TMT/Internet

• This event drew significant attention, causing unusual price action. From Sept 20 to Nov 29, corrections in the deletions far outpaced the KOSPI, with the trend holding across key checkpoints.
• We’re watching 4 stocks: Kumho Petro, Lotte Chemical, Posco DX, and EcoPro Materials. SK Bioscience and Enchem are close, with small price moves likely pushing them out.
• Based on past rebalancing patterns, proactive positions on these names could trigger strong price action. All except Enchem have listed futures and solid volume, making trading conditions favorable.

• There are 8 changes a side for the TIP Customized Taiwan Select High Dividend Index in December. The TIP Taiwan Select High Dividend ETF (00919TW) has an AUM of US$9.3bn.
• Estimated one-way turnover is 17.2% and that will result in a round-trip trade of US$3.2bn. All adds and deletes have over 5x ADV to trade from passive trackers.
• The rebalance will be implemented over 8 trading days and the ETF started trading some stocks late last week and the rest from 17 December.

• Bitcoin has reached a new all-time high, surpassing $107,000 and steadily moving toward $110,000, as we predicted in Crypto Moves #55.
• That note remains highly relevant.
• Among the three most notable developments of the past week, MicroStrategy has been “QQQ’d.” Find out what that entails below, along with the other two standout pieces of news and the key charts shaping the market as we head into one of the last weeks of 2024.

• Our outlook remains bullish and we see the market in the midst of a significant end-of-year rally that we have been expecting since mid-October.
• We continue to expect support at 20-day MAs on $SPX and Nasdaq 100 (QQQ), while support at current levels or the 50-day MA is likely on the Russell 2000 (IWM).
• Market dynamics continue to improve, giving us confidence that this bull run is likely to go at least another month into mid-January, and quite likely beyond.

• The IT service market in Korea is estimated to be 51.5 trillion won in 2023 and it is expected to growth at a CAGR of 9.4% from 2023 to 2028.
• The Cloud & AI market is expected to grow at an annual rate of 10.5% from 32.7 trillion won in 2023 to 53.8 trillion won in 2028.
• LG CNS had about 8.9% share in the IT services market in Korea in 2023.

• TSM is upbeat on the AI demand and remains confident that the cycle has just begun with long a runway for growth ahead.
• TSM’s primary competitors, Intel and Samsung Electronics, are currently facing challenges within their foundry operations, placing TSM in a favorable position to expand its market share
• The Company anticipates a strong closing for FY:24 and has guided for nearly 35% YOY revenue growth in Q4 2024. We believe the momentum will continue in 2024E-2026E.

• ATNI, a telecom company, has been overlooked due to industry setbacks
• Company’s businesses are healthy and poised for growth in revenue and EBITDA in 2025 and beyond
• Expected free cash flow inflection point could lead to increased dividends, stock repurchases, and debt reduction, potentially doubling stock value in two years based on projected 2026 estimates

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.

• LG CNS (LGCNSZ KS) is looking to raise around US$850m in its upcoming Korea IPO.
• LG CNS is a South Korean information technology company. The firm primarily provides comprehensive digital transformation services and solutions backed AI, big data, and cloud.
• In a previous note, we looked at the firm’s past performance. In this note, we undertake a peer comparison.

• German government approves financing for TSMC’s fab in Dresden, boosting semiconductor production in Europe.
• Kaynes Semi secures anchor customer in power electronics, bolstering its position in the market.
• Suchi Semicon opens Gujarat’s first OSAT facility; Google appoints new India head to advance AI technology.

• Since mid-November, share-price spreads have generally widened across European liquid universe of ordinary and preferred shares (10 have widened, 8 tightened, 1 unchanged) with few changes in the trends.
• The most notorious reversal has been Telecom Italia. Recommended trades long preferred / short ordinary shares: Atlas Copco, Grifols SA, Media-for-Europe.
• Recommended trades long ordinary / short preferred shares: Carlsberg, Henkel, SSAB Svenska Stal, Telecom Italia.

• Constituent changes to the S&P 500 INDEX and capping changes will result in a round-trip trade of US$17.7bn across the Select Sector indices and the S&P500 Equal Weight Index.
• There is over US$500m to trade in Broadcom (AVGO US), Tesla (TSLA US), Apollo Global Management (APO US), Amazon.com Inc (AMZN US) and Workday Inc Class A (WDAY US). 
• Broadcom (AVGO US) swings from a small net buy to a large net sell following the rally in the stock last week.

• We see 32 potential and close adds and 44 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.
• We expect 29 stocks to be added to Southbound Stock Connect following the rebalance while 31 stocks could be deleted from the trading link and become Sell-only.
• There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.

