TMT/Internet

• Yesterday’s Google’s earnings may have been bit of “meh” at first glance, but there were nuggets in the call that may have important implications for the broader market.
• Network segment continues to struggle, but the rest of the businesses continue to grow at healthy double digit rate.
• Search revenue growth surpassed YouTube ads revenue growth last quarter. For the first time, Cloud posted >$10 Bn quarter while maintaining high 20s growth YoY.

• Arco Graphics is a strategic reseller of industrial CAD and semiconductor fab ERP software in Japan, representing Dassault Systems and IBM
• Despite consistent EBIT growth over the past 7 years, the company’s valuation remains attractive for investors
• Expected to announce better-than-guided results for Fiscal 2023 in May, along with an improved shareholder returns strategy

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.

• Alphabet’s revenue jumped 14% YoY to $84.74B, exceeding the $84.19B forecast, fueled by strong digital ad sales and cloud services demand.
• Net income rose 28.6% to $23.6B, surpassing the $22.9B estimate, reflecting effective cost management and revenue growth despite margin concerns.
• YouTube’s ad revenue fell short of expectations, growing slower than Q1 due to increased competition and tougher year-on-year comparisons, impacting overall share performance.

• Plover Bay Technologies (1523 HK) reported 28.4%/55 % YoY revenue/net profit growth, led by growth from new customers in the US, Australia, and Europe. 
• The company reiterated its long-term guidance of reaching 300 mn USD revenue (FY23: 94 mn USD) in less than ten years. There was no clear guidance for FY24. 
• The stock trades at 14.8x PE FY24e, with a 5.4% dividend yield (assuming an 80% payout), and is at the cusp of an inflection in its growth. 

• NCKU in Taiwan achieves breakthrough in angstrom-scale semiconductor precision, potentially revolutionizing the industry.
• Uncertainty surrounds impact of Trump win on green energy, with transition likely to be slower but not impossible.
• Apple introduces new open-source AI models, Kyushu attracts record investments from TSMC, while SK Hynix experiences sales/profit growth. Vietnam partners with Qorvo, Cadence to train 50,000 engineers by 2030.

• Orders for 1H FY12/24 totaled JPY7.1bn (+27.0% YoY), with Measuring Equipment at JPY2.3bn (+14.9% YoY) and Custom Order Test Equipment and Services at JPY4.8bn (+33.7% YoY).
• Operating loss expanded to JPY478mn, recurring loss to JPY457mn, and net profit attributable to owners of the parent was JPY884mn due to a JPY1.9bn gain from the sale of fixed assets.
• Full-year FY12/24 forecast: Sales JPY12.5bn (+8.3% YoY), Operating profit JPY300mn (+115.8% YoY), Recurring profit JPY330mn (+61.8% YoY), Net income JPY1.6bn (+253.9% YoY).

• Perfect Corp. provides an AI and machine learning based B2B SaaS platform for virtual try on and marketing of beauty and fashion products as well as six mobile apps sold B2C for makeup suggestions, try-on, tutorials, photo and video editing and most recently, Gen AI creation and editing.
• It is expanding its offering to new verticals and has strong IP as well as the largest database for AI training in the industry.
• It has a dominant market share and serves almost all the major beauty brands worldwide.

• Perfect Corp. provides an AI and machine learning based B2B SaaS platform for virtual try on and marketing of beauty and fashion products as well as six mobile apps sold B2C for makeup suggestions, try-on, tutorials, photo and video editing and most recently, Gen AI creation and editing.
• It is expanding its offering to new verticals and has strong IP as well as the largest database for AI training in the industry.
• It has a dominant market share and serves almost all the major beauty brands worldwide.

