Information Technology Archives | Page 9 of 18 | Smartkarma

• ApeCoin (APE CURNCY) the $4.5bn market cap token is up over 30% this week while the market continues to trade sideways 
• The main upcoming catalyst is the Yugalabs metaverse land mint event that is expected to be on April 23rd, the 1 year anniversary of Yugalabs. 
• Yugalabs is the team behind Bored Ape Yacht Club, and is at the forefront of NFT development. So the market is eagerly awaiting the land mint

• The stock has been hit by rising inflation and interest rates. Now is the time to buy
• Keyence is well placed to weather the storm given it has pricing power, high margins, and low capital intensity
• The P/B valuation of 6x is now back to a normalised range and the stock trades at a discount to global peers. 

• Superapp GoTo (GOTO IJ) made its public debut on the Indonesian Stock Exchange on 11th April. The company set the final IPO price at IDR338 per share.  
• GoTo’s shares surged nearly 23% to IDR416 a piece on the open, boosting the company’s market cap to more than IDR497trn.
• GoTo’s share price has continued to slide and our SOTP valuation suggests that there is further downside.

• Tencent short call at 390-400 is a hold but needs to break below the 351 low for bear traction toward our downside targets at 333 and 320 (bull zone).
• The current flat/trapped range shows resistance at 382 and pivot support at 351/350. Below 350 would open the way lower.
• Re test of the low zone is a buying opportunity for a rally to the 320-30 macro barrier. HK tech index sub 4k buy zone is our long counter balance.

We view Meituan as “Low Risk” on the LARA scale, given the company’s: [1] leading market positions in China’s food delivery as well as the in-store, hotel & travel accommodation industries; [2] increasing market share and scale, which should drive operating leverage; and [3] robust balance sheet, with net cash and a strong liquidity position. Meituan benefits from regulations that restrict aggressive pricing to gain market share. In addition, the company has fast-growing revenue streams across its business segments. However, the credit profile is weighed down by: [1] regulatory headwinds in the food delivery business; and [2] the ongoing losses and cash burn from the company’s community group-buying business.

Our Credit Bias is “Stable”, given the robust business risk profile and strong balance sheet.

• This channel insight focuses on private unicorns backed by Blackrock Inc (BLK US), Tencent (700 HK), Alibaba Group (9988 HK).
• There are indications of organic growth slowing down. Cash burn is probably the only possible way to cross the high operating performance seen during COVID.  
• Investor pressure is mounting, leading to mass hiring or firing in the Industry. 

• MTCL reported a revenue of USD384m (+5.2% QoQ CC) in 4QFY22.
• Reported revenue grew 4.8% (inline), driven by broad-based growth across verticals and regions.
• Deal TCV rose 9% QoQ to USD390m in 4QFY22.

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• Mindtree’s (MTCL) 4QFY22 revenue at US$383.8mn, grew by 5.2% QoQ in CC terms, marking 6th consecutive quarter of 5%+ growth, but was tad lower than our estimate of 6%.
• EBIT margin of ~18.9% was in line, contracting by 30bps QoQ.
• TCV of ~US$390mn (US$375mn in 4QFY21) reflects the need for pick-up in order inflow…(continued).

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.

• PB Fintech (PBF) is among the leading insurance and lending intermediaries in India.
• It operates principally through its platforms PolicyBazaar/PaisaBazaar, and has also entered into newer businesses.
• PBF is well placed to benefit from the rising insurance penetration in India, especially through digital distribution.

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• Mindtree (MTCL) has reported revenue growth of over 5% QoQ (CC) for the fifth consecutive quarter in Q4FY22.
• Revenue stood at US$384mn, growing at 5.2% QoQ (CC) and 4.8% QoQ (US$) (Isec: 4.9%, Cons: 4.3%).
• Margin performance was impressive with EBIT margin at 18.9%, -30bps QoQ (Isec: 18.1%, Cons: 18.8%), above our estimates.

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.

• Kakao Pay’s six months end of the lock-up period comes up on 3 May, which could further put negative pressure on its share price. 
• Other factors including heightened competition, lack of margin improvement in 2021, and lifting nearly all social distancing measures in Korea are likely to further negatively impact Kakao Pay. 
• We expect additional 20 to 30%+ downside risk for Kakao Pay from current levels over the next 6-12 months. 

