TMT/Internet

• 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 flow expectations for the June 2025 index rebal event.
• We expect no index changes for June 2025 but we estimate there to be US$1.53bn in one-way flows which translates to a turnover of 7.4%.

• There has been a big crypto money move in Korea. Market cap of crypto currencies held in crypto exchanges in Korea nearly doubled from October to November 2024. 
• We discuss 8 major listed companies in Korea that are major beneficiaries (directly and indirectly) of this big move into crypto currencies in Korea. 
• Some of the major beneficiaries include Kakao Corp, KT Corp, Hanwha Securities, Woori Technology Investment, and Vidente.

• The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
• In this insight, we take a look at the flow expectations for the June 2025 index rebal event.
• We expect no index changes for June 2025 but we estimate there to be US$470mn in one-way flows which translates to a turnover of 4.3%.

• 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 our flow expectations for the June 2025 index rebal event.
• We have also presented our index change expectations for the next semiannual index review which will take place in September 2025 (regular ADDs/DELs only take place in March and September).

• Swiggy (SWIGGY IN) listed in November 2024 and around 85% of the shares outstanding (US$7.6bn) will unlock on 13 May.
• Nearly 80% of the shares that unlock are held by pre-IPO PE/VC investors and they are 100% in the money in most cases. Expect the selldown to commence soon.
• Swiggy (SWIGGY IN) should be added to one global index in June, while inclusion in the other global index will require a small price increase or selling from PE/VC investors.

• A noticeable shift in tone this week, with participation broadening and price action turning constructive.
• Implied vols declined across most names, unwinding last week’s spike but still sitting above historical medians.
• Call activity bounced back, and the Put/Call ratio suggestive of less defensiveactivity.

• NVX believes its strategy aligns with the administration’s goal to secure critical mineral supply chains and support domestic manufacturing.
• Its existing Riverside plant – where production capacity has been pre-sold via multiple offtake agreements – is in Tennessee and NVX plans to construct a 2nd production facility in the state, recently obtaining approval and expected tax credits toward this project.
• Each of NVX’s three operating units is expected to play an important role in its development & growth, as NVX leverages proprietary R&D & patented technology to develop critical materials for the battery sector.

• Soluna is on a mission to make renewable energy a global superpower using computing as a catalyst.
• The company designs, develops, and operates digital infrastructure that transforms surplus renewable energy into global computing resources.
• Soluna’s pioneering data centers are strategically co-located with wind, solar, or hydroelectric power plants to support high performance computing applications including Bitcoin mining, Generative AI, and other compute-intensive applications. 

• TSMC’s Arizona Yield Success Silences Doubts: Management confirmed first U.S. fab has achieved yields comparable to Taiwan, validating global replication model and reinforcing alignment with U.S. clients like Apple, Nvidia. 
• U.S. Buildout Anchoring TSMC’s Long-Term Dominance: With 30% of N2 and beyond capacity to be in USA, TSMC building footprint across fabs, packaging, and R&D competitors will struggle to match. 
• Margins Resilient, AI Demand Accelerating: 1Q25 beat on AI strength despite smartphone softness and earthquake disruption. 2Q25E revenue guidance of +13% QoQ reflects continued momentum in advanced nodes and HPC.

• 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: China Resources Beverage (2460 HK) lock-up expiry; DN Solutions (298440 KS) and LG Electronics India (123D IN) IPOS.
• Event-Driven developments: Shibaura Electronics (6957 JP), Topcon Corp (7732 JP), Jamco Corp (7408 JP), TRYT (9164 JP), Canvest Environmental Protection Group (1381 HK), ENN Energy (2688 HK). 

• DISCO Mar-25 results beat Consensus by ~12%. Jun-25 guidance is very weak but DISCO always under-guides egregiously. But it’s weak.
• Consensus has revised down its Jun-25 revenue forecast from 12% YoY growth to 6% but left Sept-Dec-25 unchanged at ~10% YoY growth. The odds are that Consensus is too high.
• The stock is down -39% since end Dec-24 but still trading at 20x EPS in the face of downside risks to Consensus. Not appealing.