• BYD Electronics benefits from two key growth drivers in 2025: a cyclical upswing in its legacy EMS business, and sustained strong growth in auto electronics and AI data cooling devices.
• Earnings momentum is expected to pick up in 4Q, with key segments entering an earning upcycle. Expect bottomline growth to accelerate to 45% in 2025 from 9% in 2024.
• The 13x 2025 PE multiple does not capture BYDE’s transformation from a low-end, cyclical EMS to a leading high-precision manufacturer with a more diverse and balanced set of growth drivers.

• Top Ten most active contracts for the week all traded on Monday. Most of the active contracts were Calls with December expiries.
• Xiaomi Corp (1810 HK) makes the Top Ten non-Tencent most active contracts with both Puts and Call active – likely stock replacement and hedges following torrid run higher.
• Tencent implied vols trading at their lowest levels of the past year.

• NEV retail volume increased by 51% YoY in November and 41% YoY for first eleven months.
• Jiyue Auto, as a car maker subsidiary of Baidu, is dismissing employees.
• Hisense, a home appliance producer, lays off 30,000 employees of its total 110,000.

• In this insight, we provide a list of 70 prominent companies in the USA, Europe, and the Middle East that could complete their IPOs in 2025.
• This is a comprehensive, REFERENCE GUIDE to help clients so that they could get a broad view of the major IPOs that could get completed in these regions in 2025.
• Some of the most prominent potential IPOs in these regions next year include Starlink, SpaceX, Stripe, Open AI, Klarna, Five Holdings, Monzo, and Ethiad Airways.

• Alphabet (NASDAQ: GOOGL) has been consistently undervalued in the market despite strong revenue and earnings growth
• The company’s average forward P/E multiple over the past 15+ years has been just 21.7x, even though it has consistently outperformed the S&P 500
• Currently trading at a discounted valuation of around 17x 2025E EPS, Alphabet has been mispriced for most of its 20-year history

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.

• UiPath reported its financial results for the third quarter of fiscal 2025, surpassing its guidance on all crucial financial metrics.
• The company concluded the quarter with an Annual Recurring Revenue (ARR) of $1.607 billion, marking a 17% increase driven by a net new ARR of $56 million.
• Quarterly revenue reached $355 million, and the company achieved a non-GAAP operating income of $50 million.

• Following on from our previous note, we now identify inexpensive consistent compounders from the small and mid-cap universe in Asia ($1 – $5 bn in market capitalization).
• 28 stocks are on our list – 18 from onshore China, 5 from India, 2 each from Japan and Taiwan and 1 from Hong Kong.
• Industrials, technology, healthcare and financials dominate the list. The list of large and mid-cap compounders shall largely form the backbone of our top stock choices for 2025.

• A conversation with Indosat (ISAT IJ) managment revealed a stabilisation in the pricing environment following Telkomsel’s recent data price hikes and a more positive outlook for 2025 with market consolidation. 
• 2025 will see the four-player market move to a three-player market which should be positive for data pricing following the XL/FREN merger, with ex-Java expansion also potentially boosting ISAT ARPUs. 
• Indosat‘s move into the AI sphere through its exclusivity in providing NVIDIA Corp‘s GPUs in Indonesia should be an additional growth driver in 2025. Valuation remains appealing.

• There are no constituent changes for the VanEck Vectors Semiconductor (SMH US) ETF in December but there are a lot of float and capping changes.
• Estimated one-way turnover is 4.5% resulting in a one-way trade of US$1.1bn. Impact on the stocks is not big given they trade like water.
• The selling in Broadcom and NVIDIA will be amplified by selling from the Technology Select Sector SPDR (XLK US) and Invesco S&P 500 Equal Weight E (RSP US) ETFs. 

• The MV US Listed Semiconductor 25 index represents the performance of the biggest US-listed companies in the semiconductor industry.
• There will be no index changes for the December 2024 rebal event.
• We expect a one-way flow of US$1.3bn for December 2024, which translates to a turnover of 5.4%.

• LG CNS (LGCNSZ KS), the IT service unit of LG Corp (003550 KS), seeks to raise up to US$837 million through a primary/secondary offering.   
• In 2020, Macquarie Asset Management bought a 35% stake from LG Corp for KRW950 billion, beating KKR & Co (KKR US), the other shortlisted bidder.
• The bull case rests on an attractive market, improving visibility, strong AI-led growth, below-peer average dependence on related parties, and top-tier profitability. 

• This Insight analyzes Hang Seng Index (HSI INDEX) tailor-made option strategies traded between December 9-13, covering strategy analysis, trends, highlights, and volatility context.
• Last week saw high activity with over 5,000 option contracts traded as combinations; the Iron Condor was notably popular, particularly on Monday and Tuesday.
• The highest premium earned was for a January ’25 Iron Condor. The largest trade was a December ’24 Bull Call Spread, reflecting the popularity of bullish and long volatility strategies.