• WT Microelectronics (3036 TT) is looking to raise approximately US$190m in its Primary GDS offering to repay foreign currency denominated debt and for procuring raw materials in foreign currencies. 
• While we can’t explicitly state that the deal is well-flagged, the firm has seen its gearing ratio increase and CFO was negative in its latest financial year.
• In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

• On Monday, Bloomberg reported that Larsen & Toubro (LT IN) was planning a merger between its public-listed subsidiaries Mindtree Ltd (MTCL IN) and Larsen & Toubro Infotech (LTI IN). 
• The companies have responded by saying that the news reports of a merger between MINDTREE and LTI are “speculative in nature“.
• Below is a closer look at the likelihood of this Deal and the valuations of the two companies involved in this event.

• The Oakmark Select Fund declined 6% in the first quarter of 2022 compared to a 5% decline in the S&P 500.
• The Oakmarks Select Fund is based on a disciplined quantitative and qualitative screening process, according to the company’s research process.

• This model seeks short-sale candidates among companies that use aggressive accounting and/or exhibit deteriorating quality of earnings.  
• They are typically highly idiosyncratic shorts and require thoughtful analyses of upcoming catalysts.  When the company’s issues become well-known, there is often multiple compression as well as a rerating.
• These shorts can have high or low betas, valuations based on artificial earnings and exhibit good short responses to subsequently disappointing earnings.

• Amkor Technology manufactures and sells advanced semiconductor equipment.
• They make semiconductor packaging and test services for leading semiconductor companies such as Intel, Samsung, AMD, and etc
• The overall semiconductor industry has been growing, and Amkor’s revenue has been growing nicely as well.

• Mindtree reported strong revenue growth of 5.4% QoQ and stood at Rs 2,897 Cr in Q4FY22, reporting revenue growth of 49.1% YoY.
• The company posted operating profits of Rs 608 Cr, registering a growth of 2.7% QoQ, demonstrating the company’s superior execution and better service mix
• We recommend a BUY on the stock and assign 35x P/E multiple to its FY24E earnings of Rs 135.8/share to arrive at a TP of Rs 4,830/share, implying an upside potential of 22% from CMP.

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.

• A bit over a year ago Renesas Electronics (6723 JP) announced its transaction to buy Dialog Semiconductor (DLG GR) for €4.8bn (roughly ¥624bn) and the transaction closed end-August 2021.
• In September, Renesas announced a “Progress Update” covering various business segments, expectations for supply in the sector, and eventual “shareholder return” policy.
• This past week the Nikkei carried an article talking about a possible stock buyback later this year. I explore.

• Nikkei reported that Meituan intends to pay better compensation to small-and-medium restaurants and to delivery workers to prove that the company is in line with Beijing’s common prosperity measures.
• As Shanghai is under strict Covid lockdown, Meituan has seen a sharp rise in demand for grocery deliveries, however, margins are expected to be thin due to additional costs.
• The company has been under tremendous pressure to improve its cost structure and is undertaking 10-20% job cuts across all its business units.

• One Store revised its IPO filings, changing the comps but maintaining the same price range of 34,300 won to 41,700 won.
• The bankers used new comps in the valuation analysis (Tencent, Naver, Kakao Corp, and Nexon). The P/S multiple is slightly higher than previously but IPO discount range is also higher.
• Our target price of 48,713 won is 28% higher than the mid-point of the IPO price range of 38,000 won. 

• Tencent’s increase in investment acquisition activity has coincided with a general weakness in equity prices and valuation levels.
• Tencent management’s assessment of the fair value of its listed investee holdings, of RMB982.8bn on 31 December 2021, equates to roughly 27.4% of its market cap.
• The market value of Tencent’s investee holdings in more-mature, Chinese-listed, internet-orientated holdings equates to roughly 9% of its current market cap.

• Twitter Inc (TWTR US) announced a poison pill in a press release Friday with details in an 8-K Monday. It will dividend out one right/share on record date 25 April. 
• The right would allow Rightsholders, under certain conditions, to purchase $420 of shares for $210. That number is not a coincidence. 
• Some will get upset by this, but there is a lot of fine print. And I review how the poison pill fits into Delaware hostile defence standards.

• ONE Store (ONE KS) is looking to raise up to US$228m in its Korean IPO.
• One Store delayed its bookbuild by two weeks, with book building slated to run between 9th-10th May 2022. Listing, as well, has been pushed back to end May.
• Peers have slightly corrected since our last note and in our view, from a historical perspective, the low end seems justified.