• CACI’s stock price has decreased by approximately 4%
• The company has a strong presence in government services and defense sectors
• CACI is considered an undervalued investment opportunity with potential for significant growth in the future

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

• General products did not show an immediate recovery, but selective products have reached the bottom.    
• The 3Q24 sales will grow in the mid to high teens QoQ in EMS, and IC-ATM sales will grow in the mid to high single digits QoQ.  
• AI remains strong across all sectors. Despite AI SP driving the replacement cycle, other general demands still show muted recovery in 3Q24.

• Meta is expected to report a 58% YoY increase in EPS to $4.71, with revenue climbing 20% YoY to $38.29B, driven by robust ad performance.
• Meta plans a 20% cut in Reality Labs’ budget through 2026, aiming to save $3B while shifting focus to upcoming hardware production.
• In Q1, increased daily active users and a 6% rise in average ad prices have boosted Meta’s ad revenue, despite heightened competition and regulatory pressures. Likely to continue.

• BOE’s B16 OLED commitment boosts Korean suppliers, Wonik to see surge in orders
• Offshore wind delays in Taiwan lead to focus on Japan and Korea for opportunities
• Onsemi chosen to power VW EV, Elon Musk supports Trump’s EV policies, tariff war on chips impacts consumers and companies

• IRDM reported second quarter results where an increase in IOT subscribers was paired with the Company buying back more stock.  
• IOT has been a core underpinning for IRDM’s growth with the number of subscribers ramping this past quarter. IOT subscribers grew by 71 thousand in the quarter from Q1.
• IRDM reported second quarter revenue of $201.1 million compared to our estimate of $205.3 million. We had been expecting a higher engineering revenue estimate than IRDM generated.

• Q1 FY03/25 revenue was JPY3.9bn (+14.5% YoY), operating profit JPY700mn (+63.6% YoY), and net income JPY455mn (+71.1% YoY).
• Revenue by product category: conventional software JPY156mn (-55.3% YoY), cloud services JPY2.2bn (+36.4% YoY), maintenance services JPY957mn (+14.1% YoY).
• The company revised PCA software prices in July 2023 and will end packaged software sales by March 2024.

• Tower is a pure-play analog semiconductor wafer foundry that manufactures SiGe, Silicon Photonics, MEMS, RF, embedded flash-based memory, analog/mixed-signal, and CMOS image-sensor devices in the US, Israel, Japan and Italy.
• It is serving markets in mobile such as RF High Position analog, as well as in CMOS image sensors, and power management.
• Its new fab in Italy in partnership with STMicro that has started shipping product and whose capacity will continue to ramp over the next two years.

• As a result of the arrest of Kim Beom-Su, the near term impact on the Kakao companies (including Kakao Corp, Kakao Bank, Kakao Pay, and Kakao Games) is clearly negative.
• Given that this is a highly publicized event, it is likely that this legal case will be PROLONGED and finally decided by the Supreme Court which could take several years.
• Some of the scenarios include Kakao Group selling partial stakes in Kakao Bank and SM Entertainment but this is likely to get dragged on, resulting in further uncertainty.

• A month out from cutoff for the September rebalance, we see one potential change for the iShares China Large-Cap (FXI) (FXI US). 
• China Tower (788 HK) is a potential inclusion while China International Capital Corporation (3908 HK) should be deleted from the ETF.
• Shorts have been dropping in China Tower (788 HK) and are near their lows while increasing in China International Capital Corporation (3908 HK). 

• NVIDIA Corporation, a titan in the semiconductor industry, has been at the forefront of artificial intelligence (AI) innovation, primarily due to its cutting-edge GPUs that power everything from deep learning algorithms to complex simulations.
• As the company approaches its earnings report, investors are keenly observing the performance of its AI-driven products amidst a backdrop of global market dynamics and regulatory challenges.
• The company’s recent advancements, such as the “Blackwell” chip series, promise significant improvements in processing speed and efficiency.

