TMT/Internet

• On Friday 15 November, KKR announced it would launch KKR Tender2 to buy the rest of FujiSoft not purchased in KKR Tender1. Their new price is ¥1 higher than Bain’s.
• Fuji Soft Inc (9749 JP) announced (J) it supported the KKR2 Tender and rejected the Bain TOB Proposal. KKR1 shareholders are “made whole” at ¥9,451/share. Minimum is 53.22%.
• The document, however, is a Governance Disaster – an absolute shambles, effectively gaslighting investors at every turn. And now investors can see it was problematic from the start.

• TSMC cash dividend has increased by 65% in 2 years or NT$2.75 in 4Q22 to NT$4.50 in 3Q24. It will keep increasing.
• TSMC is spinning cash. 2nm-16A could increase Capex intensity but still we estimate that quarterly dividend can increase to NT$5.50 in 2025 and NT$6.00 in 2026.
• Consensus forecasts similar EPS growth for TSMC and ASML: 30% in 2025, 20% in 2026. TSMC is 50% cheaper than ASML. 2025 PEx: TSMC 18x and ASML 28x.

• TSMC: +16.7% Premium; Further Market Weakness Could Soon Open Up Good Long Level
• UMC: -2.1% Discount; Good Level to Go Long the ADR Spread
• ASE: -0.1% Discount; Premium Completely Broken Down & Local Short Interest Continues to Surge

• Hon Hai, Pegatron, and Quanta Gear Up for Potential U.S. Investment Surge Amid Trump Policy Speculation
• PC Monitor: Asustek & Lenovo Signal Strong PC Growth, AI PC Expansion in Process
• Semiconductor Memory Q324 Revenue Close To Historic Highs Even As Decoupling Intensifies 

• TSMC: more restrictions on export to China. TSMC can’t make 2nm in US before 2028-29. Lawsuit in Arizona.
• Korea: special chips act to give chipmakers subsidies and an exemption from a national cap on working hours. Korean engineers only work 52 hours / week. That’s a problem.
• Amazon more in-house AI chips. Super Micro trying to avoid delisting. Smartphone ASP keep increasing because chip prices are increasing (ie Mediatek, Qualcomm). AI PC reaching 20% in 3Q214. 

• Asustek Guides for 20%+ YoY PC Revenue Growth in 4Q24E;  Lenovo Delivers 17% YoY PC Revenue Growth in CY3Q24
• AI PCs: A Multi-Year Upgrade Cycle with Rising Average Selling Prices; AI PCs 80% of the PC Market by 2027E
• Maintain Structural Long View for AI PC Up-Cycle; Asustek, Acer, & Lenovo Well-Positioned Through 2025E

• Cuscal (1229Z AU) is looking to raise A$337m (US$218m) in its Australia IPO.
• Cuscal is an authorized deposit-taking institution (ADI) in Australia that primarily provides financial infrastructure and payment services in Australia.
• In this note, we look at the updates since our last look-through and share our thoughts on valuation.

• Pony AI (PONY US), an autonomous mobility solutions provider, is looking to raise up to US$195m in its US IPO.
• As per Frost & Sullivan, Pony AI was among the first companies in China to obtain licenses to operate fully driverless robotaxis in all four Tier-1 cities in China.
• We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

• In 3Q2024, Sea Ltd demonstrated its ability to turn a profit at Shopee, whilst booking strong growth, with sales & marketing kept well in check and active users increasing substantially.
• E-Commerce registered higher take rates, through higher commissions, more paid advertising, and increasing levels of self-fulfilment through SPX Express, whilst Digital Financial Services saw a rapid acceleration in loan growth.
• Digital Entertainment was back on form with strong growth in bookings, active users, ARPU, and adjusted EBITDA. Management remains confident about 4Q2024 and the outlook for 2025.

• KKR & Co (KKR US) has secured the Fuji Soft Inc (9749 JP) Board’s unanimous support by bumping its second tender offer to JPY9,451, a JPY1 premium to Bain’s JPY9,450 offer. 
• The Board is claiming a “fiduciary duty” win as it has secured a higher offer from KKR but paradoxically signalling that it will not negotiate a bump from Bain.  
• Bain will likely walk rather than try to win the Board’s support by revising terms. At the last close, the gross spread to KKR’s offer is 3.7%.