• Infosys 4Q disappoints; Downgrade cycle upon us sooner than expected (INFY) reported US$4,280mn revenue for 4QFY22 (below our estimate of US$4,407mn) reflects ~1.2% growth QoQ in CC terms against our estimate of 4.3%.
• EBIT margin at ~21.5% (our estimate: ~23%) declined by 200bps QoQ.
• INFY attributed this weakness in revenue to seasonality (fewer working days), Covid impact and a one-off issue connected with a certain client (~100bps)…(continued).

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• Infosys Ltd (Infy) reported Q4FY22 revenue of Rs 32,276 Cr, up 1.3% QoQ and 0.8% QoQ (in CC terms) which was below our expectations.
• The company’s operating profit stood at Rs 6,956 Cr, reporting a de-growth of 7.3% on a QoQ basis.
• We recommend a BUY rating on the stock and assign a 29x P/E multiple to its FY24E earnings of Rs 71/share to arrive at a TP of Rs 2,060/share, implying an upside of 18% from the CMP.

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.

• NTGR spent the Q12022 reducing channel inventory of lower priced wireless routers, but there is still a lack of catalyst for consumers to upgrade after buying a router in 2020
• NTGR’s balance sheet makes the stock look attractive at current levels, but the first quarter has too many variables to push us off the sidelines
• During the first quarter of 2022 it was visible the degree of discounting NTGR had undertaken in the channel to remove lower priced wireless routers, or sub $299 price point

• Q4FY22 operating performance missed our expectations.
• Revenues grew by a mere 1.2% QoQ CC, while EBITM declined 190bps to 21.6%.
• Operating performance remained weak due to seasonality, a Covid-related impact in the early part of the quarter and a clientrelated contractual provision (likely to be recovered in FY23).

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.

• 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 Yashili International Holdings (1230 HK), 21Vianet Group (VNET US), Sezzle Inc (SZL AU), Link Administration Holdings (LNK AU), Razer Inc (1337 HK).  
• The lowest gross spreads are China Logistics Property Holdings (1589 HK), Virtus Health (VRT AU), 51 Job Inc Adr (JOBS US), Uniti Group Ltd (UWL AU), Irongate Group (IAP AU). 

• The CPI print was the highest in 40 years which will inevitably lead to rate hikes and quantitative tightening
• QT is extremely negative for any long-duration assets such as crypto and growth stocks 
• Nonetheless, the underlying growth of crypto is helping BTC to defend 40k and ETH to defend 3k

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• On the IPOs front, Zhihu and the SK twins were the main active deals, with LIC being in the pipeline for a potential launch in the coming week.
• Placement flows remained slow over the holiday shortened week. With Japan continuing to favour accelerated book build.

• Since the Russian invasion of Ukraine on February 24, the market has moved in somewhat of a barbell fashion.
• If higher interest rates and inflation characterize the landscape for the next several years, it likely spells the end of the era of unbridled speculation and high multiples, says FMI.

• WinSemi’s revenue was NTD$5.56bn in 1Q22, which was -7.3% YoY and -22.96% QoQ.
• We think WinSemi’s revenue could be seeing upside until 3Q22, and it could be still struggling in 2Q22. 
• The optical devices decreased the weakest. The communication infrastructure aligned the supply chain. The handset and WiFi decreased seasonality and the WiFi router was impacted because of chip shortage.

• Bukalapak’s (BUKA IJ) results saw very strong growth from its Mitra Business, with a much slower marketplace but we see the latter picking up as its specialty strategy is developed. 
• The launch of both Allo Bank Indonesia and Allo Fresh over the next two quarters should provide some excitement, whilst its gaming marketplace Itemku is already profitable. 
• Take rates should improve in 2022 as Bukalapak (BUKA IJ) offers a broadening array of services across its Mitra and marketplace verticals. Valuations look attractive versus peers. 

• TSMC’s 1Q results were extremely strong with revenue 4.15% above consensus and OP 9.04% above consensus. 
• With the strong pricing power and favourable forex factored in consensus OP estimates for the year have moved up to TWD954bn in line with our start of year estimate. 
• However, that now leaves limited further upside in our view and we expect earnings to decline next year rather than rise.

• Square Enix held their 20th anniversary event for Kingdom Heart over the weekend announcing a number of mobile titles as well the next mainline title Kingdom Hearts 4. 
• While a release date was not offered we would expect a launch during the next fiscal year.
• Just as importantly, the announcement lends added weight to already leaked information on the company’s upcoming pipeline.

