Daily Brief TMT/Internet: Trend Micro Inc, Kaonavi Inc, Samsung Electronics, ASE Technology Holding , Latent View Analytics Ltd, Sailpoint Technologies Holdings, Sun*, Hon Hai Precision Industry, Dye & Durham and more

• Trend Micro Inc. (4704 JP) shares have hit their daily trade limit, following a Reuters report that Bain, Advent, KKR, and EQT AB are potential bidders. 
• The lack of a controlling shareholder and increased cybersecurity M&A activity support the buyout interest. In 4Q2024, cybersecurity M&A reached the highest quarterly volume in the past three years.
• The valuation is undemanding. If it trades in line with its median peers’ CY2024 EV/Sales and EV/EBITDA multiple, it implies JPY11,500-15,000, a 6%- 38% premium to the current price. 

• Another Japanese smallcap takeover at a huge premium. Must be a day ending in “y.” It is a thing recently. 
• Interestingly, this is NOT an MBO. It is an LBO. Carlyle is buying out Kaonavi Inc (4435 JP) at ¥4,380/share which is 19x book and 89x EBIT. Nice price.
• I expect this gets done easily because the co-CEO with 28.7% and Recruit with 20.6% are putting in. There’s another easy 9.7%. One more holder and this is done.

• Kaonavi Inc (4435 JP) has recommended a tender offer from Carlyle Group / (CG US) at JPY4,380, a 121.2% premium to the last close.
• The offer is attractive due to the high takeover premium, being materially above the midpoint of the target IFA’s DCF valuation range and representing a four-year high.
• This is a done deal, as the required minority acceptance rate is not onerous. The tender offer is from 14 February to 31 March (30 business days).

• The FSS will review the subsidiary approval, with final approval expected from the FSC by early April. Market signals suggest a near-100% chance of Samsung Life getting the green light.
• Samsung’s moves post-Lee Jae-yong’s Feb 3rd ruling signal a major pivot, setting up aggressive value-up plays across Samsung Life, Samsung Electronics, and Samsung C&T.
• Shoring up Samsung Life’s finances triggers a domino effect, positioning Samsung Electronics and Samsung C&T to follow with their own shareholder-friendly moves.

• 4Q24 IC ATM sales recorded NT$162bn, up 1% QoQ, GM: 16.4%, down 0.1% QoQ. EMS sales were NT$74.9bn, down 1% QoQ mainly due to seasonality. 
• 1Q25 EMS sales will decline slightly YoY, and OPM is down 0.13ppts YoY. IC-ATM sales will decline mid-single-digits QoQ and GM is down slightly more than 1% QoQ.
• Believes it will bring upside from new US BIS policy to ban non-listed OSAT vendors (especially China vendors) to produce US-related chip, but can’t quantify at this moment.

• Revenue rose 37.5% YoY and 9% QoQ, boosted by Decision Point contributions and a major deal win.
• Robust growth in revenue and EBITDA underscores Latent View’s ability to secure strategic client wins, strengthening its competitive edge in data analytics.
• Company is tracking towards its $ 100-110 Mn, where they have plan to reach upto $200 Mn in next 3 years.

• SailPoint traded below the issue price for the majority of its first trading session and hit a low of $20.77 before rebounding to a $22.00 print at the close 
• The deal was more than 20-times oversubscribed and upsized its price range while on the road prior to pricing which makes the underperformance even more bizarre. 
• Given the overhang of the underperforming IPO, we will be downgrading our 30-day forecast.

• Revenue reached JPY13.6bn (+8.4% YoY) with operating profit at JPY1.4bn (-18.6% YoY) and recurring profit at JPY1.5bn (-36.2% YoY).
• Number of recurring revenue customers totaled 131 (+8.3% YoY), with enterprise customers at 53 (+29.3% YoY) and SMB customers at 78 (-2.5% YoY).
• Creative & Engineering service line revenue was JPY11.6bn (+6.9% YoY), while Talent Platform service line revenue was JPY2.0bn (+18.2% YoY).

• Honda and Nissan cancel US$60 billion merger due to restructuring clashes, impacting future strategic moves by both companies.
• CXMT progresses to 16nm DRAM production and shifts focus to 15nm development for technological advances in the future.
• DeepSeek emerges as a strong AI player in China, intensifying competition for Apple in the technology market, while the US exit from the Paris Agreement raises concerns globally.

• Dye and Durham is a Canadian-listed real estate and business law service provider with a market cap of $1.3 billion
• Investigation into the company revealed issues such as misleading revenue pull forwards, high churn rates, and a significant drop in log-in traffic
• Former employees raised concerns about financials, governance issues, and unhappy customers with price increases, leading to a drop in market share.

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.