• Kamala Harris assumes presidency after Joe Biden steps down amidst discussions on AI regulations and semiconductor debates.
• India’s iVP Semi focuses on domestic market with locally developed strategy, aiming to penetrate the fabless startup industry.
• Composite materials boast superior performance but come with higher costs due to advanced properties and manufacturing processes; South Korean experts urge government to protect OLED panel market against Chinese competition.

• Travelzoo (TZOO) is an online club for travel enthusiasts, featuring travel deals from airlines, hotels, cruiselines, vacations, and vouchers for offers from local businesses.

• TZOO has 223 employees, TZOO boasts 30 million members, 8 million mobile app users and 5 million social media followers, and publishes deals from over 5,000 travel, entertainment and local providers.

• In 2020, due to the pandemic, which decimated travel generally, TZOO’s revenues declined ~50% and the company lost $1/sh. 

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.

• Smartsheet has recently been in the news for fielding buyout interest.
• The company reported its First Quarter of Fiscal Year 2025 earnings with positive developments, demonstrating steady improvements.
• The company showcased an expansion, notably reaching a total of 72 customers with annualized recurring revenue (ARR) over $1 million, marking a 50% increase from the previous year.

• Solera Corp, the global leader in vehicle lifecycle management and automotive software solution provider, filed to list IPO on New York Stock Exchange.  
• The software company plans to raise capital and repay a portion of massive debt obligations, which exceeded $8B as of Jun-24. Goldman Sachs is leading the offering.  
• With $8B+ of variable rate indebtedness and low single-digit growth, the risk-reward profile of Solera IPO looks increasingly skewed to the downside.

• Azure Revenue Growth: Microsoft’s Azure revenue soared 21% YoY to $26.7B in Q3 2024, driven by advanced AI capabilities and increased enterprise adoption.
• AI & Personal Computing: AI-driven Copilot+ PCs and hybrid AI solutions are reshaping the market, with AI-capable PC shipments projected to rise from 19% in 2024 to 60% by 2027.
• Gaming + Activision: The $68.7B Activision acquisition boosted gaming revenue by 51% YoY, with Game Pass subscribers exceeding 30M and expanding Microsoft’s position in cloud gaming.

• The T50 index represents the top 50 largest stocks by market capitalization in the Taiwan Stock Exchange (TWSE). The T100 index represents the next 100 largest names (51-150 ranks).
• These indices are rebalanced quarterly. In this insight, we take a look at the names leading the race to become ADDs/DELs for the September 2024 index rebal event.
• T50/100 index changes can also trigger TDIV index changes. Nuvoton Technology (4919 TT) could be involved in such a move in September 2024.

• The TDIV index tracks the top 50 names in the Taiwan Stock Exchange with the highest dividend yields. It is a yield-weighted index with unique capping rules.
• In this insight, we take look at Quiddity’s expectations for index changes and capping flows for the TDIV Index for the September 2024 index rebal event.
• We expect one deletion and we estimate the one-way capping flow to be US$289mn.

• We had a conference call with Silicon Motion; the leading global provider of NAND flash controllers and solid-state storage solutions for the consumer, enterprise, and industrial markets.
• We focus on how Silicon Motion is leveraging advantages of QLC NAND flash memory, which is becoming a critical memory solution for new AI servers, AI PCs, and AI mobiles
• Maintain Structural Long rating for Silicon Motion and $102 valuation. The company is in a leading position to benefit from the rising importance of advanced memory controllers for AI applications.

• Temairazu is a high-quality vertical SaaS company in Japan with impressive EBIT growth rates, presenting as an undervalued investment opportunity
• Japan’s software sector is flourishing with a higher number of listed companies compared to Western markets, offering fertile ground for small-cap opportunities like Temairazu
• With upcoming improvements in shareholder returns and a competitive landscape in sectors like accounting software, Temairazu has the potential to be a Japanese hidden gem for prospective investors

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.