• I tally 48 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Six new deals this week! TOs for Agro Kanesho (4955 JP), Nishimoto (9260 JP), Chita Kogyo (5993 JP), Macromill (3978 JP). Also Silk Logistics (SLH AU) and Avarga (AVARGA SP).
• Key updates took place on: Pacific Smiles (PSQ AU), ASMPT (522 HK), Nec Networks & System Integr (1973 JP), Seven & I (3382 JP), and Malaysia Airports Holdings (MAHB MK).

• Tencent reported C3Q24 revenue, IFRS operating profit, and IFRS net income in-line, in-line, 11% vs. our estimates and in-line, in-line, 18% vs. consensus. 
• The bright spot is fintech transaction volume grew 10% YoY showing gain in market share, which coupled with rebound in consumption since October should rive recovery.
• We raise TP by 2% to HK$518. Tencent is still our TOP PICK in an uncertain geopolitical environment with an upswing fundamental story.

• The December review will use closing prices from 18 November to determine the list of stocks that will be included into and excluded from the ETFs.
• As of the close on 15 November, we see NAURA Technology Group (002371 CH) replacing Huaneng Lancang River Hydropow (600025 CH) in the ETFs.
• NAURA Technology has doubled in price this year, while Huaneng Lancang has corrected from its highs and could be deleted from the ETF in just one quarter.

• Pony AI, a China’s robotaxi operator and self-driving technology company, plans to raise up to $360M in upcoming IPO and concurrent private placements.
• Pony AI is expected to IPO next week. The company’s amended F-1 puts the price range per ADS at $11.00-$13.00, implying a market cap of ~$4.2B at the midpoint.
• I believe Pony AI may price its IPO at the bottom of a range after WeRide’s mixed debut. IPO valuation suggests a drop from last round valuation of ~$8.5B.

• Fabrinet’s first-quarter results for fiscal year 2025 reveal both promising growth and challenges.
• With a revenue of $804 million, the company surpassed the upper end of its guidance range, representing a 17% year-over-year increase and a 7% sequential rise from the previous quarter.
• This growth was driven by significant performances in its major operating segments, particularly in optical communications.

• In the most recent financial results, HubSpot, Inc. reported several positives and negatives that are important for investors to consider when evaluating the company’s investment potential.
• On the positive side, HubSpot achieved a 20% year-over-year revenue growth in constant currency, demonstrating robust financial performance.
• The company’s operating margin grew by over 200 basis points, reaching 19%, showcasing a strong emphasis on operational efficiency.

• Lattice Semiconductor provided a detailed overview of its financial performance and strategic outlook for the third quarter of 2024.
• The company’s results were generally in line with internal expectations, marking distinct progress in specific segments despite facing notable industry-wide headwinds.
• Revenue for the quarter was reported at $127.1 million, maintaining alignment with previously provided guidance.

• Match Group, a leading company in the online dating industry, has presented mixed results in their third-quarter financial performance for 2024.
• The results reflect both opportunities and challenges across different brands within the company’s portfolio, particularly in flagship products such as Tinder and Hinge.On the positive side, Match Group continues to see strong momentum with Hinge, which has delivered impressive user growth and revenue achievements.
• Hinge reported a 36% year-over-year increase in direct revenue, supported by a 21% rise in users willing to pay for the app, and a 12% increase in Revenue Per Payer (RPP).

• Samsung Electronics (005930 KS) announced a massive share buyback program worth 10 trillion won which represents 3.1% of its market cap.
• Of this total amount, about 3 trillion won will be purchased and cancelled in the next three months. This will include 50,144,628 common shares and 6,912,036 preferred shares.
• We believe that this massive share buyback and cancellation is likely to boost Samsung Electronics’ share price resulting in a strong outperformance relative to KOSPI in the next 6-12 months. 

• The stock’s still below 1x PBR. But with Samsung’s tech gaps and slowdowns, going all-in on an outright long here off the back of this buyback feels way too early
• The key is whether pref discounts tighten like 2015, but with a more balanced buyback this time and narrowing pref discounts, making a pref rally harder to predict short-term.
• The goal’s the same as 2015—boosting the family’s control. If the remaining buyback leans pref-heavy, it could further tighten pref discounts, creating a potential opportunity to play the compression.