• Shenzhen Dobot, a CICC-backed robotics unicorn, aims to raise up to HK$830M (~$107M) in the initial public offering in Hong Kong.
• The offering is expected to be between HK$18.80 and HK$20.80, implying a market cap of ~HK$8B or ~$1B at the midpoint of the price range.  
• Given Shenzhen Dobot’s long-term growth opportunities and high TAM, they are likely to get a premium valuation, and the company could trade like UBTech Robotics and Doosan Robotics.

• Laser focus, transparency and adoption of a “say do” approach to measuring success are now the order of the day at Intel
• Data Center roadmap not in good shape and if IFS can’t deliver, MJ won’t hesitate to outsource DC products to TSMC alongside existing Client products.
• Gaudi is not a mass market product, Falcon Shores won’t be great either but we will listen, learn, iterate and fail quickly. Watch out NVIDIA !

• Lots of Jobs eliminated by Large Tech firms. Stable Mediatek-Qualcomm market share in Mobile. Foundry Top-10: 5-4-3nm still booming, Mature nodes still lagging.
• Samsung multiple troubles. HBM3e still not qualified, losing iPhone OLED share, US CHIPS Act subsidies gone, Exynos 2500 delayed, Smartphone forecasts lower  
• Intel new CEOs admit they don’t have an AI roadmap – Gaudi 3 failed, next-gen Falcon Shores is a learning opportunity… but 18A process on track (for 2027?).

• TSMC: 22.7% Premium; Good Level to Short the Spread Given Historical Trading Range
• UMC: +0.2% Premium; Middle of Historical Trading Range; Short Interest Rises to New High
• CHT: +0.5% Premium; Major Spike in Short Interest for the Local Taiwan Shares

• Apple’s 2nm Power Move with TSMC — Beating Samsung Yet Again
• Why TSMC’s 2nm Will be Huge — Extending Tech Lead vs. Samsung & Major AI/Power Consumption Benefits for Customers
• The Memory Decoupling Trade is Working — Nanya Tech Underperforms SK Hynix

• We anticipate Taiwan Semiconductor (TSMC) – ADR (TSM US) can achieve a 25% growth in 2025.  
• It is unsurprising for TSMC to dominate in AI, including the assembly and testing segments.  
• Chinese companies are also involved in AI, but there hasn’t been a recent spread as a result of U.S. sanctions.  

• Alphabet Inc., the parent company of Google, has long been a dominant force in the tech world, leveraging its search, cloud, and AI capabilities.
• Recent announcements, including the development of its custom quantum computing chip “Willow,” the launch of Gemini 2.0 AI models, and its partnership with Samsung for mixed-reality headsets, have spurred investor optimism.
• These developments come against the backdrop of an earnings call highlighting impressive revenue growth and expanding AI applications across search, cloud services, and autonomous driving.

• The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
• In this insight, we take a look at the rankings of potential ADDs and potential DELs for the March 2025 index rebal event.
• Based on the latest available data, we see four ADDs and four DELs for HSIII in March 2025.

• Nec Networks (1973 JP)‘s own FA didn’t include any measure of transaction synergies to be created about which NEC and NESIC were so sure. This is not being done right.
• Singapore Post (SPOST SP)‘s muted price action after announcing the ~S$900mn FMH sale is illustrative. But expect more value to be unlocked from divesting non-core ops going forward. 
• The FTC’ blocking the giant grocery merger of Kroger Co (KR US) and Albertsons Cos (ACI US) spells trouble for ACT and Seven & I Holdings (3382 JP).

• I tally 51 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Five new deals this week: Insignia Financial (IFL AU), Fosun Tourism (1992 HK), and Lifestyle China (2136 HK). VCredit Holdings (2003 HK) and Vesync (2148 HK) also in the crosshairs. 
• Key updates/news took place on: Guotai Junan Securities (2611 HK)/Haitong Securities Co Ltd (H) (6837 HK), Fuji Soft Inc (9749 JP), CPMC Holdings (906 HK), and Dexus Property (DXS AU) 

• GitLab’s recent quarterly results reveal a complex, yet promising landscape for the company.
• GitLab reported arevenue increase of 31% year-over-year, reaching $196 million for the third quarter of fiscal year 2025.
• The company exceeded profitability guidance with a non-GAAP operating margin of 13.2%, up more than 1,000 basis points from the prior year.

• Guidewire Software’s recent earnings for the first fiscal quarter of 2025 provides insightful details on the company’s strategic initiatives and financial performance.
• The company reported a strong start to the fiscal year, emphasizing momentum in cloud adoption and strategic international growth.
• On the positive side, Guidewire Software demonstrated robust performance with total revenue reaching $263 million, marking a 27% year-over-year increase.