• Kokusai Electric (6525 JP) could price their secondary offering after market close today. The stock is down 10.5% since the rumors of the placement began 7 trading sessions ago.
• The Philadelphia Stock Exchange Semiconductor Index (SOX INDEX) has been dropping over the last few days and is 8.6% lower over the last 8 trading days.
• Kokusai Electric (6525 JP) has been trading higher on expectations of index inclusion in August, but that could move to November now.

• TSMC guided Q324 revenues of $22.8 billion at the midpoint, up 9.5% QoQ and up 32% YoY
• Increased full year guidance to be above mid-20% YoY growth in US dollar terms
• Share price has declined ~14% from its 52 week high but still up >2x from its 52 week low. Many will view this pullback as a gift, we certainly do…

• ASML’s results last week indicated continued strength in the semiconductor industry. We analyze the results to identify any potential signs of weakening or pauses in global industry momentum for Taiwan.
• Net system bookings surged 54% QoQ and ASML reported rising utilization levels of its clients’ equipment. Inventory days rose significantly, but this is due to upcoming 2025 orderbook deliveries.
• New US, Europe, and Japan fabs bolster strong revenue outlook into 2026E. Overall, robust industry demand persists according to ASML’s latest data, with no major signs of softness.

• The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
• SOUTHBOUND inflow strong but SOEs not leading and Hang Seng down hard. Bank buying minimal. NORTHBOUND saw significant selling, but A-share indices generally strong on the week. Window-dressing?
• AH Premia rose 3.3% on average. Really bad week for H vs A as Liquid Hs underperformed their As by 4%. Stunning week really. Relative performance a sea of red.

• Taiwan Stocks Fall On Potential New U.S. Tech Restrictions for China & Potential Policy Shift from a Trump White House… Strong TSMC & ASML Results Fail to Rally the Sector
• Even Tighter Technology Restrictions for China?  — US Could Use Special Rule to Restrict Selling of Products Made by Foreign Companies
• We See TSMC’s Margins Increasing Much Higher Than Guidance in Long-Term; 2Q24 Shows Apple Ramping Up 

• SoftwareONE is currently considered a special situation case by the market, with its new Board of Directors being more receptive to a potential transaction, possibly above CHF 20/share.
• Compelling stock narrative: strong balance sheet (10.3% of market cap in net cash&equivalents), low valuation (8.7x EV/NTM EBITDA, 17.5x Fwd P/E), shareholder return policy (buyback and dividend), and ongoing recovery.
• My fair value estimate is CHF 20.04/share, which implies an undemanding 9.8x EV/Fwd NTM EBITDA. SoftwareONE releases Q2 and H1 results on 21 August. Long.

• 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 +19.3bn of A-shares. NORTHBOUND sold everything. Consumer, Finance, and Energy hit hardest.
• Net flows as a percentage of value traded are clearly “short gamma”, but the net buys this week were of stocks previously a net sell. 

• Xiaomi Corp (1810 HK)‘s smartphone shipments to India surged in Q2 2024, reclaiming the top spot, while Samsung slipped to third.
• Consumer discretionary sales, including smartphones, were weak during the quarter due to elections, subdued demand, and extreme weather.
• The upcoming festive season is crucial for sales, with customers anticipating new launches and better bargains. 5G device upgrades continue to drive growth in 2024.

• Xiaomi (XM)’s shipments increased by 29% YoY in 2Q24, which is the most rapid growth among the global top five.
• Xiaomi is the only clear gainer of market share among the global top five.
• We believe the stock has an upside of 35% and the target price is HK$22.30 for the end of 2024.

• Com2Us’s net cash (including long-term financial investments) is 151% of its market cap. It is trading at P/B ratio of only 0.45x. 
• The company paid out 2,600 won in DPS in FY23. If we assume the same DPS, this would suggest a dividend yield of 6.7% at current price of 38,900 won. 
• Com2Us is a turnaround story. It had an operating profit of 1.2 billion won in 1Q 2024, improving from an operating loss of 13.3 billion won in 1Q 2023. 

