TMT/Internet

• When this deal was announced, it was light. But the timing, JSR influence, large-ish float, ensured FUD would make this trade wide. It traded wider.
• Nearly 7mos ago, Shinko had much-underperformed peer Ibiden, meaning downside gap risk from undisturbed was negative as spreads were wide. I reco’d a buy. Then 5mos ago, recommended taking profits.
• Ibiden has now underperformed Shinko by 25+% in 2-plus weeks. GAP RISK is higher but this is a short-timer. HUGE yield to “expected” start date, so everyone assumes a delay. 

• Local traders see interest rate cuts and value-up disclosures as key for timing Samsung Electronics 1P discount narrowing.
• Samsung’s only realistic value-up goal beyond 50% FCF return is improving ROE, likely through a pref-skewed buyback or cancellation program.
• If Samsung announces a value-up plan during the Bank of Korea’s rate cuts, local traders expect the 1P discount to reverse, targeting October-November for position entry.

• Nuvoton Technology (4919 TT) should be deleted from the Yuanta/​P-Shares Taiwan Dividend Plus ETF in September and that will trigger selling of over 4 days of ADV.
• Nuvoton Technology (4919 TT) has underperformed most of its peers since the start of the calendar year and shorts have started to increase in the stock.
• Positioning appears light and the recent deletion from an index has increased the real float of the stock. Recent semiconductor weakness could further pressure the stock.

• TSMC: Premium Breaks Back Down to +8.3%; 5-15% Could Now Be the Key Range
• UMC: -2.2% Discount; Good Level to Go Long the Premium
• ASE: Premium Breaks Down Again, Now Only +1.5%; Consider Going Long

• Black Sesame Technologies (BLACKSES HK) is looking to raise US$143m in its Hong Kong IPO.
• Black Sesame International Holdings (BSIH) is an automotive-grade computing SoC and SoC-based intelligent vehicle solution provider.
• In our earlier notes, we looked at the past performance of the deal. In this note, we discuss peers and share our thoughts on valuation.

• Tough Start to the Week — Negative News for Nvidia and Apple Supply Chains
• Key Events: Asustek & Novatek Results; Mediatek & TSMC July Sales Data
• UMC Signals Non-AI Industry Inventory Correction Through 2024E; Why Intel Is Increasingly Important 

• UMC’s latest results indicate a mild recovery for consumer, communications, and computing industries. UMC’s capacity utilization to continue improving but industry inventory correction could last until end-2024E.
• UMC maintained 2024E capex guidance however it’s increasingly clear UMC can’t keep up the capex arms race alone. Hence we see UMC & Intel becoming closer and closer partners.
• We continue to view UMC as a long-term accumulate, and rate the stock as Structural Long, this however requires a longer than usual multi-year holding period.

• Q2 revenue of $64.73 billion and EPS of $2.95 surpassed expectations of $64.39 billion and $2.93, respectively. Intelligent Cloud revenue reached $28.52 billion but below analysts’ $28.68 billion expectation. 
• Activision acquisition boosted revenue by 3 points but cut EPS by $0.06 due to lower operating income.
• While Microsoft’s core cloud business slowed, it increased capex significantly. Uncertain GenAI monetization might shift wealth from Microsoft shareholders to Nvidia shareholders.

• In a shocking turn of events, Intel Corporation, a long-standing leader in the semiconductor industry, witnessed one of its worst days on Wall Street, losing over a quarter of its market value in a single trading session.
• The drastic drop followed the company’s announcement of a $1.6 billion net loss for the second quarter of 2024, a stark contrast to the $1.47 billion profit reported in the same period the previous year.
• Intel’s share price plummeted by 27%, marking its steepest decline since 1974, as the company grappled with disappointing earnings, a bleak forecast, and a massive restructuring plan.

• Revenue for FY03/22 was JPY227.8bn (+8.8% YoY), with IT Infrastructure Distribution segment revenue rising 17.4% YoY.
• Operating profit for FY03/22 was JPY4.3bn (-13.4% YoY), with a temporary drop in profit margin due to competition.
• Daiwabo Holdings’ FY03/25 forecast includes revenue of JPY1.0tn (+4.6% YoY) and net income of JPY21.8bn (+409.0% YoY).