• TSMC: 16.5% Premium; Short Interest Remains Near Historical Highs for ADR and Local
• ASE: +2.2% Premium; Wait for Closer to Par Before Going Long; Short Interest in Local Shares at Highs
• ChipMOS: +1.1% Premium; Short Interest in Local Shares Hits New Highs

• The anchor lock-up expired on 13 Feb 2025 and the pre-IPO shareholder lock-up expires on 13 May 2025. The free float is forecasted to increase from ~13% to ~40%.
• Swiggy (SWIGGY IN) is expected to be added to global all-world at the June 2025 review following its IPO in November 2024 and the lock-up expiries.
• Swiggy (SWIGGY IN) is expected to be added to global standard in May 2025 if top-down approach is used for free float. Otherwise, its addition will take place in August.

• TSMC’s Arizona fab hits Taiwan-level yields, easing replication concerns and reinforcing its global leadership across N2 and advanced packaging. 
• AI demand offsets smartphone softness in 1Q25; TSMC guides +13% QoQ revenue for 2Q25 as margins hold firm despite tariff and earthquake headwinds. 
• Faraday and UMC results ahead this week — Key readouts on Taiwan’s ASIC, mature node, and design service momentum amid U.S.-China tech decoupling.

• A weekly recap of volatility and price metrics, including option volumes, volatility trends, the spot/implied relationship, and open interest statistics.
• The recent cooling in volatility may be more of a pause than a reversal—we explore why that might be.
• Trading activity continued to fade as the market works through the volatility of recent weeks.

• After the new CEO, Mr. Lip-Pu Tan, took office at the chip giant Intel Corp (INTC US), he initiated a large-scale restructuring of the executive team and organization.
• Intel Corp (INTC US) to sell 51% share of Altera to Silver Lake, a global leader in technology investing. This deal is further to deal with non-performing assets.
• Now, the critical question is, who are the clients of Intel Corp (INTC US) IFS (Intel Foundry Service)?  

• TSMC offered a surprisingly robust outlook for the current quarter with revenues expected to rise 13% QoQ to $28.8 billion at the midpoint, their highest ever quarterly revenue.
• No change to the previous full year 2025 guidance of mid-20% growth in US$ terms
• It’s likely too early to see the full impact of tariffs and further China restrictions in TSMC’s outlook, but the second half will likely be a different story

• I tally 51 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
• One new deal discussed this week: Shandong Fengxiang (9977 HK)‘s Merger by Absorption.
• Key updates/news took place on De Grey Mining (DEG AU), Canvest Environmental Protection Group (1381 HK),Tsuruha (3391 JP)/Welcia (3141 JP), Shibaura Electronics (6957 JP), and PEC Ltd. (PEC SP).

• Value Act, as activist, believes the KKR’s Topcon Corp (7732 JP) is not being done at the right price. But Value Act will now tender shares and invest in Bidco. 
• Lynas Corp Ltd (LYC AU)and Iluka Resources (ILU AU) are the only Australian companies with confirmed (or near-term) refining specific heavy rare earth elements as China restricts exports.
• StraCap has been tilting at the Wakita (8125 JP) for years. It hasn’t made headway. The only way StraCap will get its measures over the line is by soliciting retail.

• Since late-February (2/25/25 Compass and 2/27/25 Int’l Compass) we had been expecting an 8-10% pullback to provide a buying opportunity.
• However, after getting the 10%+ pullback, we discussed in 4/1/25 and 4/3/25 reports how we no longer saw it as a buying opportunity, and we downgraded our outlook to bearish/cautious
• While it is possible that the lows are in, we now are looking for the ACWI-US rally to fizzle, either here at $113.50-$115 or the 200-day MA (~$118).

• In February Yageo Corporation (2327 TT) made an unsolicited bid for Shibaura Electronics (6957 JP) at ¥4,300/share after getting the cold shoulder for months.
• Minebea Mitsumi (6479 JP) was asked to bid, and they did a week ago, bidding ¥4,500/share. Yesterday the Shibaura CEO was in an article saying an overbid would be considered. 
• Mid-Day, I boomeranged my piece, saying I thought Yageo would overbid. Today after the close, Yageo has overbid with a whopping ¥5,400/share bid, with unchanged start date of 7 May.