• Zhihu Technology (ZH US) has launched a conditional share buyback offer to acquire a maximum of 46.9m Class A ordinary shares (15.93% of outstanding shares) at HK$9.11 (US$3.50 per ADS).
• The offer is conditional on shareholder approval by a majority of votes cast at the EGM. There is no minimum acceptance condition. The EGM vote is done due to irrevocables. 
• Zhihu’s share buyback returns 19% of cash not subject to government controls, below Douyu International Holdings (DOYU US)’s comparable 34%. The minimum pro-ration is expected to be around 34%. 

• 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: ASICS Corp (7936 JP) and Kokusai Electric (6525 JP) placements; Sanil Electric (062040 KS) and Timee Inc (215A JP) IPOs.
• Event-Driven developments China Traditional Chinese Medicine (570 HK), Huafa Property Services Group (982 HK), Samson Holding (531 HK), Zhihu Technology (ZH US), Intouch Holdings (INTUCH TB), Gulf Energy Development (GULF TB). 

• CrowdStrike, once hailed as a beacon of innovation in the cybersecurity sector, now finds itself at a precarious crossroads.
• Despite boasting a robust platform, impressive revenue growth, and high-profile clients, recent events have cast a long shadow over its future prospects.
• The global IT outage linked to CrowdStrike’s software has brought its skyrocketing valuation down but is there a rock-bottom in sight?

• Since the US$2.0 billion secondary placement announcement, Kokusai Electric (6525 JP)’s shares are down 5.6% from the undisturbed price of JPY5,520 per share (8 July).
• Looking at recent large Japanese placements is instructive to understand the potential trading pattern. So far, Kokusai’s shares have followed the pattern of previous large placements.
• The offering will likely be priced on 22 July. Investors who have participated in previous large Japanese placements tend to secure positive returns.

• TSMC’s Q2 revenue hits NT$673.51 billion, exceeding expectations amid strong demand for advanced chips.
• TSMC to grapple with tight supply through 2025, striving to meet soaring global demand across various sectors.
• TSMC on track for 2025 mass production of 2nm chips, enhancing capabilities for more powerful and efficient technologies.

• Micron is sampling MRDIMMs for AI and HPC applications, exploring innovative solutions for data processing needs.
• Hyundai Motors plans to add 300 new charging stations to support the expansion of their hydrogen bus fleet, promoting eco-friendly transportation options.
• German electrification struggle worsens with supplier bankruptcy up 60%, hindering the widespread adoption of electric vehicles and renewable energy technologies.

• Zuora is considering a potential sale after receiving acquisition interest, with Qatalyst Partners hired to facilitate the process
• Founder and CEO Tien Tzuo and other large shareholders may participate in the transaction
• Potential deal price of $13-15 per share, offering 40-60% upside from current levels, with downside protection due to low valuation and improving cash flow outlook

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.

• Five9, a noted leader in cloud contact center solutions, has been facing activist pressure in order to explore a potential sale of the company after a decent quarterly result.
• Positively, Five9 reported a solid increase in subscription revenue, growing 20% year-over-year, which underscores its successful transition and dominance in the cloud-based contact center market.
• This growth trajectory is supported by three key trends: the ongoing shift to cloud-based platforms, heightened focus on customer experience enhancement, and revolutionary impacts of AI on customer services.

• This is a follow-up research note on MoneyHero Group, a leading personal finance aggregation and comparison entity in Greater Southeast Asia.
• In its most recent Q1 2024 result, the company continues to demonstrate exceptional growth and strategic agility.
• MoneyHero Group has seen a significant uptick in revenues and improved margins and was also in the news for an important strategic sale of CompareHero in Malaysia that could prove to be another game changer.