• Fidelity National Information Services, Inc. (FIS) reported mixed results for the third quarter of 2024, demonstrating both strengths and potential challenges in their operations.
• The company experienced a steady growth in adjusted revenue, which increased by 4% year-over-year.
• This growth was primarily driven by an acceleration in recurring revenue across its segments, notably in Banking and Capital Markets, with both segments achieving margin expansion.

• With Trump becoming the next President of the United States, we explain why the rechargeable battery sector in Korea is likely to get further battered in the coming months. 
• Trump administration could eliminate or significantly slash the $7,500 consumer tax credit for electric vehicle (EV) purchases, which is one of the key provisions of the Inflation Reduction Act (IRA).
• We expect the sell-side to further cut their earnings estimates on the key key names in the Korean rechargeable battery sector in the coming months.

• Compal and Nvidia form partnership for AI server collaboration in 2025, expanding capabilities in the tech industry.
• Taiwan’s upcoming AI Basic Act in 2025 prompts consideration of four competing versions, highlighting the significance of AI regulation.
• Foxlink launches Taiwan’s largest AI supercomputing hub for SMEs, showcasing the country’s advancements in technology for small businesses.

• The latest update from United States Cellular Corporation, reflected in their third-quarter 2024 earnings, provides key insights into the company’s current standing and strategic direction.
• Several highlights from the reporting period illustrate a combination of potential opportunities and inherent challenges impacting the company’s operations and future outlook.
• On the positive side, United States Cellular Corporation showed substantial progress in monetizing its spectrum assets, despite the broader market challenges.

• Sales decreased by 6.3% YoY, with operating profit down 24.4% and recurring profit down 55.5% YoY.
• Net income attributable to owners increased 470.0% YoY due to a gain on negative goodwill from Iwatsu Electric acquisition.
• Segment sales varied: Design increased 11.7% YoY, while Others decreased 12.5% YoY with profit down 55.9%.

PVA TePla (PVA) reported a 2.3% y-o-y decrease in sales in Q324 and management has set guidance at the lower end of the range for both sales (€270–90m) and EBITDA (€47–51m). Metrology sales held up nicely in the quarter, while sales in the other activities in the semiconductor division showed a decrease. We have lowered our estimates modestly for both FY24 and FY25 given a more challenging expected market environment in wafer fabrication for the semiconductor industry. On our new estimates, PVA trades at an EV/EBITDA FY25e multiple of 3.7x, which we believe is very undemanding.

• In Q2 FY03/25, revenue was JPY559mn (-12.4% YoY), with a gross profit of JPY156mn (-25.5% YoY).
• Full-year FY03/25 forecast: revenue JPY1.2bn (-7.4% YoY), operating loss JPY605mn, recurring loss JPY592mn, net loss JPY596mn.
• FY03/27 forecast: revenue JPY1.9bn, operating profit JPY7mn, recurring profit JPY4mn, net income JPY0mn.

• SoftBank group (SBG) relies mainly on Arm re-rating further for NAV growth, yet Arm’s valuation already discounts, in our view, much growth potential; SBG and Arm shares are highly correlated
• JPY-USD FX has weakened recently, but the potential for BoJ monetary tightening could reverse this trend impacting SBG, given the high skew of USD assets relative to USD liabilities
• The Vision Funds are hampered by few private company exits; SBG’s NAV discount remains high, but its dependence on Arm is a major risk; we turn negative on SBG

• On 29-October, NEC Corp (6701 JP) announced a low-ball TOB to buy out subsidiary Nec Networks & System Integr (1973 JP). It deserved activism, but finding an activist was tough.
• On 7 November, it got an activist, and I wrote on 8-November the Landscape Had Changed that they might have bought 6mm shares more in 5 days. They bought 8.4mm.
• The Landscape Has FULLY Changed. The details now matter quite a bit. NEC has two basic choices. Neither are that palatable. But Target Advisor DCF was ¥3,073-4,688 without synergies.

• A Democratic Party insider noted some proposals need legal tweaks, so the December 10 deadline may slip, but they’re set on passing the expanded director loyalty duty.
• FKI analyzed top conglomerates’ shareholder structures and found four of the top 10 facing substantial risks.
• We need more clarity before jumping in, but with MBK driving Korea’s hostile M&A scene and the Commercial Act amendments, local chaebols facing control battles are a key KOSPI theme.

