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.
• 15wks 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 8wks ago, recommended taking profits.
• Shinko had outperformed Ibiden, gross spreads had narrowed 5+% on JSR approval. Spreads are now 3.6% wider than at narrowest, but gap risk has widened as Shinko outperforms, Ibiden.

• A-Shares only two days of the week and were up small Monday and Tuesday. H-shares took a breather Wednesday after trailing A-shares, then rallied hard on Thursday and Friday. 
• Net SOUTHBOUND buying was +HK6.0bn. Net buys every day and now 22 days straight, but buying still appears foreign-led price-taking action. 
• The only big news this week in China/HK was probably the Politburo’s new stance of trying to do more for the mainland property market, concentrating on unsold homes. 

• I have received several questions from readers on Ascendent’s binding proposal for Hollysys Automation Technologies (HOLI US) in the context of the current gross spread of 12.1%. 
• The questions primarily concerned the Capital Forum article, NSR approvals, timelines, auditor resignation and deal break risks. 
• Most of the questions concerned regulatory approval risk. The delay in closing is mainly procedural (government red tape) rather than an indication that regulators will block the deal. 

• Q124 revenues of $3.79 billion, pretty much flat sequentially both QoQ and YoY, and also marginally better than guidance.
• Looking ahead, the company forecasted Q224 revenues $3.8 billion, i.e. flat QoQ. Still no full year 2024 outlook
• Technology transitions such as GAA, Backside Power, molybdenum replacing tungsten & the rise of generative AI will all be growth drivers in 2025 & beyond 

• In 1Q24, it was reported that the revenue growth was -3.35% QoQ, slightly exceeding our expectation of a 5% QoQ decline.
• For 2Q24, revenue is expected to grow, but the increase is projected to be less than 5% QoQ.  
• NVIDIA revenue in KYEC is forecasted to reach 15% by the end of 2024F, up from about 2% in 2023, driven by the increasing demand for AI.

• TBO Tek (0395045D IN) is looking to raise approximately US$200m in its upcoming India IPO.
• TBO Tek is a global travel distribution platform. Its two-sided technology platform serves companies involved in the travel industry such as hotels, airlines, travel agencies and travel management companies.
• In this note, we provide a summary of its RHP updates and share our quick thoughts on valuation.

• Following Exxon Mobil (XOM US)‘s acquisition of Pioneer Natural Resources (PXD), Vistra (VST US) will be added to the S&P 500 INDEX (SPX INDEX) at the close on 7 May.
• Marathon Digital Holdings (MARA US) is an add to the S&P SmallCap 600 Index and the stock could move higher till implementation.
• Marathon Digital Holdings (MARA US) stock has underperformed its close peers this year and the ratio of Marathon Digital Holdings stock price to Bitcoin (XBTUSD CURNCY) is near the lows.

• Alphabet Inc. reported a strong first quarter in 2024, fueled by robust performance from its search engine, YouTube, and cloud businesses.
• The company’s annual revenue grew from $100 billion to over $300 billion in six years.
• It predicts that YouTube and Cloud will reach a combined annual run rate of more than $100 billion by the end of 2024.

• Intel Corporation has exhibited sturdy Q1 outcomes, with revenue delivery being on par and the Earnings Per Share (EPS) exceeding the set guidance.
• This demonstrates the company’s growth in revenue generation and effective cost management strategy.
• However, the trends for the first half of the year were moderately weaker than originally forecasted, triggered by some near-term supply constraints.

• KLA Corporation reported its Q1 2024 earnings call, where its performance indicates a blend of promising and challenging factors.
• The company’s revenues for the quarter noted a solid $2.36 billion, surpassing its guidance range midpoint.
• Further, its exit from the flat panel business contributed to elevated EPS results on both non-GAAP and GAAP fronts, surpassing the adjusted midpoint guidance issued on March 18.

• Microsoft’s Fiscal Year 2024 Third Quarter Earnings revealed that Microsoft continues to leverage and further deploy artificial intelligence (AI) initiatives and solutions through its cloud ecosystem.
• It underscores Microsoft’s strategic direction in intensifying its capabilities in artificial intelligence and cloud infrastructures based on market needs, with Satya Nadella, Chairman and Chief Executive Officer of Microsoft, pointing out the continuing success of Microsoft Cloud surpassing $35 billion in revenue, a growth of 23%.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• T-Mobile US has demonstrated impressive performance in its Q1 2024 earnings, showing continuous growth and advancing its guidance for the year.
• A key highlight is that the company’s postpaid phone net additions are consistent with the same period last year, even as the industry’s net adds have reduced by a double-digit percentage.
• This shows that T-Mobile’s best network value proposition is popular among customers, as evidenced by the growth in postpaid phone gross adds over the past four quarters and record-low Q1 postpaid phone churn.