Esker reported Q224 year-on-year constant currency (cc) revenue growth of 14% and bookings annual recurring revenue (ARR) cc growth of 65%. Bookings more than doubled in the Americas, helped by a large upsell to an existing customer, and had double-digit growth in every other region. On the back of the strong order intake year-to-date, management confirmed that its expectations for FY24 were unchanged. We have made small upgrades to our forecasts to reflect the strong Q2 performance.

In H124, digital wallets/account-to-account (A2A) adoption continued, with revenue growth of more than 50% y-o-y. Carrier billing revenues were robust with double-digit growth. The adjusted EBITDA margin is expected to be broadly flat versus FY23 as Boku invests to support core back-end infrastructure. We have raised our revenue forecasts while trimming our EBITDA forecasts to reflect this investment, which should support stronger growth in the medium term. The company has appointed a new CFO, Rob Whittick, with immediate effect.

• KT’s foreign room has been exhausted due to value-up trading inflows, NPS selling shares, and KT canceling treasury stocks.
• Hyundai Motor may sell 0.5% of its KT stake, likely to overseas investors. KT’s 700,000 share cancellation will lower foreign ownership to the low-4% range, possibly below 3.75% by November.
• Focus on the stock price surge from ETF recall requests around the effective date, and note that passive outflow corrections typically occur afterward.

• TSMC expects sales to grow by mid-20% YoY in USD in 2024, compared to low to mid-20% previously.
• The N3/N5 capacity is very tight, and they are even working with customers for 2026 capacity requirements, while N2 is on track to enter MP in 4Q25.
• A16 will enter MP in 2H26, and it’s first process starts adopting backside power.

• Significant revenue guidance hike — TSMC reported 2Q24 results, increasing 2024E revenue growth guidance to exceed ‘mid-20’s’ percent, a significant hike from previous guidance.
• Management is low-balling LT margins — Latest figures and long-term margin color makes us believe that TSMC will be able to increase GM much higher than current official LT guidance.
• Signs of Apple expecting strong iPhone 16 sales — TSMC reported strength in smartphone end-applications and we believe this is reflective of Apple ramping up re: stronger iPhone volume expectations.

• Mediatek Inc (2454 TT) is forecasted to experience slight growth in 3Q24 compared to 2Q24.  
• Qualcomm Inc (QCOM US) is expected to introduce AI PCs in 2024, while Mediatek Inc (2454 TT) scheduled for this product is anticipated to delivered in 2H25.  
• The shipment forecast for the Dimensity 9400 is approximately 5 million sets in 2H24.

• Dell Technologies (DELL US) is the main candidate for addition-transition with uncertainty arising from the ‘Multiple Share Classes’ criterion. Forecasted demand is ~$7bn and ~4 ADV.
• Williams Sonoma (WSM US) is one of the top candidates for addition-migration with uncertainty due to the migrations’ inconsistent market cap selection pattern. Forecasted demand is $840m and ~2.6 ADV.
• American Airlines Group (AAL US) is one of the main candidates for deletion with uncertainty due to price hence ranking fluctuations until cut-off. Forecasted supply is $290m and ~0.8 ADV.

• Author admires Brad Jacobs’ entrepreneurial success but questions high valuation of SilverSun Technologies
• Conversion of SSNT into stake in QXO implies optimistic market capitalization of $46 billion
• Author remains skeptical of QXO valuation despite Jacobs’ successful track record

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.

• XPeng and Baidu leading China’s autonomous driving technology advancements in 2023
• Malaysia’s semiconductor sector set for growth in 3Q24 with talent recruitment and AI integration
• Singtel partners with SK Telecom for 6G and AI innovation, while automakers persist in V2X development efforts

• RaaS Research Group has published an update report on ‘Know Your People’ regtech company, Kinatico (ASX:KYP) following its Q4 FY24 result which confirmed the company delivered NPAT of $0.8m for FY24, up 225% on FY23 and 60% ahead of our forecast.
• Q4 SaaS revenue jumped 40% on the pcp to $2.8m and was 12% ahead of Q3 and was ahead of our expectations.
• Transactional revenue of $4.5m for the quarter was flat on Q3 and down 12% on the pcp.