• Grab booked an impressive performance in 3Q2024, with strong evidence of its high-value products such as advance bookings gaining traction along with increasing monthly transacting users through its Saver offering. 
• The company’s delivery business benefitted from strong performance from GrabMart and GrabFood. Its Grab Unlimited subscription hit record new highs, with users transacting four times as frequently as non-users.
• Grab also saw a strong performance from GrabFin and its digital banks, which all started lending in November plus rapid deposit growth. Guidance increased reflecting a more positive outlook. 

• After the market close on 14 November, SBI Fintech Solutions announced that the Japanese financial group SBI is pushing for a tender offer and delisting of SBI Fintech Solutions.
• The tender offer price is 5,000 won per share, which is 36% higher than the closing price on 14 November. The tender offer size amount is about 26 billion won.
• Given the relatively solid upside, we believe SBI Holdings is likely to successfully complete this tender offer and take the company private. 

• In Q3 FY24, Appier achieved record-breaking revenue, reaching JPY 9.1 billion, marking a 28% year-over-year growth.
• Operating income for Q3 surged by 2.5 times YoY to JPY 788 million, with the operating margin improving by 4.3 percentage points to 8.7%.
• At less than 4x EV/Sales and 16x FY25 EBITDA the stock does not appear expensive.

• Blackbuck (1355652D IN) is looking to raise about US$130m in its India IPO.
• Zinka Logistics (Blackbuck) is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators transacting on its platform in FY24, as per Redseer.
• Previously, we talked about the company’s historical performance. In this note, we share our quick thoughts on peer comparison and valuation.

• AEM (AEM SP) released 3Q24 numbers and bumped its guidance higher as its key customer pulled forward some orders.
• In 2025 it will be the first year where customers outside of Intel will make up the majority of AEM’s revenues. This is a big milestone for AEM.
• Continued business from Intel and growth in new key accounts means we should expect FY25 revenue growth. Guidance for FY25 will come by February 2025. 

• ASML maintains its 2030 targets: revenue EUR44-60bn, Gross Margin 56-60%. But the narrative has changed, again. In 2022, it was Mature nodes (DUV) and EUV. In 2024, it’s AI. 
• What’s changed? Lower growth in Smartphone, PC, Auto. AI bigger than expected. Server DRAM and HBM is the major positive change. NAND is revised down sharply. It’s actually believable. 
• The guidance implies Operating Profits growing between 9.5-17.5% Cagr over 2024-2030. That’s pretty good but the stock is trading at 27x 2025 EPS, 22x 2026. No room for disappointment. 

• Freee KK (4478 JP) reported 1QFY06/2025 results which saw the company generating its first-ever Adj. operating profit, earlier than we expected.
• The company has begun capitalising its software assets (decline in R&D costs as % of revenue) and this coupled with fall in S&M costs have contributed to profits.
• The corporate paying customers surpassed more than 200k for the first time and we expect freee’s earnings to continue to improve going forward.

• CCC Intelligent Solutions’ third-quarter fiscal 2024 performance highlighted both consistent financial growth and evolving challenges within the insurance and vehicle repair industries.
• The company reported a total revenue of $238 million, reflecting an 8% increase year-over-year, slightly exceeding their guidance range.
• Adjusted EBITDA was $102 million, a 9% improvement from the previous year, supporting a strengthened adjusted EBITDA margin of 43%.

• In 3Q24, game revenue increased by 13% YoY, higher than our estimate, 9% YoY.
• The gross margins of all business lines improve in 3Q24, especially “others”.
• We set the upside at 50% and the price target at HK$605 for the end of 2025. Buy.

• Sea (SE US) ‘s management expects all three business segments – ecommerce, financial services and entertainment – to deliver high growth and profitability in 2025, supported by strong macro-eceonomic tailwind.
• It’s GAAP revenue was US$4.3 billion, up 30.8% year-on-year and net income was US$153.3 million, as compared to total net loss of US$(144.0) million for 3Q2023.
• Its e-commerce business achieved positive adjusted EBITDA in 3Q 2024 in both Asia markets and Brazil.

• Blackbuck (1355652D IN) is looking to raise around US$130m in its India IPO.
• Zinka Logistics (Blackbuck) is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators transacting on its platform in FY24, as per Redseer.
• In this note, we talk about the company’s historical performance.