• Hewlett Packard Enterprise’s fiscal fourth quarter results for 2024 demonstrated a robust performance, highlighted by record quarterly revenue of $8.5 billion, marking a 15% year-over-year increase.
• This growth was driven largely by the continued success of HPE GreenLake and a notable acceleration in AI system revenues.
• The company’s results surpassed expectations across key financial metrics, including revenue, diluted net earnings per share, and free cash flow.

• Onto Innovation reported its third-quarter financial results for 2024, demonstrating several strengths and challenges that inform its investment outlook.
• The company achieved a revenue of $252 million, marking a 4% sequential increase and a 22% rise year-over-year.
• This performance set a new quarterly record for inspection revenue, indicating robust demand within its specialty device and advanced packaging segments.

• Samsara Inc. reported strong financial and operational performance in the third quarter of fiscal 2025, highlighting its continued growth and strategic advancements in a dynamic market.
• Samsara ended the quarter with an annualized recurring revenue (ARR) of $1.35 billion, representing a 35% year-over-year growth, and achieved a record 10% adjusted free cash flow margin.
• The growth in ARR was driven by signing high-profile clients across various sectors, including significant deals with companies like Papa John’s and Fortune 500 firms, indicating Samsara’s ability to attract large, complex organizations seeking digital transformation of physical operations.

• Sprinklr, a company focused on a unified AI-powered customer experience management platform, reported its Q3 fiscal year 2025 financial results, providing insights into its current operational status and future strategies.
• The company achieved a total revenue of $200.7 million for the quarter, marking an 8% year-over-year growth, while subscription revenue grew by 6% year-over-year to $180.6 million.
• However, professional services revenue disappointed with a gross margin of negative 8%.

• ~4 weeks ago, Fuji Soft Inc (9749 JP) responded to Bain’s Proposal to take over the company but got KKR to bid ¥1 more, then said that covered it.
• The Special Committee then asked the FSI Board to halt further negotiations with Bain, and to ask Bain to destroy all confidential documentation. 
• Bain rejected saying it contravened METI Guidelines on Corporate Takeovers and reappeared 2 days ago with a ¥9,600 bid. The structure/details of Bain’s bid was probably a strategy mistake.

• ServiceTitan, a provider of field service management software for home service businesses, priced its IPO at $71.00/share and raised ~$625M.  
• ServiceTitan IPO has seen robust demand among institutional investors. The company boosted its initial price range to $65.00 to $67.00 per share.
• The offering was priced above the price range, valuing ServiceTitan at ~$6.5B. The stock jumped ~42% on first day as a public company and closed at $101.00 on Thursday.

• Nvidia Corp. on Tuesday asserted its commitment to fair competition, after China’s market regulators opened an antitrust investigation into the U.S. chip giant over suspected violations linked to a 2020 deal.
• The probe, announced on Monday by the State Administration for Market Regulation (SAMR), concerns Nvidia’s compliance with the country’s Anti-Monopoly Law and conditions tied to its $6.9 billion acquisition of Israeli network-equipment maker Mellanox Technologies Ltd.
• The deal — the largest acquisition Nvidia has ever made — faced intense scrutiny from Chinese regulators, who conditionally approved it after nearly a year-long process.

• Samsung Display appoints new VP to lead strategic product realignment, driving focus on key areas.
• BYD expands EV production in Europe, while Gotion aims for battery growth in Morocco and Slovakia.
• Google unveils Gemini 2.0 and next-gen TPU Trillium, ushering in the era of AI agents; Morris Chang shares insights on Intel’s leadership crisis. Samsung shifts 2,000 engineers to Pyeongtaek to tackle HBM hurdles.

• Although the outlook for 1Q25 might be somewhat negative, we believe that it is a reasonably typical result.
• We understand that MediaTek did not succeed in qualifying its Apple iPad and iWatch CPUs originally, but we believe it is now preparing for a re-qualification process.
• Looking ahead to 2025, we anticipate a more favorable outlook for MediaTek.

• Yesterday, NEC Corp (6701 JP) extended its Tender Offer to buy controlled subsidiary Nec Networks & System Integr (1973 JP) for another 10 days. It did not have enough shares.
• As discussed here 4wks ago, then here yesterday, NEC might not get enough shares unless it offers a higher price. There’s a reason. It is not a high enough price. 
• METI Fair M&A Guidelines and Guidelines for Corporate Takeovers define fair. Guarantees of a floor price and a fair allocation of synergies. One is questionable. The other is not there.

