TMT/Internet Archives | Page 62 of 121 | Smartkarma

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: Lianlian DigiTech (2104619D CH) launches a US$78 million IPO.
• Event-Driven developments: Chilled & Frozen Logistics Holdings (9099 JP), JSR Corp (4185 JP), Shinko Electric Industries (6967 JP), IntelliCentrics Global Holding (6819 HK), Sciclone Pharmaceuticals (6600 HK). 

• Tencent Holdings Ltd. (腾讯) reported weaker-than-expected results in the fourth quarter of 2023, as the Chinese internet behemoth faced challenges growing its gaming business, particularly in China’s domestic market.
• During the three-month period, Hong Kong-listed Tencent generated 155.2 billion yuan ($21.9 billion) in revenue, up 7% from 2022, according to its earnings report released Wednesday. That missed the average estimate of 157.4 billion yuan by analysts surveyed by Bloomberg.
• Quarterly net profit also fell short of expectations, down 75% year-on-year at 27 billion yuan, compared to average analysts’ predictions of 33.3 billion yuan.

• On 21 March, Bloomberg reported that TPG and MBK had restarted a strategic review to reduce their HKBN Ltd (1310 HK) shareholdings. Previous privatisation rumours have fizzled out.
• The options include going private, attracting new investors, or raising cash through some of HKBN’s assets. Infrastructure-focused funds and one Chinese telco (likely China Mobile (941 HK)) were approached.
• The probability of an offer is low as TPG and MBK will need to accept a material discount on their cost per share and financing challenges due to high leverage. 

• Back on the 18 December 2023, superannuation service provider Link Administration (LNK AU) entered into a Scheme with Mitsubishi UFJ Financial Group.
• MUFJ offered Link shareholders A$2.10/share (in cash) plus a A$0.16/share dividend (25% franked), or a 32.9% premium, all-in. 
• The Scheme Meeting will now take place on the 24th April, with expected implementation on the 16 May. This looks done – and trading accordingly. 

• Micron shares have soared after the company reported its latest results with forward margin guidance well above consensus expectations.
• Micron appears to be successfully leapfrogging into ther HBM memory space, and says that its production for 2024E is sold out and for 2025E is already all ‘allocated’.
• Taiwan’s Nanya Tech has lagged its peers by a wide margin; Nanya lacks HBM products however HBM market demand is driving supply tightness for all DRAM.

• Chinese fintech giant Ant Group Co. Ltd. has completed the reshuffle of its consumer lending businesses Huabei and Jiebei, wrapping up a years-long, government-driven overhaul, a person close to the matter told Caixin.
• Ant’s two wholly owned small loan business units, the operators of Huabei and Jiebei, have fully exited the businesses during the past year.
• The two brands have been incorporated into Chongqing Ant Consumer Finance Co. Ltd. (CACF), a subsidiary set up in 2021 that is 50% owned by Ant, according to the person close to CACF.

• Adobe Inc.
• delivered robust financial results for the first quarter of fiscal year 2024, with a revenue of $5.18 billion.
• This represents a 12% year-over-year growth, demonstrating the significant role of Adobe products in powering the global digital economy.

• The second quarter of fiscal year 2024 saw Jabil Inc.
• achieve approximately $6.8 billion in revenue.
• This performance was in line with the guidance for the majority of the company’s businesses.

• Kuaishou reported C4Q23 revenue, IFRS OP, and IFRS net income in line, 31%, and 51% vs.  our estimates; and in line, 43%, and 67% vs. consensus.
• The significant profit beat was mainly due to the rich content supply on the platform that led to organic traffic influx, resulted in marketing costs reductions. 
• We raised our TP by HK$2 to HK$81, implies 20X PE, vs. current trading at 13X PE for 2025.

• Intel snags $8.5 billion in direct funding through the CHIPS and Science Act to advance its commercial semiconductor projects in Arizona, New Mexico, Ohio and Oregon.
• Investment Tax Credit (ITC) of up to 25% on > $100 billion in qualified investments and eligibility for federal loans up to $11 billion are also on offer
• Meanwhile, two separate reports suggest delays of up to two years in Ohio and suppliers in Arizona unable/unwilling to meet previous commitments to establish local supply chains. Ouch!