• RaaS Research Group recently interviewed Kinatico Non Executive Director Georg Chmiel on what attracted him to join the KYP board in September 2023.
• We discussed the merits of platform businesses and his experiences with technology platform companies.
• Mr Chmiel noted the merits of recurring revenues, including higher margins than one-time or transactional revenue, and lower costs as the platform becomes more scalable.

• Last night, the Board of Intouch Holdings (INTUCH TB)  announced an amalgamation with Gulf Energy Development (GULF TB) and Tender Offers for Advanced Info Service (ADVANC TB) (at THB 216.30) 
• And Thaicom Pcl (THCOM TB) (THB 11.00) shares. This is really big news. It appears to try to cap years of re-arrangement of the capital structure. It’s complicated.
• But it is not fair. INTUCH shareholders lose 22% of earnings value per investment value in 2024. 20% in 2025. But, there may be a way to block it…

• The amalgamation will entail the ratios for allocations of shares in the NewCo to the shareholders of GULF and INTUCH as detailed below.
• The amalgamation process and the establishment of the NewCo are expected to be completed in 2Q25.
• The restructuring is aimed at reducing duplication in the shareholding structure and facilitating growth opportunities in the energy, infrastructure, and digital businesses.

• TSMC: +17.9% Premium; Rebounds After Brief Breakdown; Wait for Better Levels
• UMC: +1.8% Premium; Can Consider Shorting the Premium at Current Level
• ASE: +5.5% Premium Represents a Major Breakdown; Can Consider Going Long

• KKR and KSP Kokusai Investments are looking to raise approximately US$1.7bn through an extended secondary follow-on offering, via selling approximately 22.3% of Kokusai Electric (6525 JP). 
• We have looked at the lockup expiry and deal dynamics in our earlier notes.
• In this note, we talk about share price performance since then.

• In 2021, Gulf Energy Development (GULF TB) made an offer to acquire all Intouch Holdings (INTUCH TB) shares at THB65/share. Singtel (ST SP) did not tender their then 21% stake.
• Now Gulf Energy Development (GULF) and Intouch Holdings (INTUCH) are looking to merge and that will result in VTO’s for Advanced Info Service (ADVANC TB) and Thaicom Pcl (THCOM TB).
• The merger will result in an inclusion to the SET 50 Index in the first quarter of 2025. There is the December rebalance before that.

• The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
• The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
• In this insight, we take a look at our latest rankings for ADDs and DELs for the upcoming index rebal event in December 2024.

• Google’s ad revenue growth consensus is 11.7% YoY in Q2, with some analysts projecting even higher, reflecting robust global digital ad spend trends.
• Google Cloud’s revenue reached $9.5 billion in Q1 2024, marking a 35% YoY increase and a 4x growth over the past four years. Q2 expected to see continued growth. 
• AI investments and innovations showcased at Google I/O aim to boost user experience and market leadership, with potential double-digit growth.

• GlobalWafers secures $400M from CHIPS Act to boost semiconductor production amid global chip shortage.
• Samsung intensifies focus on wearable device sales with new strategies to adapt to declining demand in market.
• Acer targets Indian smartphone market with white-label approach and Qualcomm teams up with Microsoft to innovate PCs using AI technology.

• ASML Holding NV has released its financial results for the first quarter of 2024, highlighting a combination of achievements and forecasts that paint a detailed picture of the company’s current and future trajectory.
• In terms of financial performance, ASML reported total net sales of EUR 5.3 billion, which aligns with the company’s previous guidance.
• The revenue from 11 EUV (extreme ultraviolet) systems constituted EUR 1.8 billion of the total net sales.

• EB has teamed up with TikTok in an integration that could lead to a sharp increase in new creators and overall traffic on EB’s marketplace.
• TikTok announced on its blog that EB has been integrated to allow content creators to manage and promote events within their TikTok content.
• The integration would enable followers to purchase tickets to creators’ events straight from TikTok without having to leave the platform.

