Information Technology Archives | Page 16 of 18 | Smartkarma

• Lasertec has been the darling of the SPE sector over the last few years, rising a 122x from mid-2016 to the peak at the start of this year. 
• With a commanding position for EUV inspection systems and its new ACTIS systems on deck the excitement is understandable. 
• The valuations though are not, and the share price has now clearly started to break down.

• The focus of this article is on the company’s announcement that it will buy back up to 10 billion yen (5.5 million shares, or 2.11% of the total outstanding shares).
• Without explanation of how Brother will actually allocate the expected cash flow between investment and shareholder-return, it is impossible to fully answer why the amount was set at JPY10 billion.
• Capital Allocation is not well explained, and not many investors are paying attention to our niche business, but we should get more attention because the company is a cash cow.

Info Edge Ltd (INFOE) delivered better-than-expected revenue in 3QFY22, with standalone revenue growth of 48% YoY (estimate of +42%). On the other hand, the EBITDA margin missed estimates due to higher ad spending in the 99acres business. 3Q billing also came in ahead of our estimate, led by a large beat in Naukri (80% YoY). The management has indicated continued strength in the Naukri business over the near term, along with the large impact of a price increase in FY22E billing.

• Allied Telesis is a Japan-listed business with a long US history making networking equipment and solutions for corporate customers. 
• The company received a legal settlement today which is worth a fair bit to them.
• The company had already had the best 12 months earnings history in years, while the stock is trading at long-time lows. This could get exciting.

• Keyence’s 3Q numbers were noticeably stronger than consensus with revenue at ¥190bn (just below our estimate of ¥192bn+) vs. consensus at ¥182bn. 
• OP also beat by 4.2% but was held back slightly by high SG&A. 
• Nevertheless, this should move the outlook for 4Q up significantly setting up a reasonable full year beat and better prospects for next year.

• The GlobalWafers announced the deal to merge Siltronic did not get the approval by Germany government this morning. We maintain our Target Price for GlobalWafers doesn’t change at NT$880~960.
• The GlobalWafers points out that the results will not influence business activities, and the European market remains the importance for GlobalWafers.
• Comparing to 20s years ago, we think the semiconductor market has experienced a dramatic changes already.

• Hoya Corp (7741 JP) reported 3QFY03/2022 results today. Revenue grew 16.6% YoY to JPY171.3bn (vs. consensus JPY162.1bn) and OP grew 17.0% YoY to JPY53.5bn (vs. consensus JPY51bn).
• Life Care revenue which was severely impacted due to Covid-19, exceeded pre-Covid levels with a 11.7% YoY increase. IT revenue continued to maintain its momentum during the quarter.
• Hoya has slightly upgraded its full-year forecasts and also has announced a share buyback program for JPY60bn.

• There is lots of competition for Li-Ion batteries and also for silicon anode Li-Ion batteries
• Enovix is a going concern and has a material internal control weakness
• With facilities that need to be built, lacking firm contracts with customers/suppliers, and unfinished products, lots of things need to go perfectly.

• For this March rebalancing, the screening base date is January 28, which is the last trading day of January. So, the 3-month rebalancing review period is now done.
• Other than LG Energy (+₩146,2B), we should pay the most attention to AfreecaTV (+1.70x), Chunbo (+0.36x), Douzone Bizon (-4.82x), and SoulBrain (-0.99x).
• In addition, large-cap stocks such as SKIET (+0.25x), Ecopro BM (+0.10x), LG Chem (-0.62x), and Posco Chemical (-0.30x) will likely draw much attention.

• Intellect Design Arena (Intellect) provides software products to retail, corporate banking, insurance & treasury.
• The company is a transition from a product company to a platform company
• Intellect generates 55% of revenues from developed markets and rest from emerging markets Recently, it saw a turnaround in margins (from 5% in FY20 to 23% in FY21)

• On 1 February, Siltronic announced that the public tender offer by GlobalWafers will not be completed as offer conditions have not been fulfilled within the applicable deadline.
• Germany’s Economy Ministry could not complete all the necessary review steps. The deal rationale was compelling. Wacker Chemie still intends to sell its remaining 30.83%. GlobalWafers may bid again.
• As the industry deals with overcapacity, Siltronic could be worth more as a standalone business. Longer term, TP is €162.64/share (comparables based), 12% above Siltronic’s offer

• Court and EGM meetings are scheduled 2 February. Aristocrat is the only suitor remaining.  Some investors in Playtech who anticipated a bidding war aren’t too keen to support the deal.
• The Board threatens with a break-up and auction of both Snaitech and the B2B white label software division. Analysts believe that the business is worth more than the current offer.
• Reiterate long PTEC LN, TP 680/share (Aristocrat offer), with the potential upside risk of a sweetened offer to placate some investors, or a break-up.