• ARM reported good numbers with steady guidance for the coming quarter.
• Qualcomm’s earnings performed well, but concerns exist over rising costs and potential loss of customers.
• Uncertainty surrounds US government policies on semiconductor manufacturing and trade with China, impacting industry players like Intel and Nvidia.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• Foxconn’s reforms at Sharp result in significant profit growth in 2Q24.
• Taiwan supply chains brace for impact of Trump’s imminent global tariffs.
• Apple to boost iPhone production in India following Trump victory, taking advantage of evolving global trade dynamics.

• In the 3rd quarter of 2024, revenue was NT$4,284 million, the gross margin (GM) was 55%, the operating profit margin (OPM) was 24%, and the net margin was 15%.  
• The Gen-4 product line is ramping up and is expected to contribute around 4% of total revenue by the end of 2025. 
• Chinese current economic stimulus programs may impact demand in the Consumer segment.  

• Nexon’s 3Q24 earnings report saw its stock dip -17% as revenue missed guidance and foreign exchange losses weighed on the bottom line.
• Nexon’s operating profit rose +11% y/y to ¥51 billion, with an operating margin of 38%
• The stock is trading at 8.5x EBITDA, which makes it very attractive versus the sector

• Vontier Corporation delivered a strong performance in the third quarter of 2024, with notable achievements in sales growth and operational improvements.
• The company reported a 3% increase in core sales, exceeding the high end of their guidance range, indicative of robust momentum across their convenience retail and fueling end markets.
• This success was bolstered by the increased adoption of their market-leading technologies, particularly in the Environmental & Fueling and Mobility Technologies segments.

• Peloton’s earnings for the first quarter of fiscal 2025 demonstrate a balanced perspective of challenges and opportunities as the company maneuvers through a critical phase marked by leadership transitions and strategic realignment.
• The announcement that Peter Stern will assume the role of CEO and President starting January 1, 2025, heralds a potentially transformative phase for Peloton.
• Peter Stern brings substantial experience from previous roles at major corporations, likely setting a strong foundation for leadership and strategic direction.

• In 1H FY03/25, the company reported revenue of JPY1.12tn, operating profit of JPY313.9bn, and net income of JPY243.9bn.
• The revised full-year forecast for FY03/25 includes revenue of JPY2.40tn and operating profit of JPY680.0bn.
• The company announced a JPY70.0bn share buyback plan, acquiring up to 3.5mn shares, representing 0.8% of outstanding shares.

• We’re starting to see some local market players getting ready and setting up trades that bet on a potential split for Samsung Electronics.
• Samsung could leverage the buzz around spinning off its foundry business to split key units—foundry, memory chips, and others—into two or three separate companies at the shareholder meeting.
• Additionally, the valuation gap between Samsung Electronics and Biologics has narrowed more than it has in the last decade, making it an even more attractive opportunity.

• Pony AI (PONY US)  an autonomous mobility solutions provider, is looking to raise up to US$300m in its US IPO. 
• As per Frost & Sullivan, Pony AI was among the first companies in China to obtain licenses to operate fully driverless robotaxis in all four Tier-1 cities in China.
• In this note, we talk about the positive aspects of the deal.

• Horizon Robotics (9660 HK) raised around US$800m, including over-allocation, in its Hong Kong IPO. 
• Horizon Robotics (HR) is a provider of advanced driver assistance systems (ADAS) and autonomous driving (AD) solutions for passenger vehicles, empowered by its proprietary software and hardware technologies.
• We have looked at the company’s past performance and valuations in our previous notes. In this note, we will talk about the trading updates.

• TXN reported 3Q24 last night: EPS 7% above Consensus, small beat. However, 4Q guidance shows a delayed / tepid recovery: revenue to decline -6% YoY, EPS to decline -21% YoY.
• Industrial demand is still declining steeply -23% YoY, “hovering at the bottom”. Auto revenue -2% YoY with growth in China but rest of world is declining. 
• The stock is trading at 31x 2025 and 25x 2026 Consensus EPS, way above its valuations range.

• Global smartphone shipments expected to increase beyond 2025, with OLED technology gaining popularity in tablets and notebooks while Mini LED becomes less preferred.
• Uncertainty over whether Trump will end TSMC’s subsidies for Arizona factory, impacting material suppliers benefiting from TSMC’s growth in 3Q24.
• PSMC chairman shifts from cautious approach towards India to optimism with new partnership with Tata, while Horizon Robotics’ Hong Kong IPO supported by Alibaba, Baidu, and TSMC for manufacturing.