• SOUTHBOUND was again a net buyer, for HK$9.2bn this week (now 26wks in a row of net buying), on smallish two-way volumes.
• I’ve thought national team was buying banks for months. They were gone for a couple of weeks. Feels like they are back. 
• There were three ETFs in the top five SOUTHBOUND sells this past week, reversing last week. Energy, Utilities, Telecoms bought. 

• Continued stub losses are one thing. Ballooning PCCW Ltd (8 HK) parent debt is another. 
• Preceding my comments on PCCW and HKT Ltd (6823 HK) are the current setup/unwind tables for Asia-Pacific Holdcos.
• .These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Nintendo missed Q1 with Operating income coming in at Y54.5b (-71% YoY) vs our estimate Y116b and the street at Y94b
• Switch 2 hardware and software units sold are now suffering from buyer fatigue as consumers await the next-gen console
• The stock will likely fall quite sharply over the next week. Looking for good buying opportunity in anticipation of the next console cycle

• Q224 revenues of $12.8 billion, in line with their updated May outlook, ~flat QoQ and down 1% YoY.
• Gross margin (non-GAAP) was 38.7%, down 1.1 points YoY but down a whopping 4.8 points from the April outlook.
• Shares tanked >24% in after hours trading. What’s really going on at Intel? 

• We have a Positive view of KT Corp (030200 KS) due to three main reasons.
• First, KT has started to implement aggressive capital return policy (returning 50% of net income through dividends and share buybacks/cancellations). Two other reasons include Corporate Value Up and higher Smartscore.
• KT Corp has been the best performing stock among the three major Korean telcos in the past one year. KT Corp’s shares are up 27.9% in the past one year.

• Orders were JPY4.7bn (-4.5% YoY) and revenue was JPY5.0bn (+7.2% YoY), reaching a record high.
• Operating profit was JPY1.2bn (+16.7% YoY) with an OPM increase of 1.9pp to 23.2%.
• mcframe license revenue was JPY1.3bn (+22.0% YoY), breaking the record high for the Products business.

• Tenable Holdings has been in the news after reports suggested that the management is exploring strategic alternatives including a potential sale.
• The company delivered a mixed performance for Q2 2024, with lower-than-predicted Calculated Current Billings (CCB) but stronger performance in revenue and earnings.
• Although the performance of the company’s flagship Cyber Exposure platform, Tenable One, and its cloud security offerings were both highlighted as central growth drivers, it was noted that the traditional Vulnerability Management (VM) market, in which the company is a leader, has become increasingly cyclical.

• Tower Semiconductor posted a solid financial performance for the second quarter of 2024, showcasing revenue of $351 million and a net profit of about $53 million, translating to a net margin of approximately 15%.
• Notably, the company achieved sequential quarterly revenue growth as previously targeted and forecasts continued growth with a third-quarter revenue guidance of $370 million, plus or minus 5%.
• The commitment to driving innovation and expanding market leadership was evident throughout the period.

• Check Point Software reported solid financial results for the recent quarter, showcasing moderate growth across key financial metrics.
• The company achieved a 7% increase in revenues, reaching $627 million, which exceeded the midpoint of its projected range.
• Additionally, non-GAAP earnings per share (EPS) grew by 8% to $2.17, reflecting Check Point Software’s ability to manage costs effectively while navigating a challenging market environment.

• WeRide Corp (WER CH) is looking to raise around US$300m in its upcoming US IPO.
• WeRide provides autonomous driving products and services from L2 to L4 of driving automation.
• In this note, we will talk about the positive aspects of the deal.

• Amazon anticipates a 13% YoY rise in Q2 2024 revenue to $148.67 billion and a 58% YoY jump in EPS to $1.03, highlighting robust earnings.
• AWS is expected to see a $1 billion increase in quarterly revenue, reflecting an 18% year-over-year growth, driven by custom AI chips and model training services.
• Analysts have reaffirmed buy ratings for Amazon, with an average target price of $228, reflecting strong confidence in the company’s growth prospects.

• WeRide Corp (WER CH) is looking to raise around US$300m in its upcoming US IPO.
• WeRide provides autonomous driving products and services from L2 to L4 of driving automation.
• In this note, we will talk about the not so positive aspects of the deal.