• Mike Green explains how leveraged products on MSTR resemble a short straddle in their rebalancing requirements
• The two times leveraged long products, MSTU and MSTX, are unique due to their large size and underlying asset volatility, creating potential volume amplifying feedback loops
• The leveraged complex has contributed to the large premium of MSTR to the value of its bitcoin holdings, impacting ETFs forced to use options market due to limited leverage from swap providers

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

• LG CNS (LGCNSZ KS) is looking to raise around US$850m in its upcoming Korea IPO. 
• LG CNS is a South Korean information technology company. The firm primarily provides comprehensive digital transformation services and solutions backed AI, big data, and cloud.
• In this note, we look at the firm’s past performance.

• Novanta Inc.’s third quarter of 2024 results reflect a mixed performance driven by a challenging macroeconomic environment, customer-related timing issues, and some positive business developments.
• The company reported revenue of $244 million, an increase of 10% year-over-year, though organic growth was flat.
• Adjusted gross margins were 46%, a slight decline from the previous year due to the dilution from the Motion Solutions acquisition, although core business margins improved by 70 basis points.

• BlackLine’s recent quarterly performance showcases a mix of both robust achievements and ongoing strategic challenges.
• The company, co-led by Owen Ryan and Therese Tucker, has demonstrated its ability to exceed revenue and profitability targets, reflecting effective strategic execution.
• A significant achievement this quarter was the record free cash flow generation, indicating strong financial health and potential for reinvestment in growth initiatives.

• Mediatek’s Apple Watch Win Highlights Smartwatch Market Opportunity; Breakthrough Into Apple’s Supply Chain
• MediaTek’s Role in Apple Watch Connectivity; Mediatek’s TSMC Relationship to Provide a Lasting Advantage
• Mediatek Rallied But Remains Below Highs; Significant Upside Remains — Maintain Structural Long

• NVIDIA Corporation, the global AI and semiconductor powerhouse, has found itself in the crosshairs of China’s antitrust regulators.
• Amid an escalating tech war between the U.S. and China, Beijing’s State Administration for Market Regulation has launched an investigation into NVIDIA’s compliance with antimonopoly laws concerning its $6.9 billion acquisition of Mellanox Technologies in 2020.
• This probe comes on the heels of the U.S. imposing stricter export controls on advanced semiconductor technologies, further intensifying the global tech rivalry.

• Interview with Michael Dell, founder of Dell Technologies, discussing his journey and insights in the tech industry
• Dell started his tech career at a young age, working in a Chinese restaurant and later upgrading computers
• Dell shares his thoughts on entrepreneurship, technology development, and the future impact of AI in various industries

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

• US increases tariffs on tungsten, wafers, and polysilicon in Section 301 Trade Action against China by Trade Representative, impacting global trade.
• Challenges facing semiconductor industry highlighted by Intel and Microchip cases under CHIPS Act, affecting technological development.
• Apple and Broadcom collaborate on custom AI chip, enhancing ASIC capabilities, while Tesla resumes search for showrooms in India. Xiaomi aims for premium market in India as smartphone sales slow.

• GlobalFoundries’ third-quarter fiscal year 2024 results provide a comprehensive overview of its financial performance and strategic initiatives.
• The company reported revenue of $1.739 billion for the quarter, reflecting a 7% sequential growth, albeit a 6% decline year-over-year.
• This revenue growth is commendable given the challenging industry conditions with lower factory utilization levels around mid-70s.

• Two days before the close of its TOB on subsidiary Nec Networks & System Integr (1973 JP), NEC Corp (6701 JP) announced it had no plans to raise the price. 
• The next day, the second largest shareholder reported a stake increase from 11.68% to 13.12%. That changes the dynamic further, and a change in terms was likely. 
• Today post-close, NEC extended the Tender Offer by 10 days. It is worthwhile understanding the likely current disposition of shares. 

• Topcon Corp (7732 JP) shares rose 51% over two days, confirming a Bloomberg report that is conducting a privatisation auction. The process is in the second round of bids.
• Exploring the privatisation process is unsurprising, as Topcon has materially underperformed the Nikkei 225 since its last medium-term management term plan was announced on 12 May 2023.
• Despite the share price pop, Topcon trades at a discount to median peer multiples. At an offer of JPY3,000, Topcon would trade in line with median peer multiples.

• The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
• In this insight, we take a look at the rankings of potential ADDs and potential DELs for the March 2025 index rebal event.
• We see two index changes based on the latest available data. However, the reference period is not complete which means our expectations can change over the next few weeks.

• The battle for Fuji Soft Inc. (9749 JP) took an unexpected turn. Bain revised its offer to JPY9,600, a 1.6% premium to KKR’s JPY9,451 second tender offer. 
• Bain has introduced a minimum number of shares to be purchased criterion. Bain’s offer is structured to address most but not all of the special committee’s reasons for opposition.
• The Board’s first reaction will be to ask KKR, its preferred bidder, to bump. Given the amount of time and effort KKR has put into this bid, it will bump. 