• The Palm Valley Capital Fund invests in small cap stocks.
• The Fund is new, its underlying return-based investment strategy is not.
• The past year was the first time ever that aggregate small cap earnings actually achieved the forward estimates established by analysts one year earlier.

• Money Forward (3994 JP) posted solid Q1 financial results as revenue growth rebounded and EBITDA losses were within management’s forecast
• But revenue guidance for Q2 was weaker than expected and represents the lowest YoY growth to date which has raised questions on the effectiveness of marketing spend
• Full year guidance remains intact and the company expects that underlying growth in recurring revenue to remain robust which is positive for the long term thesis

• Elon Musk has apparently sent a letter to Bret Taylor, Chairman of the Board of Twitter, saying he would make a bid for 100% of Twitter at US$54.20/share. 
• Get it? Get it? Nudge nudge wink wink. That’s all part of the fun for him. 
• The question is whether this bid, which creates problems of whether one should take it seriously vs literally, or vice versa, engenders more discussion about how the platform makes money.

• WT Microelectronics (3036 TT) has entered into an agreement to acquire electronic component distributor  Excelpoint Technology (EXLP SP) by way of a Scheme at a cash consideration of S$1.93/share.
• This is an Offer premium 7.8% to last close but a 21.4% premium prior to the announcement Excelpoint was in discussions with a third party involving the company’s shares.
• Albert Phuay (founder and CEO) will reinvest part of his cash consideration under the Scheme in 20% equity of the Acquiring Entity, with the balance 80% stake owned by WT. 

• Visional Inc (4194 JP) had raised US$609m in its Japan IPO in April 2021, where it had been priced at the top end after books were reportedly multiple times covered.
• Visional is a HR technology company based in Japan. The company operates BizReach, an online recruiting platform that helps to connect professional job seekers to direct employers and third-party recruiters. 
• The Pre-IPO shareholder, YJ2 Investment, will be released from its lockup on 16th Apr 2022, 360 days post-listing.

• WT Microelectronics (3036 TT) will offer S$1.93 in cash and a final FY2021 dividend (ex-div date: 28 April, payment date: 13 May) of S$0.088 for a total consideration of S$2.018.
• The key scheme conditions are shareholder approval and Court approval. The scheme meeting will be held sometime in late June to early July.
• The offer price represents a 10-year share price high. At the last close of S$1.96, the gross and annualised spread for a mid-Sep effective date is 3.0% and 7.1%, respectively.

• We have previously commented on Valorant’s relatively unique position in esports due to its high degree of regional parity and that is being further underscored during its ongoing Masters tournament. 
• In particular, Japan, a region not known for any particular prowess in FPS titles secured its first top eight position generating significant buzz on twitter in doing so. 
• The implications look positive here for both Valorant overall and for Japan’s esports ambitions where it is probably now time to truly familiarise yourself with the potential plays.

• The revenue/ GM/ OPM/ EPS/ ROE is USD$17.57b/ 55.6%/ 45.6%/ NT$7.82/ 36.2% in 1Q22. The revenue/ GMO/ OPM is US$17.6-18.2bn/ 56-58%/ OPM: 45-47% in 2Q22 guidance.
• Moving into 2Q22, TSMC expects their business to be supported by HPC, Automotive related demands, partially offset by smartphone seasonality.
• The HPC platform is the strongest growing platform and the largest contribution to TSMC’s growth in 2022.

• International equities were faced with numerous risks in the first quarter, ranging from resurging COVID-19 cases in large geographies like China to inflation and potential monetary tightening globally
• Europe was most directly impacted by the conflict as crude oil and natural gas prices spiked and already-challenged supply chains were further pressured
• One of the key drivers of the rotation from growth to value stocks was action in the bond market

• Lionheart Studio Corp, which is one of the fastest growing game making companies in Korea, is getting ready to complete its IPO as early as 2H 2022. 
• Lionheart Studio is best known for its popular mobile game Odin which ranked first in app market sales right after its launch in June of last year.
• Kakao Games’ share price could fall further as some investors that are enthusiastic about Odin would rather invest invest in Lionheart Studio directly rather than in Kakao Games.

• Getir has been one of the hottest tech companies in Europe from Turkey, with its valuation reaching c. $12 billion in March this year.
• Intense competition has put pressure on the topline. There’s no clear path to profitability in the medium term, as players in the sector are still burning capital to build scale.
• Future consolidation in the Q-commerce sector is given. Diversification is likely the way forward for current leaders to create more ways to monetize from its users.

