Information Technology Archives | Page 8 of 18 | Smartkarma

• Bukalapak (BUKA IJ) 1Q2022 results were all about execution, with significant improvements in take-rates for its Mitra business, and even more so for its marketplace segment. 
• The launch of AlloFresh and Allo Bank Indonesia will add some further depth and breadth to the platform’s product offering and help to accerlate the move towards profitabilty.
• Bukalapak (BUKA IJ) looks like an increasingly interesting way to play the Indonesian digital economy with an expanding ecosystem and increasing take-rates at the same time. 

• Growth in number of subscribers on the back of increased workforce, it may be temporary spike
• Cost pressure visible as per our expectation and the margins continue to be at lower level on Y-o-Y basis
• Buyback of shares within a year of QIP meets more than the eye

• Lasertec’s 3Q disappointed as revenue of ¥16.6bn materially undershoot consensus estimates of ¥26.6bn but given quarterly volatility in deliveries and acceptances that is understandable. 
• What is more concerning is the emerging picture of gross margin decline which the company had previously warned about. 
• Given inflated valuations these small negatives together with no guidance raise could drive a continued correction.

• Caixin reported on Wednesday that Meituan (3690 HK) has shut down community-group service (Meituan Select) in Beijing following news that the company plans to shut down operations in loss-making cities.
• Community-Group buying (CGB) became popular in China in 2020 and Meituan entered the market in 3Q2020 and continues to spend heavily on the biz.
• The market became heavily competitive in the form of price war, which attracted regulatory scrutiny and led to large players like Alibaba and JD.com opting out of the market.

• In this insight, we discuss end of the mandatory lock-up periods for 40 stocks in Korea in May 2022, among which 4 are in KOSPI and 36 are in KOSDAQ.
• These 40 stocks on average could be subject to further selling pressures in May and could underperform relative to the market. 
• Among these 40 stocks, the following stocks such as Kakao Pay, Enchem, DearU, and 4by4 could face further selling pressures in the coming weeks.

• Inline quarter, though margins continue to decline on market share loss and ramping new nodes. 
• Intel is overly optimistic about PCs rebounding in the 2H; 2021’s 15% growth is not sustainable.
• Intel maintained its full year revenue guidance and increased its EPS despite lowering 2Q’s guidance. This implies an acceleration in the back half. We find that overly optimistic

• SEA sell volumes are deteriorating into new lows with two buy tranche levels outlined to align with the RSI near 25 as the primary long trigger.
• Selling exhaustion is noted as the descending price wedge matures. Sell volumes deteriorating into new low sets up the entry.
• 102 is the key hurdle to clear with macro targets at 132 and 170. Buy probe near 70 with a higher conviction buy near 54.

• For 2Q22 guidance, the revenue declines high single digits % QoQ, and GM falls between high twenties to low-thirties.
• The current China smartphone inventory digestion won’t influence WinSemi’s expansion plan because it’s in construction phase now.
• It is due to cellular for 2Q22 decline, which is not easy to clarify whether it’s 4G, or 5G.

• Mercari’s 3Q results underwhelmed with both revenue (-4.5%) and OP (¥2.9bn loss vs. a predicted ¥1.0bn profit) missed. 
• Guidance was also weak and problems with rising fraudulent transactions in Japan and low tax reporting thresholds for sellers in the US are headwinds. 
• Nevertheless, the drastic fall in the stock price appears to have gotten far ahead of these problems and ignores the bright future of the company in our view.

• In the 2Q22 guidance, the revenue for ATM/EMS is ~NT$76.7bn/NT$61.2bn, the GM for ATM is ~27.5% and OPM for EMS is ~8.8%.
• In the first quarter, ASE Holding already surpassed the historical peak of 27% gross margins. And ASE Holding will see that trend continue.
• It’s a normal phenomenon that ASE Holding is seeing inventory level being higher than before.