• Koei Tecmo delivered strong results with revenue of ¥18.1bn and OP of ¥10.7bn comfortably beating consensus of ¥16.2bn and ¥5.7bn respectively. 
• OP guidance was raised from an absurdly conservative ¥24.5bn to a still conservative ¥31.5bn, below consensus at ¥33.6bn. 
• While these results look broadly positive we are concerned that the recent sell off may continue.

• Overall, we have a positive view of SK Hynix’s new dividends and total shareholder return policy. 
• We estimate SK Hynix’s dividend yield could be 1.3% in 2022 and 1.5% in 2023. We estimate its total shareholder returns could be 3.3% in 2022 and 5.4% in 2023. 
• However, this is based on the consensus free cash flow estimates and also there is uncertainty in the timing of potential share buybacks from 2022 to 2024. 

• Coforge offers system integration, apps & BPO services to BFSI, travel & healthcare verticals.
• Revenues and PAT grew at a CAGR of ~12% each over the past five years
• Target Price and Valuation: We value Coforge at Rs 5870 i.e. 30x P/E on FY24E EPS

• Kuaishou’s share price has climbed more than 20.0% YTD as the company has increased its focus on e-commerce while also narrowing down its costs.
• The company opened its e-commerce store to local merchants in China including food delivery, healthcare, hospitality and entertainment ticketing.
• According to news media outlets, the e-commerce GMV hit RMB650bn (US$102bn) in 2021 from RMB381bn in 2020. This figure is expected to go up to RMB900bn in 2022E.

• Infosys is India’s second-largest provider of consulting and IT services to clients across the globe
• It is also among the fastest-growing IT services organization in the world and leader in the offshore services space
•  The company provides business consulting, application development and maintenance, and engineering services to 1,738 active clients

• Birlasoft Ltd (Birlasoft) has strength in non-ERP digital businesses like CRM, B & data analytics, app development & enterprise solution.
• The company caters to manufacturing, BFSI, energy & utility and lifescience
• Target Price and Valuation: We value Birlasoft at Rs 540 i.e. 23x P/E on FY24E EPS

• Coforge Ltd (Coforge) Q3FY22 results stood below our expectations. The company’s revenue grew by 4.2% QoQ in CC terms to Rs 1,658 C
• Operating profits were reported at Rs 323 Cr, exhibiting a growth of 8.8% QoQ and operating margins witnessed a marginal growth of 90bps QoQ and stood at 19.5%
• We recommend a BUY rating on the stock and assign a 28x P/E multiple to its FY24E earnings of Rs 177.8/share which gives a TP of Rs 5,060 /share. TP implies an upside of 15% from CMP.

• Substantial disagreements over the video streamer DouYu International’s strategic direction, prompts ownership re-think at Tencent; 
• Tencent is allegedly privatizing Douyu near the bottom of the market; and 
• Unlike the JD.com move, this transaction maximizes shareholder value while getting into regulatory compliance.

• Advantest shares are down 19% from their Jan 4th high after a post earnings rally on Friday. 
• While order momentum remains strong it has moderated slightly since 2Q and longer-term risks are a concern. 
• What remains to be seen is how sustainable Chinese demand is given its steady rise since 2016.

• Korean prefs have outperformed ords on a YTD basis, probably due to the LG Energy listing. Many of KOSPI’s large-cap stocks have seen an outflow to make room for LGES.
• Samsung Electronics 1P and Mirae Asset 2PB have a negative pref-ord YTD yield difference and are currently below-1.0σ on a 20-day MA.
• Mirae widened the pref-ord spread by announcing an ord-only share buyback. So it should be seen as an outlier. Then, virtually all that remains is the Samsung Electronics 1P.

• We are broadly negative the FA sector as we expect earnings to fall next FY for most players and valuations are extended. 
• Keyence is an exception in that we expect further growth next year although valuations are extended even for Keyence. 
• We believe this is because the market is pricing in its greater earnings resilience but maybe not quite enough.

