Information Technology Archives | Page 7 of 18 | Smartkarma

• Nintendo has announced in-line-ish results for March 2022, and quite disappointing forecasts for March 2023. Mio Kato called it on 30 March as a sell. Excellent timing. 
• Nintendo has a buyback tomorrow and if you don’t like the guidance, you should DEFINITELY read on below.
• But Nintendo also announced something truly extraordinary – a stock split. Everyone pooh-poohs the impact of a stock split but… in this case it is probably not nothing.

• The Supreme Court of New South Wales today approved the convening of a Scheme Meeting for Link Administration Holdings (LNK AU) on the 13 July.  
• The Explanatory Booklet has been registered with ASIC. The Independent Expert (Deloitte) has concluded that the A$5.50/share Scheme Consideration is fair and reasonable. 
• Separately, the Offeror, Canada’s Dye & Durham, has seen its shares decline 57% since the release of its 2Q22 results.

• Nintendo results were in-line with both revenue and OP within 1% of consensus. 
• Guidance was extremely weak missing consensus by 5.5% at the revenue line and 20.5% at the OP line. 
• Nintendo gonna Nintendo so this is nothing to panic about but it isn’t positive either… though the stock split is.

• The Link Administration Holdings (LNK AU) scheme meeting is scheduled for 13 July. The independent expert has concluded that the Dye & Durham (DND) offer is fair and reasonable.
• The offer faces significant risks which are ACCC review (findings delayed from the 26 May release date), a contract renewal potentially triggering the MAC clause and an ongoing FCA investigation.
• At the last close, the gross spread to the base offer is 10.7%. We would be buyers up to A$5.20 per share (implies 75% deal probability).

• The firm was founded in 1995 by Daniel S.
• Loeb, who serves as Chief Executive Officer.
• During the First Quarter, Third Point returned -11.5% in the flagship Offshore Fund.
• The path to wringing out the excesses in the financial system will be bumpy and create clear winners and losers.

• For the first quarter of 2022, Aristotle Atlantic’s Large Cap Growth Composite posted a total return of -9.61% gross of fees.
• We have also entered a period of increased geopolitical risks that will add to market volatility, according to Aristotle Atlantic’s Large Cap growth Composite.

• Despite not dealing with celestial objects, the company itself is a grouping of vertical market software companies, of which are obtained based upon a set of rigid principles and quantitative standards that I will touch upon in later sections of this report.
• In addition, I would argue that much like constellations (in the astronomical sense of the word) being associated with mythical figures, CSI is directly tied to one of the most elusive, mysterious and fascinating business personalities of our era, Mark Leonard, someone you can see if you look close enough in the night’s sky.  
• Out of all of the publicly traded companies I have written about thus far, CSI stands out amongst the pack.

• For the first quarter of 2022, Aristotle Atlantic’s Focus Growth Composite posted a total return of -9.30% gross of fees.
• In the near term, a recession seems unlikely with key economic indicators like the ISM Manufacturing Index pointing to an expanding economy.
• The ISM manufacturing Index points to an growing economy.

• Apple and Microsoft are pressing on pivotal supports that would weigh on the US equity cycle after the April 26 red flag for defensives and resource stocks to sell off.
• Mounting to break AAPL and MSFT key supports at 150 and 270 that would inflection the SPX cycle further given the SPX is flirting with a key break below 4,100/4,030.
• AAPL and MSFT support breaks target AAPL 120 and MSFT 220.

• When we reviewed Appier’s 2021 results we rambled on about the US for about half of our note discussing explosive growth potential. 
• We said that while Appier touted a >50% QoQ growth rate in the US we suspected it was actually closer to 100%. 
• In 1Q it accelerated to >180% QoQ growth prompting the sell side to go all surprised Pikachu.

