In today’s briefing:
- Taiwan Tech Weekly: Nvidia’s Latest Strategy Unveil Tonight; AUO Says PC Panel Demand Normalizing
- GoTo: Ambitious Profit Target to Further Stall Growth
- India: AMFI Stock Reclassification Preview (June 2023)
- Oak Holdings/Vantage Towers: Delisting Agreement
- [YY US]: Maintain SELL for Cost Rebound and Competition
Taiwan Tech Weekly: Nvidia’s Latest Strategy Unveil Tonight; AUO Says PC Panel Demand Normalizing
- Nvidia CEO to unveil new developments at the company’s GTC developer conference tonight Asia time. TSMC and ASML could have read-throughs from the event given their key roles.
- AUO’s chairman said that he expects PC panel demand to return to normal levels later this year; indicating another sign of potential improvement in the PC and display space.
- PC maker Asustek was a top loser in the past week; we highlight it as a potential Long/Short opportunity.
GoTo: Ambitious Profit Target to Further Stall Growth
- GoTo (GOTO IJ) reported 4Q2022 and full-year 2022 results yesterday. Gross revenue increased 18.0% YoY to IDR6.3trn while adjusted EBITDA losses declined to IDR3.1trn vs IDR6.5trn in 4Q2021.
- However, adjusted EBITDA as % of net revenues has increased considerably compared to 3Q2022 due to increase in variable costs.
- GoTo’s ambitious profitability target would prevent the company from fully exploiting growth opportunities which will lead to further decline in growth rates.
India: AMFI Stock Reclassification Preview (June 2023)
- Nearly halfway through the review period, we see 10 stocks moving from MidCap to LargeCap and vice versa, and 9 stocks moving from SmallCap to MidCap and vice versa.
- Financials are poised to be the biggest gainers in the reshuffle with 6 stocks moving from MidCap to LargeCap and 5 stocks moving from SmallCap to MidCap.
- Over the last 6 months, stocks expected to migrate upward have outperformed stocks that are expected to migrate downward., though there has been a downward drift this year.
Oak Holdings/Vantage Towers: Delisting Agreement
- Vantage Towers and Oak Holdings have concluded a delisting agreement after all takeover conditions were met. Oak Holdings intends to offer a cash consideration of €32/share to holdouts.
- The stock is trading 4.25% above the delisting offer price, thus it seems difficult that a lot more shares will be tendered.
- Elliot has a 5.61% stake in Vantage Towers, enough to prevent a squeeze-out and can exert pressure to obtain the DPLTA to include favorable terms (higher interest).
[YY US]: Maintain SELL for Cost Rebound and Competition
- JOYY reported 4Q22 top line of US$ 605 mn, beat our est. by 3.2%, and GAAP net income turned negative mostly due to investment loss.
- With limited catalyst for top line, increasing operating expense and content cost to cope with competition would put pressure on bottom line.
- Maintain SELL rating and cut TP to US$ 23.7, implying 12.6X PE in 2023.
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