• Pony AI, a founder-led global autonomous driving company, filed for an IPO in the United States and may raise up to $300M on the Nasdaq exchange.  
• The technology company operates fully driverless robotaxis (L4) in Beijing, Shanghai, Guangzhou and Shenzhen, Mainland China.
• Pony AI has raised ~$1.4B in equity financing from top-tier investors, including Toyota Motor, HongShan, IDG Capital, 5Y Capital, ClearVue Partners, and Eight Roads Ventures, among others.

• At first glance, the Shinko Electric Industries (6967 JP) and China TCM merger arb has little or no similarities regarding the region, precondition, sector, type of offeror, or offer structure.
• The aftermath of China Traditional Chinese Medicine (570 HK) has resulted in funds resizing well-held merger arb positions, mainly long-dated names with tail event risks. This has increased the Shinko spread. 
• Shinko’s tail event risk (no SAMR approval) remains low. Timing remains the primary risk, as a delay is possible. At the last close, the gross/annualised spread was 8.9%/29.2%.

• Konica Minolta, a key player in the Japanese office equipment market, presents an attractive investment opportunity, particularly in light of the recent actions by activist investor Effissimo.
• The investment case for Konica Minolta hinges on several factors, including potential structural reforms, M&A activity, and undervaluation.
• Given Effissimo’s track record with Ricoh and the broader industry dynamics, the thesis for a bullish outlook on Konica Minolta is compelling.

• Taiwan Semiconductor Manufacturing Company (TSMC) has reported a robust performance in the third quarter of 2024, underscored by significant revenue growth driven by both smartphone and AI-related demand.
• The company’s industry-leading 3-nanometer and 5-nanometer technologies have been at the forefront of this demand surge.
• Revenue for the third quarter increased sequentially by 12.8% in New Taiwan dollars, reflecting not only strong demand but also higher capacity utilization and cost improvement efforts.

• Considering constructive market dynamics and the recent $SPX breakout above 5783 following several months of consolidation, we upgraded our outlook to bullish as of our 10/15/24 U.S. Macro Vision report
• Since late-July, we have been neutral on the SPX, preferring to buy near 5100-5200 support and sell near 5670-5783 resistance until there is a break in either direction.
• The verdict of the market is the only one that matters, and the breakout above 5783 is the market’s way of saying the path of least resistance is higher.

• Foxconn is expanding its SDV development efforts to further the advancement of smart car technology.
• Intel is seeking collaboration with Samsung to better compete with TSMC in the competitive foundry market.
• Nvidia is collaborating with Indian partners to develop a custom chip for the Indian market, while Xiaomi launches China’s first 3nm SoC.

• The Board will likely recommend the 100p/share cash offer (8.0x EV/NTM EBITDA) pending final terms. General Atlantic must make a formal offer by October 25, with potential deadline extensions.
• Shareholders would have the option to elect for an unlisted equity alternative. This means that top two shareholders (24%) will continue invested and that chances of a sweetening seem slim.
• Given LTG’s share performance, shareholders may willing to accept a 33.5% premium. Gross spread is 6.6% (39.4% estimated annual return if settlement by January 6). Long.

• ASML Holding N.V. reported its financial results for the third quarter of 2024, highlighting both achievements and challenges.
• The company recorded total net sales of EUR 7.5 billion, surpassing its own guidance, largely due to increased sales of deep ultraviolet (deep UV) systems and heightened Installed Base Management sales.
• Net income for the quarter was EUR 2.1 billion, representing 27.8% of total net sales, with an EPS of EUR 5.28.

• On 11-Oct, Bain submitted a binding proposal for Fuji Soft Inc (9749 JP). On 15-Oct, FSI acknowledged, but questioned the Nozawa family commitment.  Founder Nozawa wrote letters the 17th.
• O 18-Oct, FSI reiterated support for the KKR First Tender in a late night drop. It included fine print, but no media coverage. Today, FSI filed a Target Opinion Amendment.
• That filing included yet more fine print not in the public filing Friday. And KKR extended. The new fine print is nuanced. But worth reading.