• We continue to view the latest pullback as healthy/normal within the ongoing bull market, and it is quite possible that the lows have been established on MSCI ACWI (ACWI-US).
• Upgrading EM to Market Weight; MSCI Emerging Markets, China (shanghai Composite) and Hong Kong (Hang Seng) Still Bottoming; we discussed buying in our February 23, 2024 Int’l Compass
• Commodities all appear to be rolling over near resistance, which is what we discussed to watch for in our April 18, 2024 Int’l Compass. This has bullish implications for ACWI

• Darktrace shares rallied ~64% in 2024 after the company raised FY24 revenue, adj. EBITDA guidance and Thoma Bravo offered 620 pence/share in cash to take Darktrace private.
• The acquisition is expected to complete during 3Q or 4Q of 2024. The cybersecurity unicorn has delivered revenue growth at scale coupled with solid profitability and cash flow generation.
• I maintained a bullish view on the undervalued stock and initiated coverage of Darktrace on January 11, 2023, with a 497p price target as steep discount was unjustified.

• Teradyne, Inc delivered first quarter 2024 financial results that exceeded its revenue, gross margin and earnings guidance ranges, led by stronger than projected performance in Memory and System on a Chip (SOC) driven primarily by AI applications.
• Teradyne capitalized on the impact of AI in networking as well as in Edge AI applications like Advanced Driver Assistance Systems (ADAS), with AI applications driving over 40% of memory shipments in Q1.
• Nonetheless, the mobile sector was weaker than expected for the same period, but the company’s Robotics business met its plan for a third consecutive quarter.

• Xiao-I (NASDAQ: AIXI) is leveraging its experience as a chatbot provider to establish itself as a provider of AI models, principally in China.
• The company is focused on commercializing products in the consumer, marketing, and banking sectors in 2024 and exploring international expansion opportunities.
• The company is competing with some of the most successful companies in China for mindshare in AI markets.

• Tyler Technologies’ Q1 2024 results started the year on a positive note, surpassing key metrics expectations including revenues, earnings, operating margin, and cash flow.
• Recurring revenues grew nearly 9% and comprised 84% of total revenues.
• The company also saw robust public sector demand supported by healthy budgets.

• EB is continuing with its efforts to become a marketplace for events after reporting more than 24 million tickets were sold in the first quarter.
• EB has been trying to win back paid creators after many left the platform last year due to higher costs for events on EB’s marketplace
• While revenue was in line with consensus estimates, EB reported its third consecutive quarter with gross margin above 70 percent

• Cognyte Software provides mission-critical software for intelligence and law enforcement globally
• Trades at around 1.4x NTM Sales, down over 75% from spin-off price but has growth potential
• Operates in a grey zone at times, refusing to sell to certain countries but serving democratic governments with analytic tools for investigative and threat intelligence.

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.

1Spatial’s FY24 results reflected robust momentum for the enterprise business and continued improvement in the revenue mix, with investment in growth suppressing margin and cash generation. This investment phase will continue in FY25 to lay the foundation for transformational growth from 1Streetworks and in the US in the coming years. Our scenario analysis indicates the upside from successful execution is significant, with further wins for 1Streetworks and in the US being the key catalysts for more rapid, operationally geared growth to be priced in.

• Wrkr Ltd (ASX:WRK) offers compliance solutions for Australian superannuation contributions and payroll including member onboarding, super payments, messaging and employee validation.
• WRK has reported a record quarterly cash receipt in Q3 FY24, +76% on the previous corresponding period (pcp) and +46% on Q2 FY24, boosted by a first-time contribution from Hong Kong, Link milestone payments relating to the Superannuation Clearing House (SCH) and the timing of client payments (from Q2 into Q3).
• Operating cash flow as a result was +$465k for the quarter, also the highest on record.

• Weibo (9898 HK) is an inexpensive profitable large social media company in China
• Weibo generates a large cash flow which it uses to pay a 9% dividend yield
• Weibo has synergies with Alibaba’s core e-commerce business and fits well within its other media company ecosystem

• Qualcomm’s latest