• Market Research expects that e-commerce will grow 15% and 13% in following two years.
• Big platforms, such as Alibaba and JD.com will still have advantage in the growth.
• The risk is that consumers care significantly more about product brand than platform reputation.

• Tencent is reportedly considering taking Douyu private, potentially in partnership with a PE fund. 
• Given weak earnings and reports of strategic confusion within management this is not entirely surprising. 
• While the news is positive for Douyu we would prefer to look one connection away at the implications for the less troubled Huya.

• SenseTime Group (20 HK) listed just prior to review cutoff and will be eligible for inclusion in the Hang Seng Tech Index (HSTECH INDEX) at the March rebalance.
• We expect SenseTime Group (20 HK) to be added to the index and replace Autohome (2518 HK) at the close of trading on 4 March.
• The real float of SenseTime Group is much lower than what HSIL is likely to use. Expect a BIG squeeze if the stock is added at a higher float.

• The rebalancing cycle of the KODEX Secondary Battery ETF was changed from semi-annual to quarterly. Also, the rebalancing trading takes place for three trading days instead of one trading day.
• This passive impact will be different from the previous rebalancing. LG Energy and SK Innovation will likely experience a significant passive outflow. Then, most small-cap constituents will receive an inflow. 
• Among the top weighting stocks, Samsung SDI and SKIET deserve attention. Sangsin Energy, E&D, and TSI will face exclusion, while C&I, Sang-A Frontec, and Enchem will likely join the ETF.

• Intel is promising is that it will advance five process nodes over the next four years, recapturing process leadership from TSMC by 2025, but significantly underspending TSMC in capex.
• Overearning in datacenter is unwinding, leading to lower profits…overearning in PCs will unwind in 2022, leading to lower profits.
• Lower profits and higher capex means less buybacks to support earnings growth. 

• Blowout 4Q21 results headlined by (adjusted) 38% subscription billings growth – unbelievable for a company this size. 
• Generated a Rule of 75 Quarter (29% revenue growth + 46% FCF margins)
• Multi-Module adoption continues to ramp, large deal sizes continue to ramp. At 12x forward revenues…incredible entry point.

• News reported that Alibaba is in talks with Shanghai Media Group to sell its 30% stake in Weibo Corp (WB US), which we have expected since Weibo’s Hong Kong listing.
• Since 2013, Alibaba has started to invest in Weibo before its NASDAQ IPO and continued to increase the holdings. Alibaba remains a strategic partner with Weibo on platform advertisement.
• We view the potential transaction net positive for Weibo Corp (WB US) as it will realign Weibo strategic direction and Alibaba impact will be minimized. Weibo valuation is also attractive.

• MediaTek’s 4Q21/1Q22 revenue/GM is NT$128.65bn/49.6% and NT$136.35bn(+/-5.15bn)/49.5%(+/-1.5%) resp. Our previous estimate of 4Q21 is in short of NT$1.05bn/2.1% resp., and 1Q22 revenue/GM is at the low limit of guidance resp.
• MediaTek will keep leading in the smartphone area, including 4G/5G for ~700mn in 2022. The 5G penetration rate will be from 35-40% in 2021 to be 50% in 2022.
• Dividend payout ratio will be 80~85%, and it will be NT$72~76 for 2021. It will be a NT$16 of the special dividend in the coming 4 years.

100% capacity utilization rate; reiterate BUY with TP of NTD74. UMC’s growth momentum may come from 5G, IoT and EV in FY22. In particular, higher shipments of PMIC, transceiver/switch and OLED driver IC and demand for more sensors and controllers in multi-lens handset may boost UMC’s sales. UMC revised up FY22 foundry growth to +20% YoY. FY22 EPS is estimated at NTD6.03. Due to UMC’s 100% capacity utilization rate and higher ASP/earnings, we reiterate BUY with TP of NTD74.

Revenue/earnings momentum may decelerate in the short run; adjust from BUY to TRADING BUY. Catalyzed by growth in core businesses, Lite-On’s overall operations have improved. The company has significantly improved its profitability despite flat revenue in FY21. However, considering the lack of revenue/earnings momentum, we adjust Lite-On from BUY to TRADING BUY with TP of NT70 (11x FY22 EPS estimate).

• We had expected 3Q results for Capcom to be unsurprising given a lack of new titles and OP of ¥6.17bn was in line with consensus at ¥6.23bn. 
• The launch of Monster Hunter Rise for PC did not go as smoothly as we hoped but the trend appears to be improving. 
• All in all FY OP looks set to slightly beat consensus and guidance for better than double digit growth is likely in our view.