• In the Fourth Quarter and Full Fiscal Year 2024 Results, PagerDuty demonstrated solid growth, indicating the company’s steady progression in the market.
• The full-year revenue grew 16% year over-year, and non-GAAP operating margin expanded to 13%.
• Similarly, in the fourth quarter, revenue grew 10% to $111 million, exceeding the high end of the company’s guidance range.

Sunny Optical has released its FY 2023 numbers, which were weak but in line with expectations. Revenue declined 4.6% y-o-y to CNY 31.7 bn, due to lower shipments of handset-related products. Gross profit tumbled c. 30% to CNY 4.6 bn, with the margin shrinking to 14.5%. OCF plunged 64% to CNY 2.7 bn, while capex decreased slightly. FCF was therefore positive, albeit significantly lower. That said, the financial risk profile and liquidity remain healthy, supported by a large net cash position.

We believe the industry operating environment will stabilise. The company marked seven consecutive months of double-digit shipment volume growth in February 2024, indicating that the recovery in the smartphone market is continuing. We expect shipments to stabilise at this level, which will represent a robust increase from the FY 2023 numbers. We project positive revenue and earnings growth in FY 2024.

• Science Applications International Corporation (SAIC) delivered strong performance in the fourth quarter of fiscal year 2024 due to its focus on value provision to customers and a favorable funding environment.
• This resulted in significant revenue growth and throughout the fiscal year, pro-forma revenue increased by over 7%.
• The underlying business execution remains robust, as evidenced by the 11% increase in free cash flow per share and a 50 basis point increase in EBITDA margins, over last year.

• The Link Administration (LNK AU) IE considers Mitsubishi UFJ Financial (MUFG) (8306 JP)’s A$2.26 offer fair and reasonable as it is within its A$2.11-2.70 per share valuation range.
• The scheme remains conditional on several regulatory approvals – FIRB, Central Bank of Ireland, Isle of Man Financial Services Authority, India SEBI, and Financial Services Agency of Japan.
• Several substantial shareholders have sold or exited, lowering the scheme’s risk. At the last close and for the 16 May payment, the gross/annualised spread was 1.3%/9.7%.

• Q224 revenues of $5.8 billion, up 23% QoQ and up 58% YoY. It also well above the high end of the guided range of $5.5 billion.
• Net income turned positive & amounted to $476 million. This compares to a loss of $1 billion in Q124
• Forecasting current quarter revenues of $6.6 billion & gross margin of 26.5% at their respective midpoints

• KRX announced special changes to KOSDAQ 150. Since STCube (052020 KS) has been designated as “administrative issue,” the Korea Exchange will exclude it from KOSDAQ 150 on 26 March 2024. 
• PSK Holdings Inc (031980 KS) will be new addition to KOSDAQ 150 index, replacing ST Cube.
• PSK Holdings’ core business is providing process technology, source, and hardware for semiconductor packaging equipment.

• Despite a disappointing 4Q2023 earnings report, NetEase (9999 HK) remains firmly amid an earnings upgrade cycle.
• With NetEase touching on being oversold, near-term momentum indicators are displaying bullish signals.
• NetEase currently trades more than one standard deviation below its rolling 5-year historic average PE ratio.

Xiaomi Corp’s FY 2023 results were better than expected in our view, with much-improved profitability. The balance sheet remains healthy, and liquidity is sound. We expect the company to continue performing well, driven by a projected recovery in the smartphone market, Xiaomi’s premiumisation strategy and strong demand in overseas markets. Global smartphone shipments remain weak, but may be bottoming out. We believe the company is well-positioned for future growth.

The smart EV development has drained less cash than we had expected so far. Xiaomi has been able to fund the investment using internal cash flow. Pricing for the SU7 (scheduled to be launched next week) has not been disclosed. The EV market in China is extremely competitive, with over 150 carmakers. Apple has exited the EV business due to a lack of competitive advantage, and Xiaomi may face the same issue. While it is unclear if Xiaomi will be successful in the EV business, we believe it may not be as detrimental to the credit as originally feared.