• Last night, Topcon Corp (7732 JP) announced that KKR had agreed a deal with ValueAct Capital who owns 14.62% of Topcon to have VAC tender shares and invest in Bidco.
• Topcon’s Special Committee saw nothing wrong with this in terms of fairness. I think that argument needs to be investigated at a broader level. 
• If Bidder wants 50.1% control and expects passive to agree, and Bidder gets 50.1% to join Bidco at terms, obviously, majority of minority disappears. This is an unintended loophole. 

• STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
• STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.
• In this insight, we take a look at the potential ADDs/DELs for the STAR 50 and STAR 100 indices for the June 2025 index rebal event.

• Yageo Corporation (2327 TT) has revised its hostile preconditional tender offer for Shibaura Electronics (6957 JP) to JPY5,400, representing a 20.0% premium to Minebea Mitsumi (6479 JP)’s JPY4,500 offer.
• All the other terms remain unchanged. In response to the revised Yageo offer, the Board will commence a sincere review to determine if the Yageo offer will enhance corporate value. 
• There is a 50/50 chance that Minebea walks or revises its offer. Yageo’s revised offer is marginally above the midpoint of Minebea IFA’s DCF range, potentially justifying a higher offer.

• Revenue expected to be USD$28.4-29.2 bn (+13% QoQ/38% YoY), with gross margin projected to be 57-59% and operating profit margin at 47-49%.
• Tariffs still have uncertainties, so our current capability to share is expected to maintain 24-26% YoY.  
• Taiwan Semiconductor (TSMC) – ADR (TSM US) plans to build 6 Fabs in Arizona, with 2nm being the main focus there, hence 30% will be allocated there.

• 2Q25 strong revenue. Full year outlook (revenue up mid-20% YoY) looks a bit low since 1H25 is growing at ~37%. CoWoS and AI revenues still expected to double in 2025.
• Revenue and capacity outlook: very confident. US capacity is accelerating. But margins dilution warning, part of this is US import tariffs uncertainty. Strong denial on any Intel linkup.  
• The stock is cheap at 14.7x 2025 EPS (consensus probably a bit low) and 12.5x 2026 EPS. The market might still be in correction mode, but TSMC is nicely discounted. 

• 1Q15 Smartphone units up 1.5-3% YoY but given accelerated imports to US and Chinese consumer subsidies, end-demand was probably flat YoY. TSMC 1Q25 revenues suggest that Smartphone chips declined YoY.
• We should expect a correction in 2H25 and overall flat 2025 YoY.
• The only positive is that chips are getting bigger (AI cores) and more expensive (3nm) and hence positive to Mediatek and Qualcomm, but not to phone Brands Apple included.

• Elevarm, an Indonesian agritech startup that aims to enhance the yield and income of smallholder horticulture farmers throughout Indonesia, has raised US$4.25 million in pre-Series A financing led by Intudo.
• Existing investors Insignia Ventures Partners and 500 Global participated.
• Founded in 2022, Elevarm specialises in horticulture production and the provision of “high-quality” agricultural inputs, including superior seeds, bio-based fertilisers, and environmentally friendly pest control solutions.

• NVIDIA Corp (NVDA US)  said it will take a $5.5 billion financial hit after Washington fresh restrictions on H20 AI chips designed for the Chinese market. 
• The Trump Administration’s move comes as as a surprise, the U.S. now requires a special export license for these chips, but historically, no such licenses have ever been granted.
• Some estimates Nvidia may lose $10 billion in revenue, as most of the affected chips are already manufactured and now unsellable, plus the ban could benefit Chinese competitors like Huawei.