• Meta Platforms surprised investors in Q1 but not because the quarter was outstanding. Rather, it wasn’t as bad as some had assumed.
• In an unusual turn of events, Zuckerberg’s earnings call appearance resulted in whispering sweet nothings into investors’ ears
• However great that might be, the quarter provided no conclusive update on the loss of signal from Apple’s iOS updates, with management offering on-platform messaging/commerce as a potential sidestep

• Delhivery (1058656D IN) IPO will run from 11-13th May. The company plans to raise INR52.35bn (US$680m) through the issuance of a mix of new shares and OFS by existing shareholders.
• At the indicative IPO price range of INR462-487 per share, Delhivery will have a market capitalisation of INR334.7-352.8bn and a post-money EV of INR294.8-312.9bn.
• Delhivery plans to use the IPO proceeds for funding organic growth initiatives such as building scale and expanding network infrastructure as well as for funding inorganic growth.

• We have been Bearish on Coupang since 12 May 2021. Now we are turning Positive since we believe the valuations have become a lot more attractive. 
• We highlight four major factors that could result in higher profit margins for Coupang in 2022 including competitors exiting early dawn service, lower COVID and EATS related costs. 
• Our base case valuation of Coupang is implied market cap of $24.9 billion and target price of $14.1 per share, representing 32% upside from current levels.

• For the first quarter of 2022, Aristotle Capital’s Global Equity Composite posted a total U.S.
• dollar return of -9.19% gross of fees (-9.28% net of fees) The company is an independent/employee-owned investment management organization that specializes in equity and fixed income portfolio management.

• On 6th May 2022, Larsen & Toubro (LT IN)‘s publicly-listed subsidiaries Mindtree Ltd (MTCL IN) and Larsen & Toubro Infotech (LTI IN) announced plans to merge.
• I discussed this situation previously in Mindtree-LTI: A Potential US$20bn+ Indian Tech Merger; Mindtree Could Outperform LTI when the ratio was 0.66, expecting a scrip ratio north of 0.70.  
• Below is a closer look at the details of the transaction and the outlook for the combined entity.

• Revenue growth ex-SPAC decelerated to 19% this quarter, 11% below consensus.
• 1Q22 20% operating margins vs. consensus 27% margins as the company invests to reaccelerate growth in 2H from rising government contracts due to war.
• Alex Karp warns that nuclear war in Ukraine is being dramatically underestimated.

• Canon Inc (7751 JP) on Monday announced a share buyback programme.
• It isn’t very big. But it bears consideration because of other things going on. 
• Shareholder structure is of much more importance than many investors appreciate. Here even more so.

• Hon Hai’s revenue was NT$1,408bn in 1Q22. We expect the OPM and EPS would be ~2.2% and ~NT$2.18 in 1Q22.
• It’s a gradually increase for end-product shipment in 2021, but we think it might be followed by a slower season in 2Q22.
• Hon Hai’s target is to address the profit in 2022. For 2022, we believe it could be the lowest revenue in 2Q22.

• The Larsen & Toubro Infotech (LTI IN) and Mindtree Ltd (MTCL IN) merger will create a company with revenue of US$3.5bn and a market cap of US$18bn.
• The merger ratio is 73 shares of Larsen & Toubro Infotech for 100 shares of Mindtree. The merger is expected to complete in 9-12 months. 
• There are likely to be some inflows from MSCI and FTSE trackers but the big kicker will be inclusion in the NIFTY Index – but a (smallish) rally is needed.

• Tokyo Electron reports FY3/22 results on 12 May. We expect the company to meet guidance and analyst expectations  
• But the outlook may disappoint. Management may guide FY3/23 more conservatively than analysts who are looking for operating profit to grow 20% to ¥700 bn 
• Despite favorable industry conditions and strong outlook for WFE, we think that the stock could continue to de-rate

• Crypto complex down double digits over the past week as yields climb beyond 3% and major asset classes all trade lower with heightened correlation. NFTs also down significantly. 
• TerraUSD (UST CURNCY) has depegged from USD1 and is again potentially at risk for the dreaded death spiral coupled with Terra (LUNA CURNCY) 
• As UST and LUNA have a combined market cap of around $40 billion, it could present systematic risk implications for crypto 

• The Nasdaq 100 is approaching some supports around 12,200 which may hold on first attempt
• However in the bigger picture they do not look particularly strong
• Instead there is a danger that overall we continue to trend down towards the 11k area

• The review cutoff for the FTSE All-World/All-Cap June QIR is 11 May. The changes to the MSCI indices for the May SAIR will be announced on 13 May Asia time.
• The review period for the KOSPI2 INDEX, KOSDAQ 150 Index, Shanghai Shenzhen CSI 300 Index, STAR50 INDEX and the SENSEX INDEX ended last week and there are changes.
• ETF inflows were larger than outflows for nearly all Asian markets. The largest inflows were in the Hang Seng H Share Index ETF (2828) and Vanguard Aust Shares Etf (VAS).