• E Ink and Himax introduce new color e-paper controller to enhance display technology, offering improved visual experience.
• Taiwan’s Economic Minister outlines plans to boost global competitiveness, focusing on strategic initiatives to strengthen economy.
• Shanghai commits $13.7 billion investment in IC, AI, and biopharma industries, driving growth in technology sectors.

• Meta’s Q2 revenue of $39.1B surpassed expectations, up 22% YoY. EPS jumped 73% YoY to $5.16, beating estimates.
• Ad revenue within the Family of Apps rose 22% YoY, driven by online commerce and strong performance in Europe and the Rest of the World.
• Q3 revenue forecasted between $38.5B and $41B. Meta’s AI investments are set to enhance ad delivery and support long-term growth, despite increasing CapEx.

Freelancer reported a mixed performance in H124, with Escrow.com volumes down significantly after a very strong Q123, while the Freelancer platform benefited from growth in the Loadshift business. There are several promising opportunities in the enterprise business, including providing AI model training services and integration into new verticals within Escrow.com, that could reinvigorate growth from H224. Management is focused on making incremental improvements to the core marketplace platform with the aim of encouraging clients to become regular users of the platform and expanding the size of projects.

• Revenue decreased to JPY55.2bn (-13.1% YoY) with a progress rate of 25.2%; operating profit fell to JPY1.0bn (-42.6% YoY).
• Recurring profit dropped to JPY1.2bn (-28.4% YoY) with a progress rate of 17.3%; net income attributable to owners was JPY862mn (-20.8% YoY).
• Strong sales in North America and Europe, robust memory and sensor IC sales, but weak power device sales due to excess inventory.

• In Q1 FY03/25, revenue increased 6.7% YoY to JPY7.1bn, while operating profit decreased 15.1% YoY to JPY1.1bn.
• The EC Solutions business saw a 6.8% YoY rise in revenue to JPY4.0bn and a 5.8% YoY decline in operating profit.
• The IT Solutions business reported a 6.5% YoY revenue increase to JPY3.1bn and an 11.5% YoY decrease in operating profit.

• Net sales: JPY50.8bn (-15.9% YoY); Operating income: JPY2.6bn (-15.4% YoY); Ordinary income: JPY572mn; Profit: JPY429mn.
• Electronic Devices business: Net sales JPY40.6bn (-17.7% YoY); Operating income JPY2.7bn (-11.2% YoY); decreased semiconductor demand.
• Foreign exchange losses: JPY1.1bn due to yen depreciation; minor impact on consolidated earnings for FY03/25.

• Q1 FY03/25 results: Sales JPY42.4bn (-5.4% YoY), Operating profit JPY1.7bn (-13.1% YoY), Recurring profit JPY2.3bn (+30.6% YoY), Net income JPY1.5bn.
• Segment sales: Electronic Devices and Components JPY34.8bn (-3.1% YoY), Electronic and Electric Equipment JPY4.7bn (-18.0% YoY), Industrial Chemicals JPY2.8bn (-8.9% YoY).
• Segment profit: Electronic Devices and Components JPY1.6bn (+7.3% YoY), Electronic and Electric Equipment JPY127mn (-68.8% YoY), Industrial Chemicals JPY45mn (-75.5% YoY).

• Nvidia’s H20 and upcoming B20 were launched to comply with China export controls, and have remained successful due to deficiencies and supply issues for Huawei’s Ascend AI accelerators.
• However, Nvidia’s China success will be short-lived due to increasing LLM compute requirements and no method for it to offer a more performance dense offering due to export controls.
• Not only will Huawei’s upcoming Ascend AI accelerator mitigate this issue, but it will likely also aim to address some of the other deficiencies of the Ascend platform too.

• The SET50 index tracks the performance of the top 50 largest and most liquid names listed on the Stock Exchange of Thailand (SET).
• In this insight, we take a look at the potential ADDs/DELs for SET 50 during the index rebal event in December 2024.
• At present, we see 3 ADDs and 3 DELs but since the reference period is yet to start, the rankings can fluctuate significantly before the base date.

• Q224 revenues of $5.8 billion, +5.5% QoQ, +9% YoY and $100 million above the guided midpoint
• AMD forecasted current quarter revenues of $6.7 billion at the midpoint, up 15% QoQ and about the same YoY.
• AMD shares are up 9% in premarket trading, hardly the response one expected from a good but not amazing report. But why?