• Palantir Technologies (PLTR US) is anticipated to be the largest addition following its eligibility, which was secured through a listing transfer from NYSE to Nasdaq just before the cut-off date.
• Super Micro Computer (SMCI US) is projected to exit the index despite its recent entry in July 2024, as it has ranked above the exit threshold of 125.
• ARM Holdings (ARM US) is not an expected deletion due to special ADR market cap treatment. Equinix Inc (EQIX US) is not an expected addition because it is a REIT.

• This is our 10th “Annual Edition of the Major Korean IPOs Pipeline Preview” at Smartkarma.
• This insight will feature 50 of the biggest potential IPOs in Korea in 2025.
• These 50 IPOs in Korea are likely to represent more than 80% of all capital raised through IPOs in Korea next year.

• AMD’s Lisa Su has been honoured as Time’s CEO of the year, a fitting tribute to a leader who  pulled off what many thought to be impossible
• Despite flawless execution and carving out a brand new $5 billion market segment within AI Acceleration, AMD’s share prices is down 44% from its 52 week high
• AMD will ultimately face headwinds from Arm but, for the time being, their growth will come from continuing to take market share from Intel and building on their Instinct platform 

• ISU Petasys is betting the FSS chief, tied to the current administration, won’t have much market power due to the impeachment drama—and that gamble looks likely to pay off.
• ISU Petasys’ rights offering still offers solid trade potential, with 97% stockholder allocation and only 21% from the major shareholder, increasing the chance of significant unclaimed shares hitting the market.
• Our plan is to grab stock rights cheap, ride the 15% discount, and capitalize on stock pullbacks, though lack of futures limits short hedging. Still, an unhedged setup looks promising.

• BCG is a dominant operator of online classified assets in Lithuania and Estonia, with potential expansion into Latvia
• Despite being in the early stages of monetization, BCG shows strong earnings growth potential and appeals to private equity buyers
• BCG’s focus on generalist and vertical classifieds, with various monetization strategies, positions them well for continued growth and success

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.

• Raksul operates niche B2B online marketplaces in Japan with exceptional shareholder alignment
• Recent dip in stock value due to market trends, but shows promise for 2-4x returns in next two years
• Unique approach to collecting tolls on indirect costs for SMEs in Japan sets them apart in the industry

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.

• A Bloomberg article today said Topcon Corp (7732 JP) is weighing takeover bids received from KKR and EQT. ValueAct has been pressuring the company for 18mos (5+% in May23)
• ValueAct has apparently been pushing the company to divest assets and concentrate on core ops, or go private (and have someone else do it). 
• This is further evidence of the METI-enabled “Bad Cop-Good Cop Routine” which could expand M&A and governance activity dramatically. 

• Talabat Holding (TALABAT UH) is expected to be listed on 10 December 2024, on the Dubai Financial Market at a valuation of ~$10.3bn.
• Fast-Entry is forecasted to be announced for the one Global Index at the close of 10 December and traded on 20 December in conjunction with the review.
• Uncertainty regarding the Fast-Entry arises due to lack of shareholder information in the Institutional Offering which can result in the float market cap being determined as invalid.

• According to our valuation analysis, it suggests a base case implied market cap of 7.9 trillion won for LG CNS, representing target price of 81,095 won per share.
• Therefore, our base case valuation target price of 81,095 won is 31% higher than the high end of the IPO price range.
• We estimate LG CNS to generate sales of 5.99 trillion won (up 6.8% YoY) and net profit of 356.1 billion won (up 7.1% YoY) in 2024.

• Consistent compounders, stocks with steady earnings growth and excess returns over a long period of time, are difficult to find. It’s even more difficult to find reasonably valued compounders.
• From the universe of large Asian companies, we screen those with steady profit growth (>10%) and excess returns in each of last 10 years and over next three forecast years.
• Our list of 20 inexpensive compounders comprises 10 from onshore China, 5 from HK, 3 from India and 1 each from Japan and the Philippines.

• The Semiconductor industry associations report re-accelerating Semi sales, and increase 2024-25 forecasts. This is due to higher AI / Accelerators, HBM Memory but the rest of the market remains sluggish
• TSMC remains on its high growth plateau at 34% YoY, driven by AI and 3nm. UMC remains on a sluggish recovery at 7% YoY.
• AMD, Nvidia, SK Hynix, TSMC: stocks are not expensive on PE relative to earnings growth. Non-Consensus: we think AMD and SK Hynix are worth a serious look.