• JCET reported revenue/GM RMB$8,138mn/10.7% in 1Q22, which grew 21.2% YoY and 0.5% QoQ.
• We expect that its growth would continue and likely reach to revenue/GM for about RMB$8,234.5mn/10.8% in 2Q22.
• Although the mainland China insists in the Zero Policy against COVID-19, the GDP growth was targeting at ~5.5% in 2022. 

• Delhivery (1058656D IN) is the largest and fastest-growing 3PL express parcel delivery player in India. It will launch its Rs52.4 billion ($0.7 billion) IPO on 11 May.
• In Delhivery IPO: Yet to Convincingly Deliver, we noted that the negatives outweigh the positives.  
• In this note, we look at the valuation metrics. We think that Delhivery is at best fairly valued at the IPO price range. 

• Delhivery (1058656D IN) is looking at raising INR 52,350m (US$685m) in its IPO by selling up to 113.3m shares at a range of INR 462-487/share.
• At the mid point of the IPO range, Delhivery (1058656D IN) will be valued at INR 344.8bn (US$4.5bn) while the free float market cap will be much lower.
• Delhivery (1058656D IN) could get entry to the FTSE All-World Index at the December QIR, while inclusion in the MSCI India Index could take place at the May 2023 SAIR.

• AEM reported strong 1Q22 results (+226% YoY) and raised its FY22 revenue guidance to 700-750M SGD. AEM management continues to believe they are in a multi-year ramp-up. 
• While the US tech sector is imploding left and right AEM is a very specific story linked to Intel’s CAPEX binge. Expect momentum to remain in FY22 and into FY23.
• Fair Value of 8 SGD remains unchanged (based on 20x 0.40 FY22 EPS), or 62% upside from the current 4.92 SGD share price.

• Delhivery is now looking to raise around US$700m in its upcoming India IPO, the company is backed by a host of financial investors, the largest being Softbank
• Delhivery is an online logistics service provider which covers express parcel delivery, heavy goods delivery, part truckload (PTL) freight, truckload (TL) freight, supply chain solutions, cross border solutions etc.
• We have covered various aspects of the deal in our earlier notes. In this note, we talk about valuation. 

• Hoya’s 4Q beat slightly with revenue beating consensus by 2.2% and PBT beating by 7.0%. 
• Those beats were better than peers such as Advantest and Lasertec and qualitative guidance suggests that YoY growth is likely driven by the Lifecare segment in particular. 
• That contrasts with our negative outlook for peer momentum and we expect Hoya’s recent underperformance to reverse in short order.

• Elon Musk got 19 friendly investors to pledge $7.1 billion toward his buyout of Twitter. 
• He also persuaded his bankers to slash his margin loan—as I projected…
• In exchange for increasing his equity commitment. So still $20+ billion to go.

• Delhivery is now looking to raise around US$700m in its upcoming India IPO, the company is backed by a host of financial investors, the largest being Softbank.
• Delhivery is an online logistics service provider which covers express parcel delivery, heavy goods delivery, part truckload (PTL) freight, truckload (TL) freight, supply chain solutions, cross border solutions etc.
• We have covered various aspects of the deal in our earlier notes. In this note, we will undertake a peer comparison. 

• Keep Inc (KEEP HK) is looking to raise around US$500m in its upcoming Hong Kong IPO.
• Keep is an online fitness platform, offering online fitness content, smart fitness devices and fitness products. 
• The firm aims to develop a closed-loop system where its offerings are complementary, thus servicing an individual’s entire fitness life cycle.

