Daily Brief TMT/Internet: Shinko Electric Industries, Tencent, Sakura internet, Reddit , Endeavor Group Holdings , United Microelectronics Corp, Taiwan Semiconductor (TSMC), GoodRx Holdings Inc, Synopsys Inc, Centralnic and more

• Shinko Electric Industries (6967 JP) pre-conditional tender offer from the JIC alliance is JPY5,920 per share. The gross spread has narrowed from a high of 10.4% to the current 4.2%. 
• The narrowing spread can be attributed to the JSR Corp (4185 JP) tender launch, which suggests likely China SAMR approval, and Ibiden Co Ltd (4062 JP) giving up recent gains. 
• Like JSR, we expect China SAMR to allow JIC to withdraw its Shinko merger control filing. There is a good chance the tender launches before the guided late August start.

• Tencent is due to release FY23 results tomorrow morning after the HK close. The earnings call is scheduled for 14:00 SAST.
• The market is expecting 1.8% QoQ revenue growth, 8.6% YoY. Strong QoQ revenue growth of 10% is expected for the advertising segment.
• QoQ revenue growth for the gaming sector is expected to decline by 4.9%. Domestic gaming revenue is expected to fall by 7.6%, international gaming revenue expected to increase by 9.6%.

• The share price of Sakura Internet has risen by over 500%, adding Y230 billion in market cap, since investors began pricing in the AI opportunity
• We use pricing data from Amazon AWS to model the revenue opportunity for Sakura’s GPU AI-cloud
• We estimate that 2,500 H100 GPUs could yield an equity value of Y49 billion, far less than the value the market has ascribed

• Reddit (RDDT US) is looking to raise up to US$750m in its US IPO. 
• Reddit is an online social media platform where users are able to join communities, engage in conversations, research, exchange goods and services as well as create new communities.  
• In this note, we talk about the company’s historical performance.

• EDR is likely to be acquired at a premium price in the near future, offering an attractive risk-reward opportunity for investors.
• Key assets like a stake in TKO, talent representation business (WME), and events business (EE&R) are considered valuable to potential buyers.
• EDR announced a review of strategic alternatives on 10/25/23, with CEO Ariel Emanuel noting the need to maximize value for shareholders due to a disconnection between stock price and asset value.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• The results for 1Q24F should remain unchanged, even though we anticipate a slight upside.  
• UMC’s outlook for 2Q24F is deteriorating, with a likely decline 5-10% QoQ.
• The demand from UMC’s clients is not improving in 2Q24F.

• Taiwan Semiconductor (TSMC) – ADR (TSM US) revenue growth target for 2024F is set at 25% or higher.
• TSMC’s dominance in the CoWoS market, with nearly 100% share, positions them well.
• TSMC’s plans to establish a new Fab in Chiayi, Taiwan, reflect the growing end demand.  

• This is our first report on GoodRx Holdings Inc.
• The company announced its fourth-quarter earnings and highlighted significant progress which included saving consumers approximately $15 billion last year, increasing their access to affordable medications while expanding their relationships with retail partners through hybrid retail direct and Pharmacy Benefit Manager (PBM) contracting and cost savings initiatives.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Synopsys (SNPS) is recommended as a good long-term holding
• Software Integrity business likely to be divested to improve overall profitability
• EDA and IP divisions of the company have been performing well with adjusted operating margins of over 30%

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Team Internet’s FY23 results exceeded our forecasts and consensus on revenue and EBITDA. Online Marketing was driven by increased consumer engagement, reflecting investment in delivering more targeted ads across a wider array of channels. The group’s latest acquisition, Shinez, strengthens Online Marketing via diversification of publishers and is earnings accretive with scope for further synergies. Online Presence returned to strong revenue growth, driven by demand for exotic domains, pricing optimisation and strategic partnerships. Robust free cash flow enabled diverse capital allocation, focused on shareholder returns.