In today’s briefing:
- Kokusai Elec (6525) – The Much-Anticipated Lockup Expiry
- Market Chats About What Really Went Down with HPSP This Morning
- Hollysys (HOLI US): Keep Calm as Closing Date Slips
- Quiddity Leaderboard BSE/SENSEX Jun 24: Jio Financial Addition Creates New Possibilities
- Taiwan Tech Weekly: Apple Suppliers Slump on IPhone; PC Volumes Back to Growth; TSMC & ASML Results
- Megastudy Education: A Major Shareholder Return Policy in 2024-2026
- Cancelling CaiNiao’s IPO: What It Means for China’s Express Sector (+Comment on Implied Valuation)
- Novatek (3034.TT): 2Q24F Keeps Growing, and 3Q24F Shall Grow Significantly.
- DXC Technology Company: Will Its Enhanced Go-to-Market Strategy and Business Execution Catalyze Growth? – Major Drivers
- IAC/ InterActiveCorp: Is The Improved User Experience and Premium Traffic Growth Here To Stay? – Major Drivers
Kokusai Elec (6525) – The Much-Anticipated Lockup Expiry
- Last autumn, Kokusai Electric (6525 JP) was IPOed by KKR. The lockup expires next week, on 21 April 2024 (a Sunday). That frees up about 70% of the stock.
- KKR’s own stake is worth about US$2.8bn. It is not clear that Applied Materials, Qatar, or the Koch Strategic Platforms stakes would be for sale (now, or near-term).
- There is an interesting schedule of events between here and a likely offering date. It pays to pay attention to the details.
Market Chats About What Really Went Down with HPSP This Morning
- This morning’s HPSP (403870 KS) situation began with Maekyung’s report, indicating Crescendo PE contacted local bankers for the controlling stake sale.
- The surge in HPSP’s stock price after Maekyung’s report suggests Crescendo PE’s tacit approval, implying their involvement in the news’s emergence.
- Despite the likely confirmed sale of Crescendo PE’s stake, timing remains uncertain due to disclosure rules. Continued monitoring is vital, considering potential market reactions later.
Hollysys (HOLI US): Keep Calm as Closing Date Slips
- On 15 April, Hollysys Automation Technologies (HOLI US) issued a 6-K filing stating that Ascendent remains in the process of obtaining regulatory approvals.
- The gross spread has widened to 8% as the closing date has slipped from the end of March guidance, and an updated timeline is lacking.
- A delay in securing regulatory approvals is not uncommon. However, regulatory approvals should be forthcoming as the transaction involves Chinese entities (including a SASAC entity) acquiring a Chinese-focused company.
Quiddity Leaderboard BSE/SENSEX Jun 24: Jio Financial Addition Creates New Possibilities
- In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the June 2024 index rebal event.
- Wipro Ltd (WPRO IN)‘s deletion from Sensex is imminent but there are question marks over the top replacement names as this involves some subjectivity.
- For BSE 100, Jio Financial Services (JIOFIN IN) is a new potential ADD and that has caused major changes to the index change expectations I had previously.
Taiwan Tech Weekly: Apple Suppliers Slump on IPhone; PC Volumes Back to Growth; TSMC & ASML Results
- Apple supply chain names are falling due concerns about weak iPhone shipments. Global PC shipments returned to growth as per IDC data.
- TSMC and ASML results this week and will be cruical for the market. Can TSMC rally again to achieve new highs or will it continue trading lower?
- Nanya Technology sees DRAM Industry pricing rising through 2024E; but is underperforming financially.
Megastudy Education: A Major Shareholder Return Policy in 2024-2026
- On 16 April, Megastudyedu Co, Ltd. (215200 KS) announced a major shareholder return plan, driving up its share price by 14.2% to 60,400 won.
- Driven by this attractive shareholder return plan combined with improving fundamentals, we believe that Megastudy Education’s shares could continue to outperform the market in the next several months.
- The total shareholder returns including share buybacks/cancellation and dividends are 60% of the company’s non-consolidated net profit from 2024 to 2026.
Cancelling CaiNiao’s IPO: What It Means for China’s Express Sector (+Comment on Implied Valuation)
- A few weeks ago, Alibaba announced it would not seek IPO for CaiNiao
- The change of plans could force BABA/CaiNiao to re-focus on profitability
- BABA will reportedly buy rest of CaiNiao at US$10.2 bn valuation — cheap!
Novatek (3034.TT): 2Q24F Keeps Growing, and 3Q24F Shall Grow Significantly.
- Novatek Microelectronics Corp (3034 TT)‘s sales in 1Q24 showed a 6.2% YoY growth, implying a positive growth outlook for 2024F compared to 2023.
- Looking ahead to 2Q24F forecasts, the anticipated orders from United Microelectronics Corp (2303 TT) could have a positive impact on Novatek’s 1Q24 sales.
- A significant growth is expected after 2Q24, particularly following Novatek’s qualification for the Apple (AAPL US) iPhone 16.
DXC Technology Company: Will Its Enhanced Go-to-Market Strategy and Business Execution Catalyze Growth? – Major Drivers
- During Q3, DXC Technology was observed to have solid performance with the company’s organic revenue growth falling within the guidance range.
- The free cash flow saw an increase of 26% compared to the prior year, amounting to an impressive $585 million.
- However, the report points to declines in various areas such as organic revenue growth, a 4.5% year-over-year decrease, mainly due to the decline in resale revenues.
IAC/ InterActiveCorp: Is The Improved User Experience and Premium Traffic Growth Here To Stay? – Major Drivers
- InterActiveCorp (IAC) has undergone changes throughout 2023 that resulted in substantial earnings growth in the fourth quarter, which is an encouraging indication of the company’s overall strategic direction.
- Among the company’s accomplishments are a solid level of service professional retention, better targeting of service professionals, and improvements in its paid marketing, resulting in higher margins.
- Notably, IAC’s European segment showed strong growth, demonstrating the effectiveness of its strategies when applied in different markets.
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