• DAX is a German blue-chip index that tracks the 40 largest companies listed on the Regulated Market of the Frankfurt Stock Exchange. 
• The DAX Index is reviewed on a quarterly basis in March, June, September, and December. 
• In this insight, we take a look at the potential constituency changes for the June 2022 review. This is a follow-up insight to DAX Index: Quiddity Leaderboard for June 2022 

• Delhivery (1058656D IN) is a fully integrated logistics player in India. The company’s application for a listing has been approved by the regulators.
• The IPO will be open from 11-13th May and the company has downsized the IPO from INR7,460 crore to INR5,235 crores, with existing shareholders offloading shares worth of INR1,235 crores.
• This insight focuses on new data points from the company’s Red Herring Document (RHD).

• Vanguard’s revenue is NTD$13.49bn, which is falling at the high-end of guidance NTD$13.2~13.6 in 1Q22. 
• Vanguard is likely to further raise price in 2Q22, and we expect revenue/GM could be NT$14.67bn/49.2% in 2Q22.
• Further price increase could hold in 2H22 because 1) the smartphone growth expectation is reducing in 2Q22, and 2) the US Federal Reserve increased interest rate to control the inflation.

• ATEN continued to experience double-digit growth in the first quarter by reporting better than expected results. 
• The security first approach ATEN has taken to its sales efforts started to show its advantages last year and has continued in 2022. 
• The momentum from the first quarter is resulting in ATEN affirming revenue growth outlook towards the high end of the 10 percent to 12 percent range provided earlier 

• India’s quick commerce market is estimated to grow 15x by 2025 to hit a market size of nearly US$5.5 billion – large enough to propel prominent investors’ interest and gain the early-mover advantage.
• One of the companies at the helm of this nascent yet flourishing industry is Zepto, a startup launched by two Stanford University dropouts, Aadit Palicha and Kaivalya Vohra.
• The Y Combinator-backed startup promises 10-minute grocery deliveries, outpacing the delivery speeds of several ecommerce companies

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• Microstrategy Inc Cl A (MSTR US) reported a net loss of $155.6mn in the fourth quarter, compared to the net loss of $124.3mn in the 4Q21. 
• MSTR took a non-cash digital asset impairment charge of $170.1mn in the first quarter, up from $146.6mn in the 4Q21. 
• A bet on MSTR is a bet on bitcoin. Yet MSTR is down 37% YTD, compared to ~20% for bitcoin. 

• In this insight, we provide an updated SoTP valuation analysis of LG Corp (003550 KS) and discuss some of the key upcoming catalysts including the IPO of LG CNS.
• Our base case valuation analysis of LG Corp suggests an implied price of 107,664 won per share, representing 45.5% upside from current levels.
• The IPO of LG CNS is likely to be a positive catalyst in the next 6-12 months for LG Corp. 

• Delhivery is now looking to raise around US$700m in its upcoming India IPO, the company is backed by a host of financial investors, the largest being Softbank.
• Delhivery is an online logistics service provider which covers express parcel delivery, heavy goods delivery, part truckload (PTL) freight, truckload (TL) freight, supply chain solutions, cross border solutions etc.
• In this note, we talk about the updates from its RHP.

• Delhivery is the largest and fastest-growing 3PL express parcel delivery player in India. It has cut its IPO raise from Rs74.6 billion ($1 billion) to Rs52.4 billion ($0.7 billion).
• In Delhivery IPO Initiation: Can It Deliver?, we noted that the fundamentals are mixed as it has been unable to leverage strong growth to deliver profits or cash generation.  
• In this note, we look at the RHP which discloses 9MFY22 results. We continue to believe the negatives outweigh the positives. We are inclined to give the IPO a pass.

• We expect the maximum permitted 30 changes at a single review to take place at the June rebalance. Most changes are high probability.
• We estimate a one-way turnover of 4.25% at the rebalance leading to a one-way trade of CNY 10.677bn.
• Industrials, Information Technology and Materials sectors are expected to have the most net inclusions, while Health Care and Financials are expected to have the most net deletions.