• Persistent Systems Ltd (Persistent) reported strong and broad-based growth in Q4FY22 and beat our expectations on all key parameters.
• The company’s revenue stood at Rs 1,638 Cr, up 9.8% QoQ and 42.2% YoY. Its operating profits registered a growth of 14% QoQ to Rs 230 Cr and operating margins marginally expanded by 40bps QoQ to 14%
• We recommend a BUY rating on the stock and assign a 38x P/E multiple to its FY24E earnings of Rs 126.8/share to arrive at a TP of Rs 4,820/share, indicating an upside potential of 18% from CMP.

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• About 9 days I ago I wrote Renesas (6723 JP) – On Top of Peer-Beating Growth, and Valuation… Watch for Buybacks. Today with Q1 earnings, they announced a ¥200bn buyback. 
• What appears to be a quite strong Q1 in automotive in both revenues and margins, and decent incremental margins, sees a stronger Q2 forecast (but less good incremental margins).
• The Street is well behind guidance, and a buyback at the high end of potential guidance and coming earlier than expected is all to the good. 

• Renesas’ 1Q numbers blew away guidance and consensus as revenue beat by 3.4% and adjusted OP beat by 16%. 
• Revenue growth was strong for both Auto and Industrial with Industrial margins also improving noticeably vs. last Q. 
• Renesas also announced a rather large buyback which is effectively a repurchase of the INCJ’s stake.

• Another quarter another Keyence beat as revenue beat by 5.3% and OP beat by a more modest 4.7% due to high SG&A costs. 
• Sell side analysts on the conference call remain confused by the outperformance vs. peers because they fail to realise that Keyence gonna Keyence. 
• Despite this strength we remain cautious as Keyence is now a truly exceptional company that is being priced like a magical one.

• Twitter suddenly decided to accept Elon Musk’s hostile $54.20 bid (no one else was even interested).
• Now they have to sell billions in pricey & yet likely still underpriced bonds vs Twitter’s already weak ops & truly ugly pro forma credit quality & dicey prospects.
• Does that make Elon a winner or a bagholder? And will he stay or will he go? We’re going to find out.

• Church donor management tech play Pushpay Holdings (PPH NZ) said it “recently received unsolicited, non-binding and conditional expressions of interest or approaches from third parties“.
• No price was mentioned. Shares promptly gained 24% on the news. 
• Separately, Pushpay reaffirmed its EBITDA guidance for FY22. Those results will be announced on the 11 May.

• Advantest results were relatively uneventful with a marginal beat at the top line and a marginal miss at the OP level. 
• Guidance was decent however with both revenue and OP above consensus and some lowballing on margins suggesting some upside to guidance. 
• The company also said that it would no longer disclose orders because changing lead times made them less comparable because of course they do…

• The 1Q22 revenue beat the prior guidance, GM was in-line the guidance. The guidance is within our expectation in 2Q22.  
• MediaTek believes they shall be on the right track to grow revenue 20% and the GM 48-50%, and MediaTek has a 3-year target to grow mid-teens percentage from 2022.
• For shareholders, the board had approved NTD$37 for cash dividend in this year.

• UMC delivered a shining GM and outlook. The GM outlook is 45% in 2Q22, which beat our forecast.
• UMC believes 22/28 nanometer will be a long-lasting node driven by applications, such as Wi-Fi 6, 6E, networking and OLED driver IC.
• The overall business covered by LTA is close to 30%-40%.

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• Razer Inc (1337 HK)‘s Scheme was comfortably voted through by shareholders.  
• The overarching risk to the transaction, that it may fail the headcount test, largely turned out to be a storm in a tea cup. 
• Tomorrow is the last day of trading with payment under the Scheme on or before the 20 May. Index sell flows come at the close. 

• Razer Inc (1337 HK)’s scheme was approved at today’s court meeting. The value test passed with 94.74% of the total disinterested shareholders voting in favour of the scheme.
• Despite our reservations about the headcount test, the scheme comfortably passed the headcount test with 465 for and just 16 against the scheme. 
• At the last close and for the 20 May payment date, the gross and annualised spread to the offer is 3.7% and 56.1%, respectively.

• Flexible printed board player AKM Industrial (1639 HK) has announced the pre-conditions attached to the Scheme have now been fulfilled.
• The despatch of the Scheme Document has been delayed until the 10 June. 
• Trading at a gross/annualised spread of 2.5/9.6%, including the FY21 final dividend, and payment in early August.