• ClearBridge is a leading global asset manager committed to active management.
• ClearBridge believes Europe has the support structures and spending capacity to avoid a recession and keep an incipient post-COVID-19 recovery intact.
• We were active in repositioning the portfolio to better manage the volatile risk/reward environment in international markets.

• Shanghai is in lockdown and citizens are finding it hard to get enough food.
• Community group purchase has been taking consumers from e-commerce apps.
• The central government reiterates the zero-COVID policy, but the Omicron variant is spreading with very few death cases.

• Softbank has raised $2.4bn (¥300bn) from the sale of TMUS shares to DT with proceeds likely earmarked for VF2 and possibly supporting ongoing share buybacks
• The sale price is below market but surfacing cash is the more positive takeaway and should ease concerns on leverage that have lingered as tech valuations fall
• The impact on the discount to NAV is likely to be weaker than the reaction to the TMUS/DT monetization in August/September

• Q1 results are better than expected, achieving record-high quarterly growth in SaaS revenue
• Growth is driven by Corporate Customer ARR, which rose by 47% YoY
• For growth investors, Money Forward is out top pick in Japan

• Shift Inc (3697 JP) reported 2QFY08/2022 results last week. Revenue grew 43.5% YoY to JPY15.6bn (vs consensus JPY15.2bn) while OP 99.2% YoY to JPY1.9bn (vs consensus JPY1.1bn).
• Both enterprise and entertainment markets saw strong growth in revenue while GPM of enterprise biz further expanded during the quarter.
• Shift’s share price has moved up by about 16% since its results announcement and we think there is further upside.

• This is a follow up chart of the VIX Index that was shared last week
• While we have dipped in the very short term, the underlying pattern warns of a significant rise
• Such a development is likely to be seen with a falling S&P 500

• On April 13, Money Forward (3994, the company) announced 1Q (Dec-Feb) FY11/22 sales of 4.756bn yen (+37.2% YoY), EBITDA of -1.159bn yen (vs. 358m yen for 1Q FY11/21)
• Our 1Q earnings forecasts were sales of 4.363bn yen, EBITDA of -2.239bn yen, OP of -2.683bn yen, and SaaS ARR of 12.537bn yen
• SaaS ARR of 12.904bn yen includes 8.727bn yen for Business domain corporate customers (+46.7% YoY), 1.264bn yen for Business domain sole proprietors (+35.0% YoY)

• Money Forward (3994 JP) reported 1QFY11/2022 results yesterday. 1Q revenue grew 37.0% YoY to JPY4.8bn and beat consensus estimates by 4.4%.
• Operating losses for the quarter was JPY1.6bn and accounted for around 34.7% of revenues during the period.
• MF’s SAAS model has started taking-off, we would highlight that string user growth comes at the cost of heavy advertising and subsidies.

• Introducing expanded ESG tear sheet; maintain BUY
• Trimming FY22-23 earnings estimates
• Extended Shanghai lockdown potentially adverse
• Extending MOU timeline for CFTC JV

•  TCS’ performance highlight was its strong deal bookings of USD 11.3bn, supported by mega deals of ~USD 1.8bn TCV (~0.5/0.8% revenue impact for FY23/24E)
• Medium term drivers such as prioritization of tech budgets, strong execution framework (including high retention) and services breadth including industry platforms remain intact.
• Our target price of INR 4,210 is based on 32x FY24E EPS with EPS CAGR at 12% over FY22-24E and we maintain ADD on TCS

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.

• Tata Consultancy Services (TCS) reported revenue growth of 2.6% QoQ USD terms (3.2%QoQ CC) and margins of 25% in line with our estimates.
• Revenue growth was broad-based across verticals with communications, BFSI and retail leading the growth.
• TCV was strong at US$11.3bn (all-time high) growing 49% QoQ and 23% YoY- partly aided by two mega-deals of ~US$1 bn each.

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.

• China’s gaming regulator, National Press and Publication Administration granted publication licenses to a list of 45 games, ending the nine-month long freeze on new game approvals in the country.
• While it comes as a relief, The Cyberspace Administration of China has kicked off a formal campaign to investigate and rectify algorithm security issues of tech companies.
• Though any of Tencent (700 HK) games didn’t receive approvals, the company’s shares have moved positively during today’s trade and up 2.1% from yesterday’s close.