• Mediatek 2Q24 Earnings Beat Expectations; Strong Mid-Term Revenue Guidance Maintained
• 2Q24 Global Smartphone Market Witnessed Best Growth in Three Years
• Repeats Strong Mid-Term Guidance; Continues to Signal Revenue Strength for 2025E & 2026E. Maintain Structural Long Rating.

• 3Q24 Sales: NT$123.5-132.4 billion, down 3% to up 4% QoQ, up 12-24% YoY. 4Q24 is expected to be a slower quarter based on current expectations.
• Advanced 3nm technology can support SP, tablets, and other end devices. AI-powered functions like ARM-based CPU or EV will bear fruit in 2025.
• The GPU has partnered with NVDA. Auto chips partnered with NVDA will be shipped out later in 2025. They will power MTK’s CPU and ISP in conjunction with NVDA’s GPU.

• 3Q24 guidance: Shipment up mid-single digits QoQ; ASP: Remains firm in USD; GM: around mid-30%. (Consensuses were high single digits.)
• Has provided a 22nm HV solution for high-end OLED DDI to high-end SP, and expects to reach high-volume production in 2025.  
• Cooperation with Intel Corp (INTC US) is progressing well, targeting MP for 14nm in 2027.

• CoSAI is a collaboration between tech giants like Intel, Google, and IBM to drive innovation in the automotive industry.
• Knobs and buttons are making a comeback in car interfaces, reflecting a trend in automotive design for more tactile controls.
• Apple opposes Tata-Vivo partnership as Vivo marks its 10th anniversary in India, while Biden admin shows support for CHIPS Act to boost packaging and testing industry.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We view Liberty Costa Rica’s ESG as “Adequate”. The score mirrors our assessment of parent Liberty Latin America (LLA), which discloses ESG-related information on a consolidated basis, without meaningful details on the bond-issuing credit pools that we cover (C&W Communications and Liberty Puerto Rico). 

We assess LLA’s Social and Governance pillars as “Strong” and “Adequate”, respectively, offsetting the “Weak” Environmental score. Controversies are “Immaterial” and Disclosure is “Adequate”. 

• ATEN reported Q2 results with greater success in winning enterprise orders while North American service providers limited their spending. 
• Over the past year, ATEN has shifted more of its sales and marketing effort to winning enterprise customers, which should have more of a meaningful benefit to recurring revenue. 
• ATEN reported revenue of $60.1 million compared to our forecast of $62.7 million. The second quarter results were lower than first quarter numbers, which is rare to see for ATEN.

• Q1 progress rates versus full-year forecast: 25.7% for orders, 21.7% for revenue, 8.2% for operating profit, 8.4% for net income.
• Orders: JPY97.5bn (+1.0% YoY); Revenue: JPY79.1bn (+10.4% YoY); Operating profit: JPY2.4bn (+113.2% YoY); Net income: JPY1.5bn (+734.1% YoY).
• Segment performance: DX Solutions orders +18.6% YoY, Network Solutions orders -3.3% YoY, Environmental & Social Solutions orders -11.9% YoY.

• We screen for stocks at the extreme ends of their positioning or momentum ranges among active Asia Ex-Japan equity funds.
• High Positioning, Negative Momentum: AIA Group Limited, Shenzhen Inovance Technology 
• Low Positioning, Positive Momentum: New Oriental Education & Technology Group, Shinhan Financial Group

• PC Maker Shares Under Pressure — PC makers’ share prices fell by mid-to-high single digits during July. However, pure PC exposure outperformed as shown by HPQ’s gain during the month.
• Latest PC Industry Data is Promising — Latest IDC data shows that global PC shipments increased 3% YoY in 2Q24, and are up 5% YoY ex-China.
• Microsoft & Taiwan PC Maker Earnings Ahead — Microsoft reports July 30th U.S. time. We expect Taiwan PC makers to report earnings within the first two weeks of August.

• 3Q24 guidance: Shipment: up 9-11% due to higher customer demand. ASP: down 0-2% QoQ. GM: 28-30%, up 3ppts QoQ.
• Pricing hit bottom in 2Q24. Anticipates UTR in 2025 returning to 70-80%.
• Effective tax rate for 2H24 is expected to be 20%.