• Operating profit and its margin reached historical high in 4Q23.
• Monthly active user base continued to expand, which is rare for other apps.
• GMV (Gross Merchandise Value) of the live broadcasting sales increased rapidly by 29% YoY in 4Q23.

• Sourcenext Corp (4344 JP) plans, develops, and sells PC software, smartphone apps, and IoT products.
• In POCKETALK®, besides the existing device business, the company will focus on sales of software products, including Simultaneous Interpreter for the POCKETALK® for BUSINESS series for corporate customers.
• The revision is mainly due to the extended lead time from inquiry to full-scale orders for the POCKETALK for BUSINESS Simultaneous Interpretation web browser version.

• Baishan Cloud, China’s independent edge cloud service provider, filed to go public in Hong Kong. CICC and investment bank Haitong are the lead underwriters in this offering.
• Founded in 2015, BaishanCloud (1568617D HK) is led by its CEO and Founder, Mr. HUO Tao, and a highly experienced founding team.
• I believe the company will achieve a break-even this year, coupled with a strong international expansion, potential revenue acceleration and gross margin improvement as the business continues to scale up.

• Sun* (4053 JP) provides consulting, software development, recruiting, and other services to companies that seek to create value or businesses, including startups.
• In FY12/23, revenue was JPY12.5bn (+16.5% YoY), operating profit JPY1.8bn (+96.8% YoY), recurring profit JPY2.3bn (+99.1% YoY), and net income attributable to owners of the parent JPY1.6bn (+90.4% YoY).
• Sun* does not disclose a medium-term business plan with quantitative targets, but it releases qualitative targets related to KPI growth.

• Azbil Corp (6845 JP) provides automation services for buildings, factories, and plants and also offers subsistence-related automation services in the lifestyle area.
• In FY03/23, sales were JPY278.4bn (+8.5% YoY), operating profit was JPY31.3bn (+10.7% YoY), recurring profit was JPY32.1bn (+8.9% YoY), and net income attributable to owners of the parent was JPY22.6bn.
• Azbil in May 2021 announced a new medium-term management plan to cover the four fiscal years from FY03/22 to FY03/25 and new long-term targets for FY03/31.

• In 4Q23, Tencent experienced a one-digit growth, but its margin improved significantly.
• We believe Tencent’s social networks will stop shrinking after the company sold movie assets to China Literature.
• We believe the stock will have an upside of 37.5% and a price target of HK$397 for year end 2024. Buy.

• Tencent (700 HK) reported 4Q results today. Both revenues and OP increased 7.1% and 42.0% YoY, however, both revenue and OP fell below consensus estimates.
• The company also announced an increase to 2023 dividends and more than doublethe size of the company’s share buyback in 2024 compared to 2023.
• We expect Internet VAS to grow at single-digits in 2024, however, high-margin new products to help boost margins in 2024.

• CEO Jensen Huang’s keynote address at Nvidia’s GTC event on March 18 was a reminder that generative AI is about building secure and reliable systems, not chatting up the future.
• NEC has spent three years developing its own AI supercomputer, creating the best performing Japanese-language large language model (LLM), and testing new AI products in-house before delivering them to clients.
• The introduction of generative AI and LLMs into business- and industry-specific solutions should provide meaningful additions to NEC’s telecom services, social infrastructure, aerospace and national security related businesses. 

• Earlier expectation on Micron will have rooms to raise becoming a reality, largely driven by over 30% q/q NAND bit price jump for storage business in 1Q24.
• 10ppts stronger 2Q24 sales guidance and 3-6ppts higher gross margin guidance are driving free cash flow improvement.
• AI server, PC, and smartphone driving DRAM bit demand and HBM3e/HBM4 and 1-gamma EUV DRAM slowing bit supply growth both are positive except MOI remains 15% above 5 years average. 