• Over the last few days, Shinko Electric Industries (6967 JP) shares have dipped lower than the previous standard trading range. 
• I expect this weakness is related to investors in other deals deciding to sell this deal too. I believe it is not related to Shinko specifically.
• For that, while gap risk remains somewhat high, I still see break risk as low and see this as a great opportunity to buy the dip.

• Horizon Robotics (9660 HK), a provider of autonomous driving products and services, is seeking to raise up to US$696 million through a HKEx IPO.
• We previously discussed the IPO in Horizon Robotics (9660 HK) IPO: The Bull Case and Horizon Robotics (9660 HK) IPO: The Bear Case. 
• Our valuation analysis suggests that Horizon is unattractively valued at the IPO price range. Therefore, we would pass on the IPO.

• International Games System (3293 TT) could be added to a global index at the end of November and there will be a lot of buying in the stock.
• The big rally in the stock has led to International Games System (3293 TT) trading expensive to its regional peers.
• There has been an increase in cumulative excess volume over the last month. But there could still be more to go over the next week.

• nCino has posted its financial results for the second quarter of fiscal year 2025, delivering performance that exceeded initial forecasts in several key areas, including subscription revenues and non-GAAP operating income.
• The company has observed a notable improvement in the financial services industry in the United States compared to the previous year.
• nCino’s growth in the U.S. has been robust, particularly within its existing customer base which seems keen on leveraging the company’s expanded platform capabilities.

• IRDM started 2024 with changes to its reporting metrics and that trend continued when with Q3. 
• When IRDM reported third quarter 2024 results, the Company disclosed it would experience a decline in reported IOT subscriber metrics.   
• The change subscriber count would not impact IRDM’s revenue due to contract pricing. It could create negative headwind in 2025

• Marathon Holdings’s second quarter of 2024 brought both the continuation of bold initiatives and a renewal of challenges marked by increased operational expenses and pressure on profitability.
• The company underlined its commitment to expanding operations and scaling infrastructure, leading to notable achievements such as strategic acquisitions and technological advancements.
• Noteworthy is the growth in the company’s hash rate and the acquisition of the Garden City data center, which collectively aim to steer Marathon Holdings towards reaching an operational hash rate of 50 exahash by year-end.

• Southern Taiwan Science Park’s output value is projected to hit a new high in 2024, indicating growth in the technology sector of Taiwan.
• Taiwan is looking for global solutions to tackle its green energy deficit, highlighting the government’s efforts to promote renewable energy sources.
• Chinese security measures impact tech giants like Micron, Intel, and Tesla, while Samsung resolves labor dispute in India and adjusts HBM production target.

• Wix, the leading platform enabling users and businesses to create and manage online presence, has reported its second quarter results for the financial year 2024, showcasing considerable financial and strategic achievements, along with disclosing its enhanced focus on AI and commerce capabilities to bolster growth.
• The company’s revenue growth stood at 12%, hitting $436 million, and bookings observed a 15% year-over-year increase, reaching $458 million.
• This bookings growth is an acceleration from the 10% seen in Q1, indicating a strengthening demand for Wix’s offerings.

• Haivision Systems Inc. is a publicly traded company with a current stock price of CAD 4.20, but analysts believe it is worth at least CAD 7.60
• The company has seen strong sales growth and high gross margins in recent years, and is debt-free
• Haivision competes with larger companies like Evertz and EVS Broadcast Equipment in the video solutions market for live broadcasts, making it an attractive investment opportunity for smaller capital pools.

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 Fuji Soft Inc (9749 JP) Board has maintained its recommendation of KKR’s first-stage tender offer. However, the recommendation was not unanimous, with four dissenting directors. 
• Bain’s likely next move is to waive the precondition and launch its offer. To bring KKR to the negotiating table, Bain will want to acquire as many shares as possible. 
• KKR’s first stage closes on 21 October. Success requires KKR to either work with Bain or match terms. As shares trade through Bain’s terms, there is little or no upside. 

• With over 95% of the review period complete, 4 non-constituents are in inclusion zone and 6 constituents are in deletion zone.
• We estimate one-way turnover of 6.5% at the December rebalance leading to a one-way trade of CNY 11.95bn (US$1.7bn). Index arb balances could increase the impact on the stocks.
• The potential adds have continued to outperform the potential deletes. There has been a big jump in the last few weeks as markets have rallied. Trim positions into strength.