• TSMC: +21.5% Premium; Consider Shorting the Spread at This Level
• ChipMOS: +3.2% Premium; Good Level to Consider Shorting the Spread: Local Shares’ Short Interest at Multi-Year Highs
• CHT: +1.3% Premium; Good Level to Consider Shorting the Spread; ADR Short Interest at Multi-Year Highs

• Money Forward (3994 JP) MF’s recent earnings was no surprise to us as we continued to highlight that the company’s business model is far inferior to its counterpart freee. 
• The last 2-3 quarterly results have made that discrepancy clear and MF’s non-BO SaaS businesses are only dead weight and have helped conceal weaknesses of its business model.
• MF’s share price is down 19.3% YTD and think the market has finally come to terms that MF is losing ground whereas freee has managed to turn around its profitability.

• Manycore Tech (KOOL US)  is looking to raise up to US$300m in its upcoming Hong Kong IPO.
• Manycore (MC) is a fast-growing, disruptive design and visualization platform powered by artificial intelligence (AI) technologies and purpose-built graphic processing unit (GPU) clusters.
• In this note, we look at the firm’s past performance.

Next 15 faced a number of challenges in the year to end January, with a difficult macroeconomic backdrop, relatively high exposure to the tech sector and the loss of the Mach49 contract. This masked some strong performances elsewhere within the group, particularly at SMG where existing relationships with retailers have been extended and important new customers brought on board. Next 15 has been responding to market conditions through simplifying the group structure (with more to do here), taking out duplicated costs and working to drive greater alignment between the various group companies and activities. The balance sheet is in good enough health to support continuing bolt-on M&A, investment in AI and new capabilities, with the maintained dividend providing an attractive yield.

discoverIE’s FY25 trading update confirmed that it generated record underlying earnings despite a 3% revenue decline. Encouragingly, Q425 orders were 11% higher q-o-q and up 15% y-o-y on an organic basis. Tariffs are not expected to have a material direct impact and, with a track record of protecting profitability during downturns and organic revenue growth at the upper end of its peer group over the cycle, we view the company as well-placed to navigate this uncertainty. Good growth in design wins over the last year provides the foundations for organic revenue growth when customers start to order in line with end demand.

• Small beat in 1Q25, small miss in 2Q (guidance vs Consensus). 2025 outlook unchanged but higher uncertainty, possibly weaker margins in 2H. Consensus on the middle of the guidance range.
• Management comments on the benefits of High NA EUV, trying to counter the concerns on higher cost. Mngt says there are other benefits (cycle time, process simplification meaning higher yield)
• The stock is trading at -1 stdev below average PEx, or 25x forward EPS. Problem is Avg PEx includes 2 valuations bubble. Excluding these, the stock is at average PEx.

• In this insight, we discuss some of the key beneficiaries in Korea that could actually stand to gain from such export restrictions. 
• We also discuss other Korean companies that could be negatively impacted by this move by the Chinese government. 
• Despite the uncertainties related to China’s export restrictions of rare earths minerals, we do not expect sudden collapse of the entire semiconductor and EVs value-chain in Korea.

• There could be one change for the CNI Semiconductor Chips Index with Nexchip Semiconductor (688249 CH) replacing Amlogic Shanghai (688099 CH) in June.
• Passive trackers are estimated to buy 1.4x ADV in Nexchip Semiconductor and sell 0.8x ADV in Amlogic Shanghai. There will be buying in Semiconductor Manufacturing International Corporation (SMIC) due to capping.
• The forecast add and delete have performed in line since the start of the year but there has been a move higher in the last few weeks.

• Horizon Robotics (9660 HK) raised around US$800m in its Hong Kong IPO in October 2024. The lockup on its pre-IPO investors is set to expire soon.
• 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.
• In this note, we will talk about the lockup dynamics and possible placement.

• Will Taiwan Semiconductor (TSMC) – ADR (TSM US) work on Intel Corp (INTC US)‘s Foundry Services (IFS) and invest about 20% share?
• Taiwan Semiconductor (TSMC) – ADR (TSM US) Chairman and CEO Dr. CC Wei has promised to further invest USD$100bn to establish capacity in the US; what’s the reasoning behind this?
• Given the current US tariff issue, what is the best investment advice?  