• Q1FY3/25 results indicated a slow start for earnings, despite a robust profile for sales growth at 16.5% YoY and both quarterly orders and backlog at record highs.
• The key takeaways are: 1) although reported OP fell 4.8% YoY, underlying OP growth was 4.6% YoY when restating for one-time expenses for a new office, 2) quality of earnings remains sound despite cases of project cost overruns, and 3) the sustained strong outlook for orders provides high earnings visibility.
• We believe that the direction of travel remains positive for earnings growth, given strong order visibility and as the company’s operations continue to scale.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We view Liberty Puerto Rico’s ESG as “Adequate”. The score mirrors our assessment of parent Liberty Latin America (LLA), which discloses ESG-related information on a consolidated basis, without meaningful details on the bond-issuing credit pools that we cover (C&W Communications and Liberty Costa Rica). 

We assess LLA’s Social and Governance pillars as “Strong” and “Adequate”, respectively, offsetting the “Weak” Environmental score. Controversies are “Immaterial” and Disclosure is “Adequate”. 

• Japan System Techniques Co., Ltd. (hereafter, the “Company”) posted an increase of sales and profits in all four business segments for FY2024/3.
• In particular, operating profit of the Medical Big Data business and the Global business in total, increased sharply by 49.5% YoY.
• Net sales saw an increase for 13 consecutive years, and ordinary profit for 9 consecutive years with a record high, leading to 17.8% of ROE. 

• Smart Eye, a provider of eye tracking and driver monitoring systems for the automotive industry, has seen significant growth and potential upside
• The company has secured over 100 new design wins and a capital raise, improving the risk-reward profile
• With upcoming regulations in the EU driving demand for their technology, Smart Eye is expected to experience further revenue and profitability growth.

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.

• Adoption of new revenue recognition standards increased FY09/22 revenue by JPY2.6bn, operating profit by JPY1.0bn, and reduced order backlog by JPY11.2bn.
• FY09/23 revenue decreased by 6.8% YoY to JPY90.3bn, with operating profit down 15.8% YoY to JPY7.1bn.
• Revised FY09/24 forecast predicts revenue of JPY116.0bn (-5.0% YoY) and operating profit of JPY7.5bn (-13.7% YoY).

• Today, Nippon Electric Glass (5214 JP) announced an on-market buyback of up to 7.0mm shares (8.08%) spending up to ¥20bn from tomorrow through end-January 2025.
• An impressive headline, but fewer shares. Importantly, this follows a ¥20bn buyback from last November. They are moving through their MTMP more quickly than expected.
• This new buyback is worth about 25% of the inbound cross-holdings. And some of those holders plan to sell. This may be designed to let them sell in the market. 

• A8 New Media (800 HK)’s IFA opines that Mr Liu Xiaosong (Chairman and CEO)’s HK$0.36 privatisation offer to be fair and reasonable. The vote is on 23 August. 
• Key conditions include approval by at least 75% of disinterested shareholders (<10% of disinterested shareholders rejection).
• No shareholder holding a blocking stake, low AGM minority participation rate and the massive 162.8% takeover premium suggest a done deal. At the last close, the gross/annualised spread is 5.9%/36.0%.

• Shares of Nazara Technologies (NAZARA IN) were rattled last week after the company had received show cause notice from the GST Department on 16th July.
• The GST liability pertained to two of its subsidiaries and summed up to INR 11.2 bn, which represents under 50% of consolidated net-worth.
• However because the GST for the industry is a delicate and debatable matter, the actual impact on the financials cannot be ascertained now, but company faces a high legal risk.

• ServiceNow’s second quarter of 2024 financial results indicate strong operational and financial momentum, with notable increases in important metrics despite a backdrop of an internal investigation and leadership changes.
• The management presented a robust narrative of growth, leveraging its GenAI strategy, which contributed significantly to their overall performance.
• The company reported a 23% year-over-year growth in subscription revenue at constant currency, surpassing their own guidance.

• Despite a negative share price reaction, following its 2Q2024 earnings report, SK Hynix (000660 KS) remains firmly amid an earnings upgrade cycle.
• With SK Hynix entering oversold territory, near-term momentum indicators are displaying bullish signals.
• SK Hynix trades at nearly one standard deviation below its 5-year historic average EV/EBITDA ratio and a discount to global peers.