• This insight focuses on private unicorns backed by Sea Ltd (SE US) , Walmart (WMT US) , Softbank Group (9984 JP) & Prosus NV (PROSY US) 
• Growth would require new and even larger investments across the Internet Sector.  
• Reliance and Tata’s retail plans are likely to challenge even giants like Amazon and Flipkart.

• Koei Tecmo’s earnings yesterday were on the strong side with 4Q OP beating by 28.7% despite a 1.79% miss at the top line. 
• Thus, the typical pattern of heavy expensing of development costs in 4Q was missing and combined with some one offs could make hurdles for next year high. 
• With the stock struggling to gain positive momentum and few clear positive catalysts on the horizon we remain negative.

• The S&P BSE family of indices represents the performance of stocks listed on the Bombay Stock Exchange (BSE) across various sizes, themes, industries, and strategies.
• This series will mainly focus on the following indices of the S&P BSE family: S&P BSE 500, S&P BSE 200, S&P BSE 100, and S&P BSE SENSEX.
• In this insight, we take a look at the leading candidates who could become Adds/Deletes during the June 2022 Semi-annual Rebalance.

• According to Bloomberg, Bain Capital-backed Chindata Group (CD US) is being scoped out by industry players.
• GDS Holdings (ADR) (GDS US) is rumoured to be interested in merging with Chindata. PE outfit PAG and EQT AB (EQT SS)-backed EdgeConneX are also, reportedly, in the mix.
• Chindata’s shares popped but are still 64% below its IPO price. This rumour follows data center provider 21Vianet (VNET US)‘s recent proposal from Hina Group and Shanghai’s Industrial Bank. 

• Omron’s 4Q results continued the trend of weakness in the FA sector and guidance was tepid unlike Yaskawa. 
• In particular, the Healthcare Segment’s margins appear to be normalising and poses a downside risk along with typical cyclicality. 
• At 14x EV/OP on guidance vs. a 10x multiple that we would consider fair, there is downside risk here.

• Chindata Group (CD US) is a leading carrier-neutral hyperscale data center solution provider in Asia Pacific emerging markets with a focus on China, India and Southeast Asia.
• Bloomberg and several other news media outlets reported that the company has attracted takeover interest from other firms in the industry including rival GDS and PAG.
• CD’s shares are down more than 65% since its IPO primarily driven by the ongoing regulatory crackdown on tech firms in China alongside US-China trade tensions.

• Giverny Capital Asset Management, LLC is a partnership between GivernyCapital of Montreal and David Poppe, the former president and chief executive officer of Ruane, Cunniff & Goldfarb, LLC.
• The best companies tend to weather crises better than average ones, Poppe says.

• Razer Inc (1337 HK)‘s Court Meeting will be held tomorrow.
• The highly anticipated abolishment of the headcount test will not become law ahead of the shareholder vote.
• Trading at a gross spread of 8%, unchanged since the record date. That’s positive. Plus this Offer has proxy advisor support.

• A Bloomberg article claimed that Chindata Group (CD US) is attracting takeover interest from GDS Holdings (ADR) (GDS US), PAG and EdgeConneX. Shares rose 9.8% to close at $4.81.
• Potential privatisation will require the blessing of Bain Capital, the largest shareholder. Chindata’s track record of beating guidance, modest leverage and the beaten-down rating make it a target. 
• A forward EV/EBITDA multiple of 8.9x, in line with 21Vianet Group (VNET US)’s proposed acquisition multiple, would imply $6.85 per ADS. 

• Valorant’s Masters 1 Tournament concluded today in Iceland with North America’s Optic Gaming defeating Brazil’s Loud, leaving Japan’s Zeta Division in third place. 
• These are three key regions for viewership and Japan’s surprising performance bodes well for the esports scene in the country. 
• Gameplay for Valorant Mobile has also leaked and early indications are that Krafton could be cannibalised here.