• Intel yesterday announced that it was selling a 51% stake of its Altera business to Silver Lake for $4.46 billion
• The deal values Altera at $8.75 billion, roughly half what Intel paid to acquire the company over a decade ago
• Altera’s CEO, Intel veteran Sandra Rivera, will be replaced with a new CEO, Raghib Hussain, formerly president of Products and Technologies at Marvell

After reporting positive momentum in Q424, Freelancer saw year-on-year growth in gross marketplace volume (GMV) and revenue in Q125 across both divisions. The company also generated positive operating profit and cash flow in the quarter. We view the adoption of AI (by Freelancer, by freelancers and by customers) and new integrations and partnerships within Escrow as key drivers of growth and profitability during our forecast period.

• Serverworks’ FY02/25 revenue was JPY35.7bn (+29.8% YoY), exceeding forecasts with a 100.4% achievement rate.
• Cloud Integration revenue reached JPY2.3bn (+23.7% YoY), driven by demand for cloud transitions and hybrid strategies.
• Resale services revenue was JPY23.3bn (+34.0% YoY), supported by increased AWS usage and new customer acquisitions.

• Featherless.ai, a US-based serverless AI inference platform, has raised US$5 million in seed funding.

• The investment comes from a notable list of global investors, including Airbus Ventures, 500 Global, Kickstart Ventures, HF0, Panache Ventures, and Oakseed Ventures.

• With the new funding, Featherless.ai intends to advance research and development into next-generation AI architectures to lower inference costs, potentially enabling AI deployment on lower-cost hardware.

• BT Group’s half-year performance reflects a mixed set of results, with progress in strategic priorities met with challenges in certain segments.
• The company continued to focus on its five strategic priorities, which include enhancing its UK presence, accelerating fiber build-out, reducing costs, and improving customer satisfaction.
• Notably, the Openreach division achieved significant milestones in its fiber build-out and connections, surpassing expectations, and maintaining its market-leading position with a strong take-up rate of 35%.

• Soluna recently released its March business update, in which the company highlighted a major milestone.
• Soluna was awarded its second US patent, which expands the scope of its modular data center design and is key to transforming wasted energy into sustainable computing.
• Other highlights of the update included Soluna announcing that 2024 revenue was up 80.5% Y/Y to $38 million. 

• Rapid changes in US’s tariff policies have driven sharp equity volatility. For instance, since March third week, HSI’s forward PE declined from 11.1x to 9.1x and bounced back to 9.5x.
• Such severe volatility has opened up interesting investment opportunities in Asia. Screening on strong EPS growth forecasts, high ROE, low PEG, and low debt-equity, we come up with 35 stocks.
• Our stocks are from China (15), HK (8), Korea (4), India (4), Taiwan (2). Notably, TSMC, SK Hynix, Wuxi AppTec, Galaxy Entertainment, ZTO Express, M&M Finance, Muthoot Finance, Muangthai Capital.

• Q1 revenue and EBITDA missed expectations, with slowing growth in key business segment and corporate customer adds.
• Macroeconomic risks, including US tariffs, may be weighing on business confidence and new customer acquisition.
• Valuation now looks attractive, trading at a steep discount to global peers despite similar fundamentals.

• Telefónica sold its Peruvian subsidiary to Integra Tec for €0.9 million, transferring €1.24 billion in debt, following the unit’s bankruptcy filing and prolonged tax disputes in Peru.
• The sale marks a strategic step in Telefónica’s Hispam exit, following disposals in Argentina and Colombia, and reinforces the company’s focus on core markets with higher returns.
• Despite crystallizing a €620 million loss, the transaction removes a distressed asset, improves group visibility, and underscores management’s commitment to financial discipline and geopolitical de-risking across Latin America.

• Taiwan Semiconductor (TSMC) (2330 TT) has lost nearly 30% of its value since its mid-January peak—half of that decline occurred by early March, prior to Trump’s tariff announcement.
• The stock is very oversold, although it bounced off its lows last week, and reached 903 this Monday. This insight will analyze how far this rebound can go.
• Earnings will be reported on April 17. Our model suggests the stock has room to move in either direction—the results will be the catalyst. Check out our targets.

