TMT: Grab, Snap Inc, Taiwan Semiconductor Sp Adr, Hana Micron Inc, Webzen Inc, Kuaishou Technology, Samsung Electronics, Freshworks and more

• Grab‘s latest results sent a mixed message and if looked at YoY the picture looks gloomy but there is a strong sequential recovery with declining incentives for deliveries.
• Mobility is seeing recovery with higher incentives to bring on drivers and consumers but these should start to decline in 2H2022, with company guidance for revenues reflecting this. 
• Grab continues to build its financial services offering through digital payments coupled with BNPL, and growing a digital banking footprint. Valuations are attractive and it has US$8.2bn in cash liquidity.

• Snapchat’s guidedown resulting in a 30% drawdown is fantastical.  6x sales is now 4x sales, near alltime lows.
• Was guide down worth 30% drawdown given already valuation compression and  volatility of Snap guidance? Sour grapes here.
• Of course macro deteriorated. Who is doing Snap’s forecasting? We think forecasting easier to fix than LT competitive moat. We’d buy SNAP…but buy FB first!

In our next Webinar, we welcome Analyst Patrick Liao, who will go over his picks among Greater China semiconductor companies, exploring the outlook for the rest of 2022 and beyond.

The webinar will be hosted on Wednesday, 1 June 2022, 17:00 SGT/HKT.

• There are 12 inclusions and 12 exclusions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the June rebalance to be implemented at the close on 9 June.
• Most of the inclusions were expected, but there are quite a few surprises among the deletions. The impact on the deletions will be higher than that on the inclusions.
• The adds have outperformed the deletes and there has been another leg up in the last couple of weeks. Expect the trend to continue till implementation week.

• Grab raised around US$4.5bn in its de-SPAC listing in Dec 2021. The shares are now trading around 68% below the listing price.
• At the time of listing, all of its top investors were locked up for six months. The lock-up expires on 30th May 2022.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• The additions are primarily in line with the predictions. But, the deletions contain many surprises. Webzen is the biggest surprise. Echo Marketing should also surprise a lot of fund trackers.
• Creas F&C will face the most substantial passive inflow at 4.08x ADTV, closely followed by Unitest. But factoring in liquidity, WYSIWYG Studios will likely draw the most attention
• JNTC will suffer the most among the deletions. However, Webzen will likely be in the limelight as its outflow is by far the largest at ₩8.6B, equivalent to 3.84x ADTV.

• Kuaishou reported 1Q2022 results on Tuesday. Revenue grew 23.8% YoY to RMB21.1bn while reported operating losses declined to RMB5.6bn (27% of revenue) from RMB7.3bn (43% of revenues) in 1Q2021.
• Adjusted operating losses for the quarter further dropped to 24% of revenues from 48% of revenues in 1Q2021 despite drop in livestreaming ARPPU in 1Q2022.
• Kuaishou’s shares have lost almost 80% since its IPO in February last year due to the regulatory crackdown.

• Revenue increased by 24% YoY with online marketing, the main business, up 33% YoY.
• KS operating loss decreased to RMB5.1 bn in 1Q22 from RMB8.2 bn.
• We set an upside of 19% and a price target of HK$75.00. Buy.

• One of the curious share price movements this year has been the outperformance of Samsung Electronics versus other global tech peers including Apple, TSMC, Intel, and Xiaomi.
• Three reasons why Samsung is outperforming global peers such as Apple and TSMC may due to a potential war in Taiwan, COVID lockdown in Shanghai, and new pro-business Korean President.
• Caution is warranted on playing long/short on Samsung, Apple, and TSMC in the coming months as their tides appear to be driven too much by the whims of global politics. 

• Freshworks (FRSH US)  upgraded its revenue guidance to ~$502M at the top end for FY22 and reported a 42% year-over-year revenue growth rate in 1QFY22. 
• We were impressed with subscription revenue growth, lower-than-expected loss, customer expansion, and efficient SaaS metrics. 
• We analyzed multiples of 50 publicly listed software companies with various growth profiles and split SaaS/Fintech companies into four growth groups.