• Reddit (RDDT US) is looking to raise up to US$750m in its US IPO.
• Reddit is an online social media platform where users are able to join communities, engage in conversations, research, exchange goods and services as well as create new communities.
• In our previous note, we talked about the company’s historical performance. In this note, we share our quick thoughts on valuation.

• WT Microelectronics (3036 TT) is looking to raise up to US$444m in its upcoming global depository receipts (GDRs) offering.
• WT Microelectronics recently announced its board’s resolution to issue between 68-85m new shares in the form of GDRs, with the use of proceeds geared towards purchasing of raw materials overseas.
• Similar to previous GDR listings, the deal is a long drawn out process with the firm required to jump through a number of board/shareholder/regulatory approval loops.

• Coforge (COFORGE IN) is looking to raise around US$386m in its upcoming qualified institutional placement (QIP).
• In an announcement released on Saturday, Coforge had mentioned its board’s approval to raise up to INR32bn via a QIP. Since then, the shares have corrected 9.1%.
• The deal would be a large one to digest at 14 days of three month ADV. That being said, the company’s last selldown did well.

• Micron Technology reported very positive revenues this quarter and a return to profitability
• A large part of this stems from the impact that HBM demand is constraining production of standard DDR5 DRAM, driving it into a shortage
• This is good news for Micron and its DRAM competitors Samsung and SK hynix

• Sunpower is facing a severe liquidity problem and may need to raise $100-300 million before January to avoid bankruptcy
• The company operates as a wholesaler of residential retail solar panel systems, providing equipment to third-party developers or selling directly to residential customers
• Trade credit tightening terms and potential customer hesitation due to financial instability are contributing to Sunpower’s uncertain future

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• FD Technologies is a UK-based software and services company with a market cap of £300 million.
• The company has three segments, with its KX segment being the fastest growing, accounting for around 26% of its revenue.
• KX provides a time-series database solution that is expanding beyond the finance industry, with ARR expected to reach £80 million by FY24.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Shinko Electric Industries (6967 JP) pre-conditional tender offer from the JIC alliance is JPY5,920 per share. The gross spread has narrowed from a high of 10.4% to the current 4.2%. 
• The narrowing spread can be attributed to the JSR Corp (4185 JP) tender launch, which suggests likely China SAMR approval, and Ibiden Co Ltd (4062 JP) giving up recent gains. 
• Like JSR, we expect China SAMR to allow JIC to withdraw its Shinko merger control filing. There is a good chance the tender launches before the guided late August start.

• Tencent is due to release FY23 results tomorrow morning after the HK close. The earnings call is scheduled for 14:00 SAST.
• The market is expecting 1.8% QoQ revenue growth, 8.6% YoY. Strong QoQ revenue growth of 10% is expected for the advertising segment.
• QoQ revenue growth for the gaming sector is expected to decline by 4.9%. Domestic gaming revenue is expected to fall by 7.6%, international gaming revenue expected to increase by 9.6%.

• The share price of Sakura Internet has risen by over 500%, adding Y230 billion in market cap, since investors began pricing in the AI opportunity
• We use pricing data from Amazon AWS to model the revenue opportunity for Sakura’s GPU AI-cloud
• We estimate that 2,500 H100 GPUs could yield an equity value of Y49 billion, far less than the value the market has ascribed

• Reddit (RDDT US) is looking to raise up to US$750m in its US IPO. 
• Reddit is an online social media platform where users are able to join communities, engage in conversations, research, exchange goods and services as well as create new communities.  
• In this note, we talk about the company’s historical performance.

• EDR is likely to be acquired at a premium price in the near future, offering an attractive risk-reward opportunity for investors.
• Key assets like a stake in TKO, talent representation business (WME), and events business (EE&R) are considered valuable to potential buyers.
• EDR announced a review of strategic alternatives on 10/25/23, with CEO Ariel Emanuel noting the need to maximize value for shareholders due to a disconnection between stock price and asset value.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• The results for 1Q24F should remain unchanged, even though we anticipate a slight upside.  
• UMC’s outlook for 2Q24F is deteriorating, with a likely decline 5-10% QoQ.
• The demand from UMC’s clients is not improving in 2Q24F.