• The Circuit podcast discusses the uncertainty surrounding Intel’s future leadership and strategic direction
• Ben and Jay analyze the board’s role in Intel’s challenges and debate the company’s path forward
• The podcast ends on a hopeful note, with Jay expressing optimism about Intel’s 14A technology and the potential for success in the future

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

• TSMC’s November revenue decline was better than expected, poised for nearly 30% annual revenue growth.
• SK Hynix restructures CIS organization to replicate HBM success model, aiming for improved performance.
• TSMC founder sheds light on reasons behind Samsung and Intel’s setbacks, pointing out core issues. YMTC refutes backdoor listing rumors, facing industry scrutiny; while Samsung explores using discrete LPDDR for AI-driven iPhones and China investigates Nvidia amid US-China chip tensions.

• Gartner, Inc.’s financial performance in the third quarter of 2024 showed resilience amidst a complex economic landscape.
• The company’s contract value grew by 7% year-over-year and revenue figures exceeded expectations, with a total Q3 revenue of $1.5 billion representing a 6% increase on an FX-neutral basis.
• Gartner exhibited robust performance across its business segments, leading to raised guidance for revenue, EBITDA, EPS, and free cash flow for the year 2024.

• Qorvo, Inc. has reported its financial results for the second quarter of fiscal 2025, revealing a mixed performance across its various business segments.
• During the quarter, Qorvo achieved a revenue of $1.047 billion, marking an 18% sequential increase and exceeding their guided midpoint.
• This growth was driven by double-digit increases across all three operating segments: Advanced Connectivity and Sensors Group (ACG), High Performance Analog (HPA), and Connectivity Systems (CSG).

• Revenue grew 10.8% YoY to JPY37.3bn, driven by Overseas Solutions order growth and yen depreciation impact.
• Operating profit decreased 9.7% YoY to JPY634mn due to business liquidation expenses and additional game co-development costs.
• Revenue from animation production increased YoY, but Media Contents faced a loss due to joint game development costs.

• Constituent changes to the S&P 500 INDEX and capping changes will result in a round-trip trade of US$15.9bn across the Select Sector indices and the S&P500 Equal Weight Index.
• The Select Sector index trackers and S&P 500 Equal Weight trackers will need to buy Apollo Global Management and Workday, adding to the buying from S&P 500 INDEX trackers.
• The flows will change over the next week as stock prices move around and final capping is done after the close on 13 December.

• Pat Gelsinger took to X to invite us to join him in 24 hours of “praying and fasting” for Intel’s 100k employees to help them navigate “this difficult period”
• This is an unprecedented move never before seen in the semiconductor world, albeit we suspect that IBM may have dabbled in something similar to resurrect their 2nm process prowess
• This coming Thursday is the proposed date. Don’t expect miracles, this could take until the following Monday for the full impact to manifest itself in terms of share price appreciation

• Strong price action across the market this week coupled with implied vols having caught down to historic vols has put a floor on implied vols.
• Tencent sees strong call buying in December 410 and 420 Calls with month end 400 strike Put buying for December and January.
• Cathay Pacific, +21% over past 3 weeks, HSBC, at 52-week high plus up 38% on the year and BABA, down 21% from Oct 02 high all active names.

• Although vols have stabilized this week both HSI and HSCEI are still trading about 3-4 vol above where they were pre-stimulus and are still not monetizing.
• Strong price action this wek helped keep a floor under implied vols. 
• Positions were added in both HSI and HSCEI with demand tilted towards up-strike Calls given the rally on the week.

• LGES takes over GM battery plant in response to Trump’s win, expanding its presence in the US market.
• India establishes a sovereign AI ecosystem, driving ambitions forward for technological advancements in the country.
• Samsung’s One UI 7 Beta introduces AI enhancements and improved security features in anticipation of the Galaxy S25 release.

• In this edition: • ASM International / ASML Holding / BE Semiconductor Industries | brightened outlook for semiconductor equipment sales • Black Friday/Sinterklaas update | fewer debit card payments during Sinterklaas week

• QuantumPharm (2228 HK) listed in Hong Kong after raising US$126m towards the bottom end of its IPO price range. Its six-month lockup will expire on 12th Dec 2024.
• QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• ServiceTitan, a founder-led market leader for trades businesses in the United States and Canada, is expected to IPO this week.
• The company’s amended S-1 puts the initial price range per share at $52.00 to $57.00, implying a market cap of roughly $5B at the midpoint.  
• I have a positive view of upcoming ServiceTitan IPO and expect an attractive first trading-day return. The stock will begin trading on the Nasdaq on Thursday.  