• Gigabyte Technology (2376 TT) is looking to raise up to US$350m in its upcoming GDR offering. The firm is also looking to raise another US$300m via convertible bonds.
• In late Jun 2024, Gigabyte announced that it had received its shareholder’s approval to issue between 32-38m common shares via a GDR offering. 
• Similar to previous GDR listings, the deal is a long drawn out process with the firm required to jump through a number of board/shareholder/regulatory approval loops.

• Gigabyte Technology (2376 TT) is looking to raise up to US$307m in its global depository receipts (GDRs) offering. The firm is also looking to raise another US$300m via convertible bonds.
• Similar to previous GDR listings, the firm has undergone a long drawn out process prior to launching the deal, having to jump through a number of board/shareholder/regulatory approval loops.
• In this note, we run the deal through our ECM framework and comment on deal dynamics.

• Back on the 18th June, personal computer parts and accessories play PC Partner (1263 HK)  announced a SGX listing was under consideration; and a possible withdrawal of the HKEx listing.
• This development was discussed in PC Partner (1263 HK) Muses SGX Listing & HKEx Withdrawal.  PC Partner subsequently announced a privatisation would not accompany any proposed withdrawal (should it happens).
• My recent discussions with SFC confirms this is possible. And there was a recent precedent. But there may be caveats.

• SMCI has surged 214% YTD and will form part of NASDAQ-100 from 22/Jul topping $50 billion in valuation. Strategic partnerships with Nvidia & AMD boosted its AI server market presence. 
• Walgreens has declined 56% YTD with its market cap falling below $10 billion. Failing to maintain at least 0.1% of NASDAQ 100’s market value has led to its exclusion. 
• Historically, stocks added to indices outperformed briefly post-announcement. Although recent trend shows minimal outperformance, SMCI and WBA have shown strong trends due to idiosyncratic drivers.

• With 70% of the review period complete, 4 non-constituents are in inclusion zone and 5 constituents are in deletion zone.
• We estimate one-way turnover of 6.5% at the December rebalance leading to a one-way trade of CNY 8.8bn (US$1.2bn). Index arb balances could increase the impact on the stocks.
• The potential adds have outperformed the potential deletes. With multiple days ADV to trade on the changes and the recent short selling clampdown, there could be further outperformance.

• Our valuation analysis suggests a base case implied market cap of 567 billion won or implied price per share of 41,450 won.
• This suggests a 3% upside to the high end of the IPO price range. We would not subscribe to this IPO due to lack of upside.
• Our base case valuation is based on P/E of 18.8x using the company’s net profit of 30.2 billion won in 2023.

• OneStream, the financial software maker and enterprise-focused technology company, set terms for its IPO and plans to raise ~$441M at the midpoint of the range at $18.00 per share.  
• The company was backed by American global investment company KKR, D1 Capital Partners, Investment Group of Santa Barbara and Tiger Global Management.
• The offering is attractively valued vs. peers given 30%+ growth rates at scale and cash flow generation. OneStream shares are expected to list on the Nasdaq next week.

• UL Solutions offers independent testing, inspection, and certification services globally as a newly listed company
• They are the only US-listed player in the TIC industry, making them a valuable investment option for potential compound growth
• With a strong brand and historical roots dating back to 1894, investors see ULS as a potential premium multiple due to their market position, revenue growth, and earnings growth opportunities.

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.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Lenovo

• Intelsat’s secured bonds offer a potential short-term re-rating opportunity due to discussions of a merger with SES
• A merger with SES would benefit Intelsat’s equity owners by de-risking their investment and increasing liquidity for SES
• The Intelsat 6.5% 2030 secured bond could see a significant increase in value if a merger is announced, trading at a yield similar to SES’s <4.5%

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.