• Taiwan Semiconductor (TSMC) – ADR (TSM US) revenue growth target for 2024F is set at 25% or higher.
• TSMC’s dominance in the CoWoS market, with nearly 100% share, positions them well.
• TSMC’s plans to establish a new Fab in Chiayi, Taiwan, reflect the growing end demand.  

• This is our first report on GoodRx Holdings Inc.
• The company announced its fourth-quarter earnings and highlighted significant progress which included saving consumers approximately $15 billion last year, increasing their access to affordable medications while expanding their relationships with retail partners through hybrid retail direct and Pharmacy Benefit Manager (PBM) contracting and cost savings initiatives.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Synopsys (SNPS) is recommended as a good long-term holding
• Software Integrity business likely to be divested to improve overall profitability
• EDA and IP divisions of the company have been performing well with adjusted operating margins of over 30%

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Team Internet’s FY23 results exceeded our forecasts and consensus on revenue and EBITDA. Online Marketing was driven by increased consumer engagement, reflecting investment in delivering more targeted ads across a wider array of channels. The group’s latest acquisition, Shinez, strengthens Online Marketing via diversification of publishers and is earnings accretive with scope for further synergies. Online Presence returned to strong revenue growth, driven by demand for exotic domains, pricing optimisation and strategic partnerships. Robust free cash flow enabled diverse capital allocation, focused on shareholder returns.

• Tata Sons, holding company of Tata Group, is looking to raise around US$1.1bn via selling a 0.65% stake in Tata Consultancy Svcs (TCS IN).
• The deal doesn’t appear to be well-flagged although it could be part of Tata Sons’ recent moves to avoid an RBI mandated listing next year.
• In this note, we talk about the deal dynamics and run the deal through our ECM framework.

• Wins Co. is engaged in the business of developing and supplying information security solutions and developing software related to network security to protect networks from cyber threats and viruses. 
• The company has a consistent growth in sales and profits. It also has a strong balance sheet. At the end of 2023, it had a debt ratio of 15.4%. 
• Wins Co is trading at EV/EBITDA of 1.7x, P/E of 7.8x, and P/B of 0.9x in 2024 which are 75%, 26%, and 25% lower than the historical valuation multiples.

• This is our first report on AI software platform company, C3 AI. The company has demonstrated positive performance in their third-quarter fiscal 2024 results with a total revenue of $78.4 million, marking an 18% YoY growth and surpassing their guidance range.
• The total number of customer engagements has also seen an increase of 80% compared to the previous year.
• The company reported a non-GAAP gross profit of $54.7 million with a gross margin standing at 70%.

• This is our first report on capital equipment manufacturer, Kulicke and Soffa Industries Inc.
• The company delivered their Q1 2024 earnings recently, announcing an impressive revenue of $171.2 million for the December quarter.
• However, not all news from the call was as positive because GAAP net income stood at only $9.3 million, alongside non-GAAP earnings per share at $0.3. However, this was still slightly higher than the guidance midpoint.

• This is our first report on Envestnet, a leading provider of integrated wealth management solutions.
• The company announced strong financial results for the fourth quarter and full year of 2023 in its latest earnings call.
• The company reported solid growth and successfully executed its strategic initiatives, leading to significant margin expansion.

• This is our first report on quantum computing systems producer, IONQ. The company has reported its Fourth Quarter and Full Year 2023 earnings, showing strong performance within the quantum computing sector.
• The company generated $6.1 million in Q4, bringing the total recognized revenue to over $22 million for the full year, exceeding the upper end of their projected range.
• For the year, IonQ achieved $65.1 million in bookings, greatly surpassing its original bookings midpoint of $40 million, providing evidence of successful performance by both the technical and commercial team.

• This is our first report on cloud-based solutions provider, N-able Technologies Inc.
• The company reported a solid performance for the fourth quarter and fiscal year 2023, celebrating a revenue growth of 14% in constant currency for the whole year, and 11% for the fourth quarter.
• The adjusted EBITDA in the fourth quarter was reported as $39.2 million, showing a 36% margin, and $143.4 million for the full year, indicating a 34% margin.