• In FY02/25, TECMIRA’s revenue increased by 27.8% YoY to JPY11.2bn, with all segments achieving growth.
• The company recorded an operating profit of JPY91mn, recovering from a JPY123mn loss in FY02/24, despite a net loss.
• For FY02/26, TECMIRA forecasts revenue of JPY11.5bn, adjusted EBITDA of JPY680mn, and net income of JPY100mn.

• Singapore-based Flagright, an AI-native anti-money laundering (AML) compliance and risk management platform, has announced a US$4.3 million seed funding round.
• The investment was led by Frontline Ventures, with significant participation from existing investors including Y Combinator, Pioneer Fund, and Moonfire Ventures.
• Rubin Ritter (ex-co-CEO of Zalando), André Silva (ex-Global Head of Expansion at Revolut), Phillip Chambers (CEO of Orbex), Ahmed Badr (COO of GoCardless), Teng Sherng Lim (ex-CCO of Advance.

• In 1H FY08/25, Toumei reported revenue of JPY14.5bn, operating profit of JPY1.7bn, and net income of JPY1.2bn.
• Revenue grew 31.4% YoY, with significant increases in Office Denki 119 (56.5% YoY) and Office Solutions (84.3% YoY).
• Operating profit rose 86.4% YoY, driven by higher revenue and improved SG&A ratio, despite increased procurement costs.

• Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. The first two weeks in April were HK$145bn. 
• The first two weeks in April were HK$145bn as what appeared to be national team, or equally patriotic buyers, showed up droves to buy financials, energy, telecoms, and big techs.
• Included is a summary of important China Stocks-relevant news as I saw it this week, but frankly, the only thing that matters is the back and forth by the Donald.

• TSMC reported March 2025 revenues of NT$285.96 billion, up 10% MoM and up 46.5% YoY.
• Revenue for January through March 2025 totaled NT$839.25 billion, an increase of 41.6% YoY.
• At the forecasted exchange rate of NT$32.8 to the US$, this translates into Q125 revenues of $25.58 billion, marginally above the guided midpoint of $25.4 billion

• TSMC’s Next Leap: 1Q25 Earnings Ahead and the 2nm Frontline
• Is the Valuation Divergence Justified? Mediatek Vs TSMC Valuation Compared
• PC 1Q25: 5% YoY Growth but Shipments Inflated Ahead of US Tariffs. Dream of a Refresh Cycle Continue 

• Kinatico Ltd (ASX:KYP) is a ‘Know Your People’ regtech company providing workforce compliance monitoring and management technology and services.
• The company has announced that total revenue in Q3 increased 15% to $8.1m, with higher-margin SaaS (Software as a Service) revenue making up 50% of the total.
• SaaS revenue grew 60% in the quarter on the previous corresponding period (pcp) to $4m and is tracking at $16m on an annualised basis.

• I tally 52 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma.
• One new deal discussed this week: Public Storage (PSA US)‘s NBIO, by way of a Scheme, for Abacus Storage King (ASK AU).
• Key updates/news took place on Gold Road Resources (GOR AU), Mayne Pharma (MYX AU), Canvest Environmental (1381 HK), ESR Group (1821 HK), Goldlion Holdings (533 HK), Shibaura Electronics (6957 JP).

• A challenging week for HK single stocks, with weak breadth and sharp losses punctuated by a gap lower to start the week.
• Monday marked the highest options volume day of the year, with a spike in the Put/Call ratio and unusual ETF option activity.
• Implied vols surged, with the average implied vol percentile at very elevated levels.

• MNTN, Inc. (pronounced “mountain”), leader in OTT advertising software and first mover of PTV in the United States, filed to go public.
• Founder-Led adtech company was backed by Fidelity, BlackRock, Greycroft, SV Angel, Qualcomm Ventures, and Baroda Ventures, among others.
• I like the company’s leadership position,  high growth, FCF positive business and $60B+ near-term market opportunity centering around SMBs in the United States.