• AKM Industrial (1639 HK)’s privatisation offer from Alpha Luck and AKM Meadville of HK$1.8345 consists of a base offer (HK$1.82) and a final dividend (HK1.45 cent).
• The pre-condition was fulfilled on 22 April. The latest date for the despatch of the scheme document has been extended to 10 June. 
• Shareholders with blocking stakes have previously provided irrevocables. At last close and for an early-August effective date, the gross and annualised spread to the offer is 3.1% and 10.7%, respectively.

• Tencent (700 HK) will announce its first quarter 2021 results on 18th May 2022.
• Since 3Q2021, Tencent’s earnings have started to decelerate, and the previous quarter marked the slowest ever revenue growth for the company since 2004.
• We expect Tencent’s earnings weakness to continue well into 1H2022E due to slowdown in online games and online advertising businesses.  

• Revenue fell 0.4% QoQ in USD CC terms in 4QFY22, but was above our estimate of -1.1% QoQ USD CC.
• The beat was led by both Services (+1.6% QoQ USD CC) and DLM (-9.3% QoQ USD).
• Growth in Services was driven by Portfolio (10% QoQ), Aerospace (3.9%), and Communications (3.5%), while growth in Rail Transportation (-9.5%) was weak.

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• While we have underweighted the IT sector (Report) HCL Technologies (HCLT) is a preferred pick due to (1) Significant narrowing of growth differential in FY23 despite disappointment on revenue guidance – vis-à-vis Indian Tier-1 growth leader Infosys.
• We also see modest acceleration in FY23 while most Tier-1 peers will see deceleration
• Our view that underlying growth in Products and Platforms (P&P) business is positive…(continued).

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• Crypto complex rose mid-week but ended the week down after Powell confirmed market’s expectation of 50bps hike in May 
• Uncorrelated to the rest of market, ApeCoin (APE CURNCY)  continues to grind higher in anticipation of Yugalab’s Land mint event on April 30th, possibly the largest NFT mint in history 
• Coinbase (COIN US) launched a beta version of its NFT marketplace as direct competition to the $13bn dollar Opensea; and much more

• SSG.com is getting ready for an IPO in 2H 2022/1H 2023. Local media have mentioned that SSG.com is targeting a valuation of 10 trillion won for the company.
• We believe SSG.com would need to cut the valuation by at least 50% (5 trillion won) in order to complete its IPO. 
• We believe valuation levels of 11st would need to come down significantly in the 2 trillion won to 3 trillion won range in order for an IPO to be completed. 

• ASE Holding revenue was NTD$144.4bn in 1Q22, which was 20.9% YoY and -16.5% QoQ. We expect the GM is 19.5% in 1Q22.
• ASE Holding could target at NTD$148.1bn/20.5% GM in 2Q22. We expect the gross margin of IC ATM and EMS portions are around 26.8%/9.1% respectively.
• We think it should be picking up since 2Q22 because of the seasonality, and it’s likely to peak out until 4Q22.

• The bullish breakout on the VIX Index looks similar to January
• Further gains are expected, probably this week and as we enter May
• As a consequence expect continued losses on the S&P 500

• The amended Cayman Islands Act is yet to become law which increases the odds that the headcount test remains for Razer Inc (1337 HK)‘s court meeting on 26 April. 
• Since the despatch of the scheme document, the gross spread has narrowed to 7.6% (last close). Current deal probability implies an 80% chance of success.
• The rising deal probability negatively skews the risk/reward profile. We are hesitant to be long this trade into a scheme meeting that is too close to call.

• The Strategy underperformed during a pronounced rotation out of higher-growth companies due to investor de-risking and a less accommodative macro backdrop.
• We used opportunities created by heightened volatility to establish seven new positions while exiting eight other names to increase conviction in stocks with more attractive risk/reward profiles.

• ClearBridge is a leading global asset manager committed to active management.
• The Strategy’s overweight in growth and smaller cap stocks caused it to endure the worst of the selling pressure facing these areas.

• A sharp spike in bond yields pressured growth stocks and weighed on Strategy performance against its core benchmark, where leadership was decidedly one-sided in favor of value.
• Nevertheless, we remain positive on areas like the IT sector and have largely maintained holdings in our highest-conviction ideas.

