In today’s briefing:
- Now Link Admin Takes A Bath – Time To Buy
- Link’s Shares Collapse as Worries of Buyer’s Remorse Sets In
- Ricoh (7752) Buyback – Big, But Not. But Not Small.
- TSMC (TSM.US; 2330.TT): Further Wafer Price Raise About 6% from the Beginning of 2023
- Capcom – Can They Keep Suppressing Profit?
- SMIC (981.HK): 2Q22 Preview- We Estimate Around 5% Growth Could Be the Case
- Coupang 1Q 2022 Earnings: Beats Consensus Earnings Estimates (A High Conviction Turnaround Play)
- Chainalysis: Blockchain Service Capturing Crypto Crime
- AyasdiAI: Exposing Financial Crime Using Topology
- Forter: New Products and Strong Partnerships Driving Growth for Fraud Solutions
Now Link Admin Takes A Bath – Time To Buy
- Link Administration Holdings (LNK AU) cratered this morning ahead of a pause in trading.
- Link said it is unaware of the reason for the decline; however, the unfortunate timing of the ACCC delay and the MAC disconnect between Offeror and Target are not helping.
- Break price fair value has emerged. Separately, Link is coming up “cheap” versus its holding in PEXA Group (PXA AU).
Link’s Shares Collapse as Worries of Buyer’s Remorse Sets In
- Link Administration Holdings (LNK AU) claims to be not aware of any reason for today’s -15% share collapse. The market seems nervy that DND will exhibit buyer’s remorse.
- The scheme consideration is now 2.6x DND’s market cap. The ACCC delayed review and the contract renewal MAC clause could be DND’s get-out-of-jail-free card for a lower price/walk-away.
- Our “deal-break” SoTP valuation suggests a valuation of A$4.24 per share, which is broadly in line with the last close price. The next catalyst is DND’s results tomorrow.
Ricoh (7752) Buyback – Big, But Not. But Not Small.
- Ricoh Company Ltd (7752 JP) announced earnings disappointed, but guidance is above forecast as some Q4 business was pushed back.
- The company also announced a buyback. The headline at 7.5% of shares out is big. Reality is lower.
- This sets up a somewhat complex dynamic of flows in near space and far space, and relative to peers. But we look at it anyway.
TSMC (TSM.US; 2330.TT): Further Wafer Price Raise About 6% from the Beginning of 2023
- TSMC decided to notify clients that it will raise wafer price about 6% from the beginning of 2023.
- It’s believed the Fabless company’s margin could be raised too much, which is considered to be abnormal.
- There are too many factors influencing the market right now, like the inflation, geopolitical confrontation, Russia-Ukraine war, supply-chain risks, and etc.
Capcom – Can They Keep Suppressing Profit?
- Capcom results were previously flagged with a late guidance upgrade and so were unsurprising.
- Guidance was a touch above consensus at both the revenue and OP levels but look somewhat conservative even on assumed unit volumes.
- But we think there is significant upside to unit volumes and Capcom’s biggest challenge will be to hold down profit so they can generate double digit growth the year after.
SMIC (981.HK): 2Q22 Preview- We Estimate Around 5% Growth Could Be the Case
- We think SMIC is likely to reach the high-end of 1Q22 guidance, which was US$6,259~6,368mn/36~38% respectively.
- We thick SMIC is likely to reach ~US$6,680mn/39% for revenue/GM respectively in 2Q22.
- SMIC cannot have the EUV machine because of the Wassenaar Arrangement. Therefore, SMIC has to optimize its operation and to expand 28nm and above technologies.
Coupang 1Q 2022 Earnings: Beats Consensus Earnings Estimates (A High Conviction Turnaround Play)
- Coupang reported better than expected results in 1Q 2022. Coupang had operating loss of $205.7 million in 1Q 2022, which was 31% better than consensus.
- This is a High Conviction turnaround story marked by significant improvement in profit margins. The company’s gross profit increased by an impressive 42% YoY.
- Given Coupang’s excellent earnings in 1Q 2022, the tide has turned on Coupang and there is likely to be improving positive sentiment on this stock in the next several weeks.
Chainalysis: Blockchain Service Capturing Crypto Crime
- Chainalysis (1316611D US) is a leading blockchain data platform which helps carry out investigations into illicit crypto activity and hence prevent crypto crime.
- Around 2/3rd of Chainalysis’ revenue comes from government agencies and the company is said to have generated around US$ 10m from Federal Organisations since inception.
- There are now several growth drivers including a fast-rising level of crypto crime, growing cryptocurrency market and implementation of cryptocurrency regulations among others.
AyasdiAI: Exposing Financial Crime Using Topology
- Ayasdi (0343503Z US) is somewhat unique in it using a mathematical framework – topology, to analyse data sets and detect financial crime and fraud.
- The company follows a quote-pricing model, but pricing is generally considered less expensive than the industry average.
- The growth of financial crime and the bioinformatics industry alongside improved recognition for the company can be expected to drive future revenues.
Forter: New Products and Strong Partnerships Driving Growth for Fraud Solutions
- Forter (1397978D LN) uses machine learning to detect fraud and approve online transactions in real-time.
- With the surge in online shopping with COVID-19, the amount of online fraud increased, allowing Forter to experience strong revenue growth.
- New product innovations and a number of strong partnerships will continue to drive the company forward.
Before it’s here, it’s on Smartkarma