• In this analysis, we review allocations in Contemporary Amperex Technology among 3 sets of active China managers.  MSCI China Funds, China A-Share Funds and Greater China Funds. 
• We find that exposure in Contemporary Amperex Technology has risen to peak levels across all 3 investor sets, making it one of the largest overweight positions in China.
• Outside of dedicated China, we also see ownership growth among Global Emerging Market and Asia Ex-Japan active strategies.

• Qingdao Ainnovation Technology Group Co Ltd (1853807D CH) raised around US$151m after pricing its IPO at HKD26.3/share, at the bottom end of its IPO price range.
• Qingdao AInnovation Technology Group is an AI solutions provider offering full-stack AI-based products and solutions.
• In this note, we will look at the trading dynamics and current valuation.

• Sirclo, an Indonesia-based ecommerce enabler, has announced that it is set to acquire Warung Pintar
• The value of the deal is undisclosed, but the process is expected to be completed within the first quarter of this year
• Sirclo said that the deal helps its plan to offer more comprehensive online and offline commerce solutions for its clients

Tanla Platforms: Tanla reported a decent quarter with a slight miss on revenue (INR 8.8bn vs. estimate of INR 9.1bn) but better-than-expected margin performance. The gross margin of enterprise business improved +244bps QoQ to 24.6%, powered by a better mix. While enterprise growth was led by the BFSI, wholesale and government verticals, higher messaging volumes from enterprises were a result of festive season and marketing campaigns. The next phase of growth in the platform business will be powered by Wisely, whose commercial launch is expected in March 2022.

• The review period for the March review of the HSCI ended on 31 December. There are a lot of new listings that should be included in the index.
• SenseTime is a high probability inclusion to the index, though it will only be added to Stock Connect in July once it completes 6 months and 20 trading days.
• Xpeng and Li Auto will be added to Stock Connect in Feb/March if they pass the velocity test. We see Li Auto as failing the test, while Xpeng is close.

• Crypto continues to drawdown due to tightening, however, the industry continues to grow with several large VC fund raises underway such as a16z’s $4.5 billion dollar fund 
• Web 3 is a hot topic and we explore how several entrepreneurial individuals have monetized their selfies for millions
• We also explore LooksRare’s potential to disrupt Opensea and their potential 2022 public listing

• The fresh break today to new trend lows on the Kospi Index forces one to identify potential supports & targets 
• The chart warns of at least a test of the January 2018 high at 2,607 which is almost 6.5% below current levels
• The more concerning target is the 200 week moving average at 2,448 – some 12% lower

• NDX break below trendline and price support at 15,300 did open Pandora’s box and was touted as a key risk driver for a global sell off into late January.
• NDX 14,300/100 low zone to kick off a recovery rise in February. We prefer the DJI near 34k and SPX near 4,350. Late January cycle low timeline in focus.
• NDX underside of broken trendline at 15,500 is the level to re take to mend the technical damage – a tall order at this stage.

• We are electing to close out our Sell Rating on Clearfield (CLFD) after an unprecedented market response to our initiation. 
• In less than 4 trading days, CLFD’s stock has declined by approximately 32.3 percent
• We see less of a reason to maintain coverage when the market has priced in for the business risks we had originally highlighted.

• Liquidity shorts can be great short candidates.  The key characteristic is that the company may not be viable, economically, given their cash flows and cash requirements. 
• Liquidity shorts have built-in catalysts, have moderate to higher betas,  and can have strong down moves if a crisis develops.  They can go bankrupt, pushing the stock price near zero.
• HashiCorp Inc (HCP), Fluence Energy (FLNC), Rivian Auto (RIVN), Domo Inc (DOMO)

• Maintain BUY rating with a new TP of Bt50 (+10% from last TP) based on 19.7xPE’22 (+2.5SD historical 5-Year PE) due to positive prospects from new cloud and cybersecurity segments
• We rerate PE target to 19.7xPE’22 from 18.1xPE’22 to factor in upside from change in market valuations. While SIS trades at 16.2xPE’22,SYNEX and COM7 trade at an average of 35.5xPE’22
• •Expect earnings to grow 28% YoY in 22E, off the backs of new high-margin and high-demand cloud and cybersecurity segments.

