In today’s briefing:
- Tyro Payments In Talks With Westpac
- PT Global Digital Trade (BliBli) Pre-IPO – The Positives – Wide Offering, Strong COVID Bounce Back
- Netmarble Debt Risk Victim: HYBE or NCsoft or Both?
- Softbank Group – The Most Important Number in Q2 Results May Be ARM Royalty Revenue
- Blibli IPO: The Bear Case
- Blibli IPO – Indonesia E-Commerce Is Struggling, Blibli Even More So
- Tyro Confirms Westpac as One of the Interested Suitors
- Viavi Solutions Inc.: The Jackson Labs Acquisition & Other Drivers
- Cloudflare Inc: Launch of CAPTCHA Substitute & Other Developments
- ARLO: Disconnected to Ongoing Growth
Tyro Payments In Talks With Westpac
- Back on the 8 September, payment provider Tyro Payments (TYR AU) rejected a proposal from a Potentia-led consortium at A$1.27/share, by way of a Scheme.
- Tyro has now announced it has received approaches from several parties, including Westpac (WBC AU). “None of these approaches are sufficiently definite … to warrant further disclosure at this time“.
- Shares are currently trading at A$1.59/share. Tyro recently raised its FY23 EBITDA guidance to A$28mn-34mn, up from A$23mn-29mn.
PT Global Digital Trade (BliBli) Pre-IPO – The Positives – Wide Offering, Strong COVID Bounce Back
- PT Global Digital Trade (1437710D IJ) (BliBli) aims to raise up to US$530m in its Indonesian IPO.
- BliBli provides e-commerce services across Indonesia to both retail consumers and institutions
- In this note, we’ll talk about the positive aspects of the deal.
Netmarble Debt Risk Victim: HYBE or NCsoft or Both?
- Netmarble did a one-year rollover for the stock loan used for the SpinX acquisition. The maturity is again one year, and the principal amount is ₩1.5T.
- The HYBE stake is newly included as collateral at an estimated LTV ratio of 50% because the value of NCsoft’s stake further declined, and the LTV ratio was subsequently lowered.
- Applying the 140% loss cut ratio to HYBE and NCsoft will lead to a margin call when each stock declines 30% from the current price.
Softbank Group – The Most Important Number in Q2 Results May Be ARM Royalty Revenue
- We’ve been pessimistic on prospects for ARM and recent news flow and share price performance hasn’t helped but a decent report from TSMC eases some of our concerns
- Softbank needs high teens royalty revenue growth for ARM and TSMC as a bellwether (+30% for Q3 and Q4 guidance) is better than AMD or Nvidia
- We remain more conservative on valuation ($37bn) than Softbank assuming high single-digit growth and c. 43% EBITDA margins
Blibli IPO: The Bear Case
- Blibli (1437710D IJ), a leading Indonesian e-commerce player, has launched an IDR8.2 trillion (US$530 million) Indonesian IPO. Bookbuilding is from 17 to 24 October.
- In Blibli IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The key elements of the bear case rest on weak sector sentiment, an unclear path to profitability, and credible long-term funding to support the high cash burn.
Blibli IPO – Indonesia E-Commerce Is Struggling, Blibli Even More So
- Blibli (1437710D IJ), one of Indonesia’s leading e-commerce platforms is looking to raise around $470-530m via an IPO on Indonesia Stock Exchange.
- Looking at Shopee’s struggles in the past year and Bukalapak’s rapid fall following the IPO, we think investors are unlikely to be interested in the Blibli IPO.
- This could mean that Blibli’s days are numbered as it is resting all hopes on the IPO to fund its short-term loan repayment obligations.
Tyro Confirms Westpac as One of the Interested Suitors
- Tyro Payments (TYR AU) confirmed that it has “received approaches from several parties expressing interest in a potential change of control transaction, including Westpac Banking (WBC AU).”
- Tyro previously rejected a A$1.27 offer from the Potentia consortium. Grok’s get-out clause with Potentia sets the floor price of a competing bid at A$1.52 per share.
- The last close of A$1.59 is higher than the floor price. Triangulating the value of a rival bid across several data points suggests a competing offer of around A$2.
Viavi Solutions Inc.: The Jackson Labs Acquisition & Other Drivers
- Viavi had a strong performance in the final quarter of its fiscal year 2022 and the company delivered an all-around beat.
- For fiscal Q4 2022, the SE business’s revenue was constant from year to year.
- Strong NE bookings during the fiscal fourth quarter led to a seasonally stronger Q1 backlog and demand visibility.
Cloudflare Inc: Launch of CAPTCHA Substitute & Other Developments
- Despite the heightened economic unpredictability, Cloudflare had a good quarter and managed to deliver an all-around beat.
- The company generated $234 million in sales in Q2, up 54% from the same period last year.
- They now have 1,749 customers that pay them more than $100,000 annually after recently adding 212 additional large customers.
ARLO: Disconnected to Ongoing Growth
- ARLO has the help of a product purchase agreement to smooth out lumpiness in consumer spending in the current macroenvironment
- While ARLO is targeting a higher income consumer with products that are priced higher than competition, there is still a risk that could have played out in September.
- Number of paid subscribers should continue to rise in the third quarter with possibility it could be materially higher than our forecast
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
