Daily Brief TMT/Internet: Link Administration, Nanya Technology, Ant Group, Adobe Systems, Jabil Circuit, Kuaishou Technology, Intel Corp, PagerDuty Inc, Sunny Optical Technology Group, Science Applications Inte and more

• Back on the 18 December 2023, superannuation service provider Link Administration (LNK AU) entered into a Scheme with Mitsubishi UFJ Financial Group.
• MUFJ offered Link shareholders A$2.10/share (in cash) plus a A$0.16/share dividend (25% franked), or a 32.9% premium, all-in. 
• The Scheme Meeting will now take place on the 24th April, with expected implementation on the 16 May. This looks done – and trading accordingly. 

• Micron shares have soared after the company reported its latest results with forward margin guidance well above consensus expectations.
• Micron appears to be successfully leapfrogging into ther HBM memory space, and says that its production for 2024E is sold out and for 2025E is already all ‘allocated’.
• Taiwan’s Nanya Tech has lagged its peers by a wide margin; Nanya lacks HBM products however HBM market demand is driving supply tightness for all DRAM.

• Chinese fintech giant Ant Group Co. Ltd. has completed the reshuffle of its consumer lending businesses Huabei and Jiebei, wrapping up a years-long, government-driven overhaul, a person close to the matter told Caixin.
• Ant’s two wholly owned small loan business units, the operators of Huabei and Jiebei, have fully exited the businesses during the past year.
• The two brands have been incorporated into Chongqing Ant Consumer Finance Co. Ltd. (CACF), a subsidiary set up in 2021 that is 50% owned by Ant, according to the person close to CACF.

• Adobe Inc.
• delivered robust financial results for the first quarter of fiscal year 2024, with a revenue of $5.18 billion.
• This represents a 12% year-over-year growth, demonstrating the significant role of Adobe products in powering the global digital economy.

• The second quarter of fiscal year 2024 saw Jabil Inc.
• achieve approximately $6.8 billion in revenue.
• This performance was in line with the guidance for the majority of the company’s businesses.

• Kuaishou reported C4Q23 revenue, IFRS OP, and IFRS net income in line, 31%, and 51% vs.  our estimates; and in line, 43%, and 67% vs. consensus.
• The significant profit beat was mainly due to the rich content supply on the platform that led to organic traffic influx, resulted in marketing costs reductions. 
• We raised our TP by HK$2 to HK$81, implies 20X PE, vs. current trading at 13X PE for 2025.

• Intel snags $8.5 billion in direct funding through the CHIPS and Science Act to advance its commercial semiconductor projects in Arizona, New Mexico, Ohio and Oregon.
• Investment Tax Credit (ITC) of up to 25% on > $100 billion in qualified investments and eligibility for federal loans up to $11 billion are also on offer
• Meanwhile, two separate reports suggest delays of up to two years in Ohio and suppliers in Arizona unable/unwilling to meet previous commitments to establish local supply chains. Ouch!

• In the Fourth Quarter and Full Fiscal Year 2024 Results, PagerDuty demonstrated solid growth, indicating the company’s steady progression in the market.
• The full-year revenue grew 16% year over-year, and non-GAAP operating margin expanded to 13%.
• Similarly, in the fourth quarter, revenue grew 10% to $111 million, exceeding the high end of the company’s guidance range.

Sunny Optical has released its FY 2023 numbers, which were weak but in line with expectations. Revenue declined 4.6% y-o-y to CNY 31.7 bn, due to lower shipments of handset-related products. Gross profit tumbled c. 30% to CNY 4.6 bn, with the margin shrinking to 14.5%. OCF plunged 64% to CNY 2.7 bn, while capex decreased slightly. FCF was therefore positive, albeit significantly lower. That said, the financial risk profile and liquidity remain healthy, supported by a large net cash position.

We believe the industry operating environment will stabilise. The company marked seven consecutive months of double-digit shipment volume growth in February 2024, indicating that the recovery in the smartphone market is continuing. We expect shipments to stabilise at this level, which will represent a robust increase from the FY 2023 numbers. We project positive revenue and earnings growth in FY 2024.

• Science Applications International Corporation (SAIC) delivered strong performance in the fourth quarter of fiscal year 2024 due to its focus on value provision to customers and a favorable funding environment.
• This resulted in significant revenue growth and throughout the fiscal year, pro-forma revenue increased by over 7%.
• The underlying business execution remains robust, as evidenced by the 11% increase in free cash flow per share and a 50 basis point increase in EBITDA margins, over last year.