• ClearBridge is a leading global asset manager committed to active management.
• Research-based stock selection guides our investment approach, with our strategies reflecting the highest-conviction ideas of our portfolio managers.
• Recent underperformance was driven by stock selection, where earnings shortfalls impacted several names in communication services and technology.

• Revenue of HK$5.27 billion (US$674.8 million), +21.5% YoY and -15.1% QoQ, was at the high end of revenue guidance issued in 1Q22.
• Revenue guidance was US$670 million to US$740 million, which was +5.8% YoY and +4.5% QoQ at mid-point in Q2 2022.
• Usually, the 1st quarter is the weakest of the year. The booking magnitude might be showing how is the industry customers’ confidence now. 

• Cyient reported robust Q4FY22 results with revenue for the quarter at Rs 1,181 Cr, declined by 0.2 % QoQ and improved by 8.1% YoY. Operating Margins improved by 60bps QoQ to 14.5%.
• Services operating margins de-grew by 20bps QoQ to 15.4% while the DLM margins stood at 9.8% the quarter before being aided by strong execution
• We recommend a BUY on the stock and assign a 17x P/E multiple to the company’s FY24E earnings of Rs 60.0/share to arrive at A TP of Rs 1,000/share, implying an upside of 20% from CMP.

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• HCL Technologies Ltd (HCL Tech) Q4FY22 performance stood in line with our expectations.
• The company reported revenues of Rs 22,597 Cr, up 1.1% QoQ and 15.1% YoY.
• We recommend a BUY rating on the stock and assign a 20x P/E multiple to its FY24E earnings of Rs 67.4/share to arrive at a TP of Rs 1,345/share, indicating an upside of 22% from the CMP.

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• ClearBridge is a leading global asset manager committed to active management.
• The market now has a clear call to action to solve the dual challenges of energy security and energy transition, requiring serious capital spending and innovation.
• We added to defensive sectors including utilities and health care, looking for true diversification with low price correlations and lower price volatility.

• Zhihu Technology (ZH US) raised around US$106m via a dual primary listing in Hong Kong. 
• Unlike all the prior dual primary/secondary listings which have been done via offering either only primary or a mix of primary+secondary shares, Zhihu’s offering will consist of only secondary shares.
• In this note, we’ll talk about the demand and trading dynamics.

• Skyrocketing material costs shook the stock of Contemporary Amperex Technology Co. Ltd. (CATL) as investors wiped billions of dollars off the value of the world’s largest electric-vehicle battery manufacturer.
• Word circulated in the market that CATL is set to post net profit of less than 5 billion yuan for the first quarter, a sharp decline from the previous quarter.
• The company hasn’t issued detailed financials for the fourth quarter and all of 2021. An estimate issued in January put annual net profit between 14 billion yuan and 16.5 billion yuan.

• The strong dollar has boosted Softbank’s predominantly dollar-linked asset value by 9% in yen terms (although reported net debt will also increase)
• Also relevant is a decrease in the dollar cost of its ¥1,000bn share repurchase which was $8.8bn when announced but costs less than $8bn at the current exchange rate.
• This has kept the share price up YTD and QTD despite weakness in the investment portfolio but tech weakness probably has more legs than dollar appreciation

• Mediatek revenue was NTD$142.7bn in 1Q22, which was 32.1% YoY and 10.9% QoQ. It was higher than the prior high-end guidance of $NTD141.5bn.
• The 2nd quarter outlook could be slight growth of NTD$148.9bn/49.1% GM, which could be not much growth expected.
• The expectation of the 5G deployment could be a bit slower because of COVID-19 impact and slow down in China handset shipment. 

• Several news media outlets report that ByteDance has launched a new music streaming service in China called Qishui Yinyue.
• Tencent Music (TME US) earnings have come under pressure with ending of exclusive music streaming licensing deals and increased regulatory pressure on its social entertainment biz.
• We expect TME’s 1Q2022E earnings to decline further with increased competition and drop in social entertainment.

• LTI reported a growth of 3.6% QoQ CC on a high base, below our estimate of 4.2%.
• Growth was broad-based across verticals and service lines.
• EBIT margin moderated by 60bp QoQ to 17.3% in 4QFY22 (inline) due to lower working days and revenue mix

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.