• Highwire Capital’s $2.50/share offer for SGRP is 60% higher than previous bids, raising concerns about financing.
• Founders William Bartels and Robert Brown sold significant SGRP shares below offer price, undermining confidence in the transaction.
• SGRP’s stagnant business faces challenges with declining EBITDA margins and volatile free cash flow, impacting valuation.

• 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: Lifestyle China (2136 HK), Arcadium Lithium (ALTM US), Shanghai Henlius Biotech (2696 HK), ESR Group (1821 HK), Get Nice Financial Group Ltd (1469 HK), Canvest.
• Lowest spreads: Renewable Japan (9522 JP), Macromill, Inc (3978 JP), Fuji Soft Inc (9749 JP), Nec Networks & System Integr (1973 JP), Capitol Health (CAJ AU), Elematec Corp (2715 JP). 

• The Sep24 Nikkei 225 Rebal was odd. They could have done 3. They did 2. For now, I still see 2 IN and 2 OUT for the Mar25 Nikkei225 Rebal.
• There is also a DOUBLE-capping event for Fast Retailing which on 8% outperformance could become a TRIPLE-capping event. For now, the trade is shaping up to be US$7bn a side.
• There is still a tech bent to potential ADDs. Some Consumer Goods stocks need stock splits to get in. Longer-term, the TOPIX Methodology Rejig is an interesting problem set.

• TSMC’s N2 Progress Sparks Buzz Amid Yield Improvement Rumors; If True Then 2nm Will Become Even More Successful Than 3nm
• Hon Hai & TASA Showcase Homegrown Space Technologies Including an Alternative to Starlink
• Himax: Buyback Program Lifts Shares; Auto Display Controllers, AR Displays & WLO for AI Progressing 

• SOUTHBOUND gross trading activity rebounded about 20% this week vs the previous week. Net buying was a little lower but still strong. Market volumes overall in HK remain weak.
• Alibaba Group Holding (9988 HK) was again the top buy and EV names XPeng (9868 HK) and BYD (1211 HK) were bought, but tech as a whole was sold.
• I continue to expect HK-listed tech to see ongoing buying. Alibaba, Tencent, Xiaomi, etc are safe havens against Trump tariffs as they don’t compete in the US. 

• Rubrik, cybersecurity company and leader in the segment of enterprise backup and recovery software solutions, delivered a high quality beat and raise in 3QFY25.
• Stock indicated up 20%+ during regular trading session on heavy volume. Rubrik raised guidance for FY25 total revenue to $861M at the midpoint, implying ~37% growth.
• Moreover, the company generated positive FCF, achieved strong growth at scale and surpassed $1B+ in subscription ARR, a big milestone.

• WSTS is revising up Semiconductor demand for 2024 and 2025, AI demand higher than expected. Taiwan AI Server ODM revenues are still booming, impressive numbers.
• Samsung and SK Hynix expediting new LPDDR “In Memory Processing” for Nvidia in 2026. TSMC forecast AI demand 3x increase to 2026.
• Intel 18A low yield and low density brings new light on management reshuffle. TSMC N2 is ~20% ahead. Apple trying its own 5G modem, again.

• Private Equity Interest: Worldline has attracted early-stage interest from private equity firms, including Bain Capital, driven by its discounted valuation and extensive market presence in Europe.
• Market Challenges: Worldline’s stock declined over 50% in 2024, with Q3 revenues dropping 1.1% organically, reflecting struggles in Merchant and Financial Services and the need to stabilize growth.
• Valuation and Takeover Potential: Worldline’s current valuation at 4.61x EV/EBITDA offers upside potential, with a €9.00/share target implying an 18.4% return, though profitability recovery remains uncertain.

• Intapp, Inc. concluded its fiscal first quarter of 2025 on a strong note, showcasing substantial growth in cloud annual recurring revenue (ARR) and laying a strong foundation for future expansion.
• A key highlight was the 27% year-over-year growth in cloud ARR, reaching $309 million, which now comprises 74% of the company’s total ARR of $417 million.
• SaaS revenue also increased by 30% year-over-year to $77 million, driving total revenue up by 17% to $119 million.

• TSMC: +23.5% Premium; Decent Level to Short Relative to Historical Trading Range
• UMC: +0.1% Premium; Middle of the Historical Trading Range; Short Interest Rises Again
• ASE: +3.5% Premium; Near Middle of Recent Range, Wait for Better Levels

• DigitalOcean, a cloud infrastructure provider aimed at developers, startups, and SMBs, achieved steady progress in its third quarter of 2024.
• The company reported revenue growth of 12% year-over-year, propelled by the success of its core cloud offerings and substantial gains in its AI/ML platform.
• Despite facing challenges from earlier price adjustments and acquisitions, DigitalOcean demonstrated robust growth in annual run rate revenue of $798.3 million, marking a consistent 12% increase year-over-year.