• Progress Software Corporation concluded its fourth fiscal quarter of 2023 with strong performance across its portfolio, especially in its OpenEdge, DataDirect, and Sitefinity products.
• The company recorded top-line revenues of $178 million, which can be attributed to stable demand for its products.
• Further, the company’s net retention rate was commendable, remaining at a steady 100%, and operating margins were better than expected.

• This is our first report on edge cloud platform provider, Fastly.
• The company reported its fourth quarter 2023 earnings with revenue of $506 million, a 17% year-over-year growth.
• The company also reported a record fourth-quarter revenue of $137.8 million, a 15% year-over-year and 8% quarter-over-quarter increase.

• This is our first report on online automotive marketplace, CarGurus.
• The company ended 2023 on a strong note, surpassing expectations and successfully accelerating their revenue growth across their platform.
• Despite challenges faced by customers, such as weak consumer demand, the lack of affordability, and increased costs linked to floor plan financing, CarGurus’ listings business demonstrated commendable resilience, pricing power, and growth acceleration.

• Nvidia GTC Conference This Week Likely to Create Newsflow for Many Tech Names
• Samsung Could Hike NAND Flash Prices by 20%; Silicon Motion for Exposure
• TSMC Reportedly Placing Orders for Additional Advanced Packaging Capacity, Likely In Response to Demand Strength

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads: APM Human Services Internation (APM AU), Qantm Intellectual Property (QIP AU), Genex Power Ltd (GNX AU), Probiotec Ltd (PBP AU), Alumina Ltd (AWC AU), Silver Lake.
• Lowest spreads: Roland DG Corp (6789 JP), Tietto Minerals Ltd (TIE AU), CPMC Holdings (906 HK), Pact Group Holdings (PGH AU), Vinda International (3331 HK), Snow Peak Inc (7816 JP). 

• TSMC: +15% ADR Premium; Likely to Trend Further Lower Over Time
• UMC: -2.3% Discount; Decent Level to Long the ADR vs. Short Local
• ASE: +11.6% Premium; Continue to Advocate Shorting the Spread Here

• This is our first report on internet information and services provider, Ziff Davis.
• The company has projected an optimistic growth outlook for 2024 as it reported a solid fourth quarter performance for the fiscal year of 2023.
• The company’s CEO, Vivek Shah expressed his confidence over the company’s business set up for notable growth in 2024 provided the depreciation 1.4% over the last two years.

• This is our first report on cloud-based solutions provider, Alarm.com.
• The company posted robust fourth quarter and full-year results for 2023 that surpassed expectations.
• The company’s software-as-a-service (SaaS) and license revenue reached $148.3 million in Q4, reflecting a 10.3% increase compared to the previous year.

• This is our first report on FormFactor Inc., a leader in the semiconductor industry known for providing necessary equipment for the testing and measurement of chips before they hit the market.
• The company recently reported their fourth quarter 2023 earnings.
• FormFactor has achieved a consistent performance throughout the past year with CEO, Mike Slessor, confirming top-line results to be steady across the four quarters.

• This is our first report on Vishay Intertechnology, a renowned manufacturer of semiconductors and electronic components.
• In the last quarter, the company disclosed revenues of $785.2 million, within the guidance range of $770 million to $810 million.
• Notably, the lower industry demand was led by higher levels of finished goods inventories.

• Sanmina Corporation began fiscal year 2024 by meeting its outlook, demonstrating the firm’s strong cost management and operational execution, key ingredients to its adaptability amidst dynamic market conditions.
• However, the firm has had to navigate ongoing customer inventory adjustments and softer demand across the industry, which has led to a decline in revenue to $1.87 billion for the first quarter.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• This is our first report on high-speed connectivity solutions provider, Credo.
• The company reported Q3 FY24 earnings, with revenue at $53.1 million and non-GAAP gross margin at 62.2%.
• Credo’s results and future growth expectations are being fueled by the growing market for high-speed, energy-efficient connectivity solutions in data infrastructure.