• Samsung Electronics (005930 KS)’s underperformance to SK Hynix (000660 KS) just part of the cycle or company specific?
• Does the supply constraint issue help or hurt Samsung?  Who is better off? 
• Key points to focus on to see where Samsung is vs. their blueprint of technology roadmap

• LG CNS is getting ready to complete its IPO in 2023. LG CNS is one of the largest system integration (SI) companies in Korea. 
• LG Corp owns 49.95% stake in LG CNS. Local media mentioned the LG CNS value could reach about 4 trillion won to 5 trillion won after it completes its IPO. 
• If LG CNS is valued at 5 trillion won, a 50% stake would be valued at 2.5 trillion won which is more than 12x book value on its balance sheet.

• KPIT Tech reported strong Q4FY22 revenue growth (5%+ QoQ in constant currency [CC] terms). It also reported margin improvement, despite supply-side headwinds; with EBITDA margin at 18.6% vs 18.5% QoQ.
• FY23 guidance came in optimistic with revenue growth expected to be in 18-21% range in CC terms and EBITDA margin projected to remain stable in the 18-19% range.
• Demand environment continues to be robust with high visibility for growth. Q4FY22 total deal win was healthy at USD 200mm; including a large deal of Euro 70mm value.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

• SenseTime Group (20 HK) currently has a float of 1.4%. That will increase to 46% at the end of June as pre-IPO and cornerstone investor lock-ups end.
• The Hang Seng Tech Index FAF increase and potential inclusion in the Hang Seng China Enterprises Index will require passive trackers to buy 700m shares early September.
• Economic stimulus in China, outlook for China tech, lock-up expiry, inclusion in Southbound Connect and flows from passive trackers will drive the stock for few months and provide trading opportunities.

• Square Enix announced the of sale Eidos Interactive, Crystal Dynamics, Square Enix Montreal and associated IPs to Embracer for $300m. 
• We had been puzzling over Square Enix’s strangely low guidance despite excellent momentum in its MMO business for some time. 
• Considering the underperformance in HD Games profitability and this sale we think we can now put two and two together.

• Novatek’s revenue was NT$36.512bn in 1Q22, which was 38.5% YoY and 62.6% QoQ. It was 50.73%/36.73%/30.5% GM/OPM/NM in 1Q22, which was higher than our prior expectation of 43.6%/27.3%/22.3% in GM/OPM/NM.   
• In our views, we revise up to be revenue/GM as NT$38.7bn/50.98% in 2Q20.
• As the inflation, 5G, Russia-Ukraine war did change the landscape, the outlook seems not that so much worse in 2022.

• AXTI continues to experience an increase in demand for substrates with indium phosphide (InP) and gallium arsenide (GaAs) growing in the first quarter
• AXTI has shifted away from the seasonality it would find itself since making the move to multiple new facilities two years ago. Customers have continued to increase their spending 
• AXTI reported first quarter revenue of $39.7 million compared to $37.7 million reported in the fourth quarter. We had been forecasting revenue of $39.6 million

• Hitachi Ltd (6501 JP) results were salutary but noisy and the year to March 2023 is forecast similar (salutary but noisy). Service integration and growth to external customers is key.
• Forecast growth in main businesses ex- to-be-sold listed subs is decent, but could be better. 
• A SEMI-Bigly buyback will help cushion any selling, but it has recently outrun Siemens on a like-for-like basis.

• Promised operating leverage is pushed out until likely 3Q22, but only higher employee RSUs is a permanent inflationary impact.
• Overcapacity is almost certainly transitory, as long as the retail business grows, this will be soaked up in a quarter or two.
• AWS backlog is booming again. Amazon’s current valuation = 12x forward AWS sales.

• The weekly & monthly close on NDX gives a notable sell signal
• Losses over the medium term towards 11k are expected to be seen
• The Stocks/Bonds ratio also indicates a turn in trend in favour of Bonds here

• We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore and the US (Chinese ADRs only).
• This week, the highest gross spreads are Dongzheng Automotive Finance (2718 HK), Yashili International Holdings (1230 HK), 21Vianet Group (VNET US), Sezzle Inc (SZL AU), Link Administration Holdings (LNK AU). 
• The lowest gross spreads are Beijing Enterprises Urban Resources (3718 HK), Virtus Health (VRT AU), 51 Job Inc Adr (JOBS US), China Logistics Property Holdings (1589 HK), Uniti Group.