• TSMC: +18.7% Premium; Trading Range Sustaining at an Elevated Level
• UMC: -1.8% Discount; Good Level to Go Long the Spread
• ASE: 0.0% Premium; Good Level to Go Long the Spread

• On Tuesday, Fuji Soft Inc (9749 JP) said they had received the legally-binding Bain proposal on 11 October, but noted they could not confirm founder Nozawa-san’s agreement or intentions.
• Founder Nozawa Hiroshi responded with a pair of impassioned letters Thursday criticising process, asking Fuji Soft to withdraw support for KKR, and switch to or allow the Bain Offer.
• Fuji Soft on Friday reiterated support for the KKR First Tender, but interestingly, saw a majority resolve to suggest common shareholders NOT tender because of the optionality.

• I  tally 44 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• One new deals discussed this week: Bossini International (592 HK) low-balled scrip Offer from Viva Goods (933 HK). Beijing Capital Grand (1329 HK) also suspended due to the Takeovers code. 
• Key updates took place on: GJS (2611 HK)/Haitong Securities (600837 CH), Fuji Soft Inc (9749 JP), Hotel Property Investments (HPI AU), TCM (570 HK) and Dyna Mac Holdings (DMHL SP) 

• Horizon Robotics (9660 HK), a provider of autonomous driving products and services, is seeking to raise up to US$696 million through a HKEx IPO.
• In Horizon Robotics (9660 HK) IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on high related parties’ revenue, customer concentration risk, pricing pressure, uncertain path to profitability, high cash conversion cycle and FCF burn.

• Allegro MicroSystems presented their first fiscal quarter 2025 results, positioning themselves within a competitive and challenging market environment.
• Positive indicators can be discerned from their performance, although there remain areas of concern which reflect broader market conditions and segment-specific issues.
• Starting with the positives, Allegro MicroSystems reported first-quarter sales of $167 million, which was above the midpoint of their guidance.

• This past week saw mainland investors trade HK$476bn of stock. Not as big as last “week” but still big. BABA buying has slowed, but net buying was still HK$24.4bn 
• The buying is starting to see a longer tail of net positive names, and properties this week saw big net buying, even before the Sunac placement which added more.
• High-Div SOEs are seeing outflows as beta sees inflows. I expect this to continue.

• Blackbaud, Inc. reported a strong second quarter in 2024, showing significant improvement in various financial metrics and advancing its strategic initiatives.
• The company, a leading provider of software to power social impact, has focused on product innovation tailored for non-profit organizations while implementing crucial revenue initiatives and maintaining careful attention to cost management and cash flow enhancement.
• 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.

• Tenable’s Q2 2024 earnings report presents a mixed picture, with various strengths and areas of concern that are pivotal for investors to consider.
• The company, a notable player in the cybersecurity space, reported revenues and earnings that surpassed expectations, but encountered headwinds with calculated current billings (CCB), which fell short of projected figures.
• This discrepancy signals a challenging selling environment and prompts a cautious outlook for the rest of the year.

• Teradata’s second quarter earnings for the 2024 fiscal year demonstrated a mixed performance in a challenging macroeconomic environment.
• On the positive side, Teradata highlighted significant growth in its cloud-based analytics revenue, which grew by 32% in constant currency.
• The company also mentioned a strong cloud net expansion rate of 123%, indicating robust customer expansions within its cloud segment.

• Viavi Solutions reported its fourth quarter and full year results for fiscal 2024, showcasing varied performance across its different segments.
• For the fourth quarter, the company posted net revenue of $252 million, at the midpoint of its guidance range of $246 million to $258 million and reflected a 2.4% sequential increase but a 4.4% decline year-over-year.
• The full-year revenue stood at $1 billion, marking a 9.6% decline year-over-year, influenced predominantly by subdued spending from service providers and Network Equipment Manufacturers (NEMs).

• Vontier Corporation, in its recent earnings call for the second quarter of 2024, presented a mixed financial performance impacted by several external factors.
• The company reported a core decline in sales by approximately 3%, primarily due to delays in customer projects and discretionary spending which affected orders and shipments towards the end of the quarter.
• These delays were noted across Vontier’s Environmental & Fueling Solutions segment and Alternative Energy business, significantly impacting the quarter’s results.