• This is our first report on Belden, a networking, connectivity, and cable products player.
• The company experienced high revenue and EPS in Q4 2023, both exceeding previous guidance.
• The solutions transformation has been cited as driving incremental demand and margin expansion.

• The P/E ratio has risen above 20x this fiscal year from no more than 13x in the previous four years, reflecting successful restructuring and investor enthusiasm for AI. 
• Profit margins are rising, but remain moderate in absolute terms with room for further improvement. The shares may consolidate, but they do not look overvalued.
• Management is aiming for generative AI sales of ¥50 billion in three years time. This is less than 2% of total sales, but a positive indicator for NEC’s software business.

• A shares were up small on the week. The spivvier the better. HK was up better, especially among the liquid names.
• Net SOUTHBOUND buying was +HK$21.4bn in the fourth post-holiday week vs +HK$17bn the week before. SOUTHBOUND has net bought every day since the end of Chinese New Year.
• The flavour of SOUTHBOUND buying has been high-div SOEs for months and months. That is starting to change slightly. Tencent was a net buy the second week in a row. 

• Even if you were an activist, or a trader with an activism tilt, be long Keisei Electric Railway Co (9009 JP) vs. Oriental Land (4661 JP).
• Reportedly, Singtel (ST SP) is negotiating a sale of Optus. Both Singtel and Optus scotch those rumours. 
• Alumina Ltd (AWC AU) and Alcoa (AA US) enter into a Scheme. As expected. The key question: is CITIC, with 18.9% of shares out, supportive?

• In this insight, we take a look at the Potential ADDs/DELs for the BSE SENSEX, 100, and 200 Indices in the June 2024 index rebal event.
• As things stand, there could be one index change for the SENSEX index but there is room for these names to change during the remainder of the reference period.
• Separately, there could be five ADDs/DELs for the BSE 100 index and six ADDs/DELs for the BSE 200 index.

• Our base case valuation is market cap of US$5.4 billion or target price of US$35.9 per share, which is 20% higher than high end of the IPO price range (US$30).
• We estimate Astera Labs (ALAB US) to generate revenue of $221.3 million (up 91.1% YoY) in 2024 and $304.5 million (up 37.5% YoY) in 2025.
• Many investors are willing to take extra risk to invest in companies such as Astera Labs that could generate strong sales growth amid rush to aggressively expand AI capabilities.

• We anticipate that the guidance upper limit for 1Q24F results may be reached.  
• The outlook is expected to see approximately a 10% QoQ increase in 2Q24F.  
• The recent stock market performance may reflect enthusiasm for Vanguard, despite temporary disregard for the name.

• Taiwan Semiconductor Manufacturing Company Limited (TSMC)’s fourth quarter revenue increased 14.4% sequentially due to the robust ramp-up of its industry-leading 3-nanometer technology.
• The gross margin, however decreased by 1.3 percentage points to 53% primarily due to margin dilution from 3-nanometer technology.
• The operating margin decreased by 0.1 percentage points to 41.6%, slightly ahead of the company’s guidance.Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Cyber Security Cloud Inc (4493 JP) provides customers with subscription services based on software it develops in-house.
• In FY12/23, CSC reported revenue of JPY3.1bn, operating profit of JPY550mn, recurring profit of JPY560mn, and net income attributable to owners of the parent of JPY427mn.
• Cyber Security Cloud, Inc. announced the acquisition of its own shares

• Established in 1950, Nihon Denkei (9908 JP) is an independent specialized trading company with a leading domestic share, by sales, in electronic measuring instruments (source: Nihon Denkei).
• In FY03/23, sales were JPY104.8bn (+14.1% YoY), operating profit was JPY3.7bn (+40.4% YoY), and recurring profit was JPY4.0bn (+31.9% YoY).
• On June 24, 2020, the company announced the key elements of its medium-term plan, INNOVATION 2030.

• Bumble Inc.
• has reported an increase of 13% in its Q4 2023 revenue to $274 million, meeting its financial projections.
• This growth was propelled by a 16% rise in paying users, with contributions from both the Bumble and Badoo apps.