• Zhihu Technology (ZH US) has launched an HKEx dual-primary listing to raise $150-200 million. The H Shares will be priced on 14 April and listed on 22 April.
• In Zhihu Dual-Primary Listing: A Question of Judgment, we stated that while a loss-making tech name is not everybody’s cup of tea, Zhihu has resilient performance and an undemanding valuation.  
• In this note, we will look at Zhihu’s potential HK-ADS premium/(discount). Zhihu pricing its H-shares at a discount of 3-4% to its ADSs will be reasonable, in our view.

• Chinese Internet data center services provider 21Vianet Group (VNET US) has recently received a non-binding proposal letter from the Hina Group and Shanghai’s Industrial Bank Co. 
• The indicative Offer price is US$8.00/ADS, or ~US$1.3333 per ordinary share.
• The Offer Price is utterly underwhelming. A successful outcome will more than likely find its way to the Cayman Court.

• ONE Store (ONE KS) is looking to raise up to US$228m in its Korean IPO.
• One Store is a mobile app market platform, formed by a cooperation between South Korea’s three telecom carriers, together with Naver Corp, an internet firm in South Korea.
• Given the lack of direct comparables, one way to look at valuation would be to compare the firm to its historical asking valuations.

• Viva Republica (Toss), one of the largest fintech companies in Korea, is expected to become the first decacorn in Korea in 2Q 2022. 
• Toss is expected to have a value range of 10 trillion won to 15 trillion won in the upcoming funding round in 2Q 2022. 
• Kakao Bank has P/S multiple of 20.2x in 2021. Applying this multiple on Viva Republica’s sales of 781 billion won, this would imply a valuation of 15.8 trillion won. 

• The 1Q22 revenue is NTD$63.4bn, and we estimate GM is ~40%, which is consistent with 1Q22 guidance.
• We estimate the order is pretty much confirmed in UMC in 3Q22, which should be ~NTD$65bn.
• UMC will increase about 10-15k/month of 28nm capacity in 2H22.

• In Q4FY22, Tata Consultancy Services Ltd (TCS) reported revenue growth of 3.4% QoQ in Rupee terms, beating our expectations.
• The company’s revenues stood at Rs 50,591 Cr, up 15.8% YoY.
• We recommend a BUY rating on the stock and assign a 31x P/E multiple to its FY24E earnings of Rs 135.2/share to arrive at a TP of Rs 4,200/share, implying an upside of 14% from the CMP.

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• VNET, formerly known as 21Vianet Group (VNET US), is a leading carrier and cloud-neutral data centre services provider in China. 
• It has received a non-binding privatisation proposal from The Hina Group and Industrial Bank Co Ltd A (601166 CH) at $8.00 per ADS, a 48.1% premium to the undisturbed price. 
• The Board has not made any decisions on the offer. Despite the juicy premium, the offer is unattractive in the context of historical multiples and share prices.    

• Zhihu plans to raise around US$130m 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 deal dynamics and structure.

• Here are the tradable stocks for Long/Short position buildups for the KOSDAQ 150 rebalancing in June.
• LONG (Additions): Dear U (376300 KS), Vidente (121800 KS), GOLFZON (215000 KS), Hana Micron (067310 KS), Danal (064260 KS), & Intellian Technologies (189300 KS)
• SHORT (Deletions): Daea Ti (045390 KS), Advanced Process Systems (265520 KS), Unison (018000 KS), Danawa (119860 KS), OE Solutions (138080 KS), & Toptec (108230 KS)

• China announced game approval last night, after 8 months of silence.
• We discussed in our previous note that China would resume game approval.
• There is no game approved for Tencent and Netease this round but we believe their approval will come in due time.

• Zhihu has filed for a dual primary listing on the HKEx through offering of 26m shares (Class A) by existing shareholders at a maximum offer price of HK$51.8 per share.
• Two ADS represent one Class A ordinary share and shares closed at US$2.56 per ADS, and the maximum offer price implies a 31.5% premium to the last close.
• Zhihu’s business model seems to work in favour and the company’s shares are extremely cheap at the current multiples. There is upside but we would remain cautious.

• Kurly’s management team needs to drastically lower its valuation expectation in this difficult market environment.
• Due to weak market conditions, it is likely to have a difficult time completing this IPO if its valuation is stretched to about 6 trillion won to 7 trillion won. 
• In our view, the company could complete its IPO if the valuation is close to about 3.5 trillion won to 4.5 trillion won. 

• The prices at work on the S&P 500 are warning of further weakness ahead
• Short term focus is on 4418 and if that gives way we could be en route towards the 4101 low again over the coming weeks
• Overall it is beginning to look as though the rebound over the past 4-6 weeks has been corrective