• Upstart is down 73% from its all-time highs after delivering a robust earnings report that saw revenue grow over 200%.
• There are 5 key factors that will likely continue to drag down the stock as the Nasdaq continues its downtrend.
• The big question for investors is to rigorously evaluate if Upstart is providing investors with excellent value right now for a company that is growing over 200% and highly profitable

• Mastek Ltd (Mastek) offers data, apps, cloud services to public & private enterprise in the UK, US, Middle East, Asia Pacific and India
• The company’s recent acquisition of Evosys has enabled Mastek to provide end-to-end solutions and improves margins from ~14% to 21%
• We now assign BUY rating to the stock (from HOLD earlier). We value Mastek at Rs 3,360 i.e. 26x P/E on FY24E EPS

• We maintain HOLD rating with a TP of Bt28.40 derived from 27.0xPE’22E, (+2S.D. ten-year average). We believe that the company’s strong expected growth in 22E is largely priced in.
• We expect 4Q21 net profit to be Bt218mn (+12%QoQ), which is the company’s all time-high. All-time high revenue of Bt10.5bn (+19%QoQ),will be driven by strong sales of new Apple products
• Positive earnings growth in 2022,driven by sales in gaming devices and equipment, which are high-margin products. Gaming equipment sales come from partnerships with major gaming-related companies like Nintendo, Sony (Playstation),Razer.

• To merge with Siltronic has reached to 95% in probability for GlobalWafers now. Our target price for GlobalWafers doesn’t change at NT$880~960 and $1,200 if it finally past.  
• Chinese government requested that GlobalWafers has to spin off its Denmark’s subsidiary 8” float zone (FZ) wafer within no more than 9 months at most.
• Currently, Siltronic is delivering a GM of 25.6~32% during 1Q~3Q in 2021, which is competitive to Sumco, Shin Etsu. However, it shall be able to improve the GM further.

• In our estimate, the 4Q21/1Q22 revenue/GM is about NT$127.6bn/47.5% and NT$136bn/47.5% respectively. 
• We forecast MediaTek to ship 4G/5G for ~355mn/220nm chipsets in 2022 respectively. 
• Besides Oppo, Vivo, Xiaomi and Honor, MediaTek is shipping for a few thousand sets of Dimensity 9000 to Samsung in 1H22. 

• From a market point of view, Intel’s risk-reward profile appears more compelling than many of its high-flying peers.
• From a business perspective, the company will likely continue to suffer in the short-term, however, strategic positioning is still strong.
• What has historically been Intel’s weak spot could prove to be its key competitive advantage over the coming years.

• The haptic technology industry is expected to grow at a CAGR of 14.5% from 2021 to 2027 according to PR Newswire.
• IMMR issues with management, investor relations management, and litigations is limiting the value of the stock.
• Immersion is putting less money into R&D, making some investors worried onto whether it will have a sustained strong future as market leader in haptic technology.

• Larsen & Toubro Infotech (LTI) offers application development, IMS, digital solution services to BFSI, retail, health, media & hi-tech verticals
• LTI has 71 Fortune-500 clients with a presence in North America & Europe
• We maintain BUY rating on the stock Target Price and Valuation: We value LTI at Rs 8050 i.e. 42x FY23E EPS

• Both the S&P 500 and the Nasdaq 100 have hit decent supports
• This has come after the rise in yields has started to slow down
• At this stage it appears at least a short term bounce may be seen. It is too soon to determine anything more than that

• We explore the notion that stablecoins existed even before crypto was invented and shows the difficulties of creating a monetary medium with zero volatility 
• We show that the supply of stablecoins has grown 27x over the past 2 years and breakdown the history of stablecoins and their modern-day use cases 
• We demonstrate a strategy to generate 20% returns on stablecoins using TerraUSD (UST CURNCY)  and Anchor Protocol

• The stock price has risen 13% since our last note, but we still believe there is an upside of 21%.
• The company is cutting employee benefits, from housing allowance to afternoon tea.
• We believe the operating loss will shrink significantly in the following two years.

• CLFD has been the beneficiary of communication service providers investing in their broadband networks to meet an increase in data traffic.
• The events of the last two years, namely the COVID-19 pandemic causing work/learn from home and Huawei and ZTE equipment replacement, were the reason for the boom CLFD has experienced.
• CLFD’s community broadband customer was incentivized to replace Huawei and ZTE equipment with reimbursement checks from the FCC.

Robust deal wins to drive growth