• Oracle Corporation’s Third Quarter Fiscal Year 2024 Earnings presented a mixed but predominantly positive picture.
• Chief Executive Officer Safra Catz noted excellent overall quarterly performance, with quarterly revenue meeting expectations and earnings per share exceeding it by $0.02.
• The company’s infrastructure cloud business (OCI) was singled out for significant praise, as it has become the main factor accelerating the overall revenue growth rate, even outpacing their cloud competitors.

• Peloton Interactive, Inc., the manufacturer and seller of indoor exercise bicycles and treadmills, released its Q2 2024 result addressing several impactful issues regarding market penetration and sustainability.
• During the earnings, several overarching themes were pointed out, such as Tread and Tread+ growth, the strengthening of the all-important second leg to support growth, and the area’s substantial rise in renewal growth.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• This is our first report on Itron Inc., a leading provider of end-to-end solutions that measure, manage and analyze energy and water use.
• The company reported a strong performance for the fourth quarter of 2023 during its recent earnings conference call.
• The company posted year-on-year revenue growth of 23% to $577 million, driven by robust customer demand and improved supply chain balance.

• BZ reported 4Q23 revenue in-line/2.6% vs. our estimate/consensus, non-GAAP NI beat our estimate/consensus by 3.5%/21.9%, mainly attributable to effective cost control measures. 
• We think the competitive advantages over peers grand BZ privilege to enjoy the early sign of hiring demand recovery, whereas overall China job market remains lackluster in early 2024.
• We upgrade the stock from SELL to BUY and rise TP by US$7.5 to US$22/ADS.

• Alibaba Group’s office messaging and meeting app DingTalk is allowing users of Tencent Holdings’ rival social media app WeChat to directly join any meeting initiated on DingTalk without first registering.
• DingTalk users can now share a meeting link with WeChat users, who can enter the meeting within WeChat.
• Previously, DingTalk required participants to download its meeting app and register.

• Astera Labs (ALAB US) is scheduled to debut its IPO on 20 March. The company is offering 17.8 million shares at a price of $27 to $30 per share. 
• Founded in 2017, Astera Labs is a fabless semiconductor company headquartered in Silicon Valley. The company designs and sells semiconductor technology, but the production is outsourced.
• Astera Labs’ major competitors include Montage Technology (688008 CH), Parade Technologies (4966 TT), Broadcom (AVGO US), Credo Technology Group Holding (CRDO US), and Marvell Technology (MRVL US).

• In the previous 4Q follow-up report, we examined “Copilot NAVI,” a service released by JBS in November, which includes videos and summary materials as a guide for enterprise users, for Microsoft 365 Copilot, the AI tool embedded in Microsoft 365 applications, to bring efficient answers to users’ instructions and questions through a chat interface (which can be a daunting challenge).
• JBS followed up in December with interactive workshops to experience Microsoft 365 Copilot before deployment.

•  In this report, we examine JBS enterprise cloud security initiatives, which are a top priority for cloud IT systems managers.

• Pca Corp (9629 JP) develops and sells corporate accounting software and other business systems for small and medium-sized companies.
• Full-Year FY03/23 revenue was JPY13.0bn (-3.0% YoY) due to lower replacement demand for the PCA X series of products, support for which ended in December 2021.
• PCA Corporation has announced changes to its dividend policy and revisions to its dividend forecast.

• Hon Hai’s 4Q23 profit beat consensus and management has become more bullish on 2024E revenue thanks to demand for AI servers.
• Guided 40% YoY growth expected for AI servers; Separately, Hon Hai reportedly could have won a major AI server order from HP Enterprise according to Digitimes.
• Hon Hai shares are finally moving; We see room for continued upside based on re-rating of the company’s valuation. Positive news flow potential through Nvidia’s GTC conference next week.

• After the close on Tuesday, SurgePays reported mixed 4Q23 results.
• Total revenue of $32.3 million exceeded our $32.1 million estimate but was slightly below consensus of $33.6 million.
• However, EBITDA of $3.4 million was below both our estimate and consensus of $6.5 million and $6.9 million, respectively.