internet platform, with value-added digital services as main source of revenue.However, this may not necessarily bring better financial performance.
• Considering declining revenue growth/gross margin, as well as constantly increasing customer acquisition cost, it’s highly uncertain whether Taimei can successfully turn losses into profits in 2025 as expected by management.
• The significant valuation changes in Series E/E+/F Financing attracted the attention of Shanghai Stock Exchange.Taimei is actually not confident in its future performance. Its valuation could be lower than Yidu.