• AT&T offers a range of telecommunications services, including wireless, fiber, and broadband
• The company’s market position, technological advancements, and capital return potential make it a strong investment opportunity
• Despite being undervalued, AT&T has a significant presence in Latin America and expects steady EBITDA growth

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.

• 10-15% Market Share for Server Chassis — Chenbro is one of the leading producers of server chassis in the world.
• Key Nvidia Development Partner — Chenbro produces servers for most major data center names including AWS and China’s BAT, as well as for Nvidia servers and architecture.
• New Server Market Color to Be Released Soon — The company is well positioned to expand capacity as the market expands and is expected to release 2Q24E earnings in early-August.

• Fiserv, a global provider of payment and financial services technology solutions, reported a robust set of results for its second quarter, pointing towards continued growth and expansion across its portfolio.
• The company announced an adjusted EPS of $2.13, reflecting an 18% increase year-over-year, bolstered by 7% adjusted revenue growth and a significant 160 basis points improvement in adjusted operating margins to 38.4%.
• These figures demonstrate a solid trajectory towards achieving double-digit organic revenue and adjusted earnings per share growth.

• International Business Machines Corporation (IBM) recently discussed its financial outcomes for the second quarter of 2024, presenting a mix of strengths and areas for improvement that inform its current investment thesis.
• IBM’s leadership emphasized robust performance in their Software and Infrastructure segments, demonstrating significant revenue growth fueled by continuous innovations in artificial intelligence (AI) and hybrid cloud technologies.
• However, the Consulting segment showed weaker dynamics, reflecting a more cautious spending environment among clients regarding discretionary projects.

• AT&T’s Q2 2024 earnings revealed mixed results as the telecom giant continues to push boundaries in its wireless and broadband sectors.
• The net additions of high-value wireless and broadband subscribers underscore a robust influence of its investment-driven growth strategy, even as the company witnessed minor downshifts in other service areas.
• In the wireless segment, AT&T reported an encouraging addition of 419,000 postpaid phone subscribers.

• Datasite’s A$2.50/share, in cash, lifetime-high Offer for virtual room provider Ansarada Group Ltd (AND AU), announced on the 13th Feb, appeared a total slam dunk. 
• And for the most part it was, with the Explanatory Doc lodged on the 12th April, and Scheme Meeting initially scheduled for the 14th June. Then the ACCC waded in. 
• The ACCC has now signed off. FIRB will follow shortly.  The revised Scheme Meeting will be held on the 19 August, with expected implementation on the 6 September.  

• Back on the 12th June, PRC property rental play A8 New Media (800 HK)  announced an Offer by way of a Scheme from chairman/founder/major shareholder Liu Xiaosong.
• The Cancellation price was $0.36/share, a punchy 162.77% to last close. The price was declared  final.
• The Scheme Doc is now out, with an independent shareholder vote on the 23 August and payment on or around the 2nd October. This is a done deal.

• Top Gainers/Loser: Taiwan Tech Stocks Hit Hard Last Week By Global AI/Tech Pullback
• Key Events This Week: Major Earnings Week Including UMC, Mediatek, Realtek, AMD, Microsoft
• TechChain Insights: Call with Silicon Motion; QLC NAND Emerging as Key Enabler for AI Devices 

• The Texas Instruments had a mixed Q2, reporting revenue of $3.8 billion, a 4% sequential increase but 16% YoY decline.
• This contrasted with their optimistic revenue predictions for Q3, forecasting in the range of $3.94 billion to $4.26 billion.
• This could have been due to the decline in Analog revenue by 11% YoY, Embedded Processing by 31%, and its Other segment by 22% from YoY quarter.

• The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
• Last week saw NORTHBOUND net SELL RMB 11.4bn of A-shares. NORTHBOUND sold everything. Seemed somewhat cap-weighted. Not a pretty flow picture. 
• A-Shares sharply underperformed HK indices, but AH spreads didn’t recover the prior week’s disaster. That said, there WAS dip-buying this week on the worst hit, which is unusual recently.

• The ‘Financial Viability’ (GAAP earnings) criterion is the main obstacle that keeps companies out of the S&P 500 and overall S&P 1500.
• Uber Technologies (UBER US) and Crowdstrike Holdings (CRWD US) are past examples of companies that got added to S&P 500 after passing the GAAP Earnings criterion.
• Marvell Technology (MRVL US) and Snowflake (SNOW US) are currently ineligible for S&P 500 inclusion due to failing the GAAP Earnings eligibility requirement. 

• RaaS Research Group has published an update report on data analytics company Pureprofile (ASX:PPL) following the release of its unaudited FY24 results which included a maiden NPAT of $0.1m, a $2.0m turnaround on FY23, and EBITDA of $4.4m, down 4% on the pcp but within the guidance range of $4.1m to $4.4m.
• FY24 EBITDA was ahead of our forecast for $4.3m.
• Revenue for the year was $48.1m, again within the company’s guidance range of $48m to $49.1m, although a little below our forecast for $49.0m.

• Sales increased by JPY2.2bn YoY, driven by higher sales in Career and Elderly Care and Disability Welfare Operators segments.
• Operating profit declined by JPY729mn YoY due to higher advertising and other expenses exceeding sales increase.
• Kaipoke member locations increased to 29,900 (+10.5% YoY) and elderly care facilities to 51,950 (+12.2% YoY) as of July 1, 2024.

• Spotify has reported a solid performance for the second quarter of 2024, characterized by notable strides in subscriber growth, profitability, and revenue enhancements.
• The company’s delivery on key metrics evidenced a substantiation of their dual commitment to offering a robust product while proving their business sustainability.
• Their execution of strategic initiatives such as diversified subscription plans and regional price adjustments contributed positively to the financial results.

• Alphabet Inc. witnessed a notable second quarter, proving its strong stance in the market with increased momentum in Search and substantial progress in Cloud, largely centered around its use of artificial intelligence (AI).
• The company’s quarter was highlighted by tremendous results in Search with the platform having another booming quarter.
• The AI initiatives seem to be driving new growth contributing positively to these results.

• SOUTHBOUND was again a net buyer, for HK$7.8bn this week (now 25wks in a row of net buying), on smallish two-way volumes. 
• I’ve thought national team was buying banks for months. This week, 1 bank showed up in the top 20 net buys after only 1 in the top ten last week.
• There were three ETFs in the top six SOUTHBOUND buys this past week. That was unusual. Some high div SOEs got sold. 

• TSMC: Crashed Then Rebounded to +15.1% Premium; Likely to Break Down Again
• UMC: -0.2% Discount; Earnings Imminent; Notable Decrease in ADR Headroom
• ASE: Rebounded to +9.2 Premium After Major Breakdown; Likely to Drop Again

• A TALE OF TWO SEMI INDUSTRIES: ASE’s latest earnings commentary indicates that the performance gap between “leading-edge” technologies and “traditional/mature” semiconductor technologies may be widening.
• CAPITAL REQUIREMENT TO KEEP PACE IS RISING: Capacity utilization is starkly different for traditional vs. leading-edge capacity; and capital requirements to keep up in terms of advanced capacity is rising.
• ENTRY BARRIERS RISING: We suspect that smaller players could face significant challenges in keeping up with the investments necessary for leading-edge packaging and testing capacity. ASE needs to invest heavily.

• Cadence Design Systems, Inc. reported strong results and exceeded expectations for their second quarter of 2024, with broad-based momentum seen across their product portfolio.
• The company also posted stronger bookings than anticipated, leading to a strong backlog, demonstrating the robust demand for their innovative products.
• Cadence updated its revenue guidance for the year to over 13% year-over-year growth, reflecting its strong performance.

discoverIE’s Q125 trading update confirmed that underlying earnings expectations for FY25 are unchanged. While the Q125 revenue decline reflects the lower bookings environment in previous quarters, book-to-bill was above one and bookings increased organically year-on-year despite ongoing destocking by customers in the industrial market. Robust gross margins and a well-controlled cost base support the company’s 13.5% target operating margin for FY25 and we maintain our forecasts.

• Verizon Communications Inc. had a successful second quarter of 2024 as the company reports strong results, with wireless service revenue climbing 3.5% year-over-year, adjusted EBITDA rise by 2.8%, and free cash flow increasing by 3% compared to last year.
• In addition, the company’s customer-centric measures such as myPlan and Verizon Business Complete are resonating with its consumers, leading to further growth and stronger customer relationships.
• The company’s impressive results follow its commitment to innovation and the implementation of a brand refresh, signifying its evolution and future visions for connectivity.

• Visa Inc.’s fiscal third quarter of 2024 reveals a strong financial position, but also indicates room for improvement.
• Net revenue was $8.9B, notching a 10% YoY increase and included a 12% YoY rise for EPS, indicating an increased level of profitability.
• One of Visa’s strongest areas this past quarter has been its focus on global client engagement, resulting in a 3-pt increase in their global Net Promoter Score (NPS) to 76.

• Back on the 19th July, online Q&A play Zhihu (2390 HK/ZH US) announced the buyback of 46.92mn ordinary A shares (15.9% of shares out) at HK$9.11/share (US$3.50/ADS). 
• Assuming the buyback is fully taken up, chairman Yuan Zhou’s stake will increase to 44.4% from 42.9% currently (held via A shares and the weighted-voting B shares). 
• The key condition is a simple majority vote from independent shareholders. Zhihu is sitting on  net cash of US$764mn. A significantly larger buyback, or higher price, could have been initiated. 

• China announced game approval for the June batch. The number of games approved remained at a higher level than 2023.
• The pace of China game approval appears to have accelerated to the same level as pre-tightening. Of companies that we are monitoring, none got any approval.
• China’s CADPA published a semi-annual report pointing to flattish growth of gaming revenue in the first half. 

• Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
• An interesting comparison between China and India smart phone markets in 2Q 2024 – highlighting differences in market size and the dominance of leading players.
• Xiaomi Corp(1810 HK)  made a strong come back in 2Q24 in terms of sales in both the markets. In China, it saw a 17% year-on-year increase, shipping 10 million units.

• Taiwan Semiconductor Manufacturing Company’s (TSMC) second quarter 2024 results reveal a mixed picture of advances and challenges.
• The revenue for the quarter was notably strong, increasing by 13.6% sequentially in NT or 10.3% in U.S. dollars.
• This substantial growth was fueled by robust demand for the cutting-edge 3- and 5- nanometer technologies, although somewhat offset by smartphone seasonality.

• Due to weakening hiring demand from both manufacturing and service, we expect BZ’s cash billing to decline 5% QoQ in 2Q24, 9% below consensus. 
• We believe BZ’s user matrices still growing and leading. The weakness is mainly attributable to the employer/hiring side;
• We cut TP by US$3 to US$19/ADS while keep the BUY rating.

• ST reduces 2024 outlook amid industrial and automotive slowdown, impacting company’s future projections.
• VCs discuss Taiwan startups in AI industry, highlighting challenge of staying competitive in fast-evolving sector.
• Global regulators collaborate to address market dominance of AI giants, emphasizing need for fair competition and consumer protection.

• ASML announced its second quarter 2024 financial results, revealing data that both supports and raises concerns about its short-term performance and long-term strategy.
• The company posted total net sales of EUR 6.2 billion, slightly ahead of its guided figures, with net system sales contributing EUR 4.8 billion.
• The net system sales were driven by 54% Logic and 46% Memory, with Installed Base Management sales slightly higher than expected at EUR 1.48 billion.

• Snap-on Inc., known for manufacturing tools and equipment for professional use, delivered mixed results for its second quarter of 2024.
• The Company experienced a slight decline in gross sales of 1.1% organically, going from $1,191.3 million the previous year to $1,179.4 million.
• The operating income (OI) margin, though, rose to 23.8% from last year’s figures.

• SAP SE’s Q2 2024 results show continued growth momentum despite the volatility in the software industry.
• More customers are moving to the cloud, and the company’s portfolio is becoming increasingly attractive, owing to its Business AI capabilities.
• Their Q2 performance was marked by substantial increases in profitability and the diligent execution of their transformation program.

• Nokia Corporation’s engagement in the second quarter of 2024 revolved around significant developments amid a transitory, challenging market environment.
• The company announced two crucial transactions: the proposed acquisition of Infinera, a North American optical networking entity, and Nokia’s plan to divest its submarine networks business to the French State.
• The acquisition of Infinera is expected to boost Nokia’s Optical Networks business by quickening innovation for customers and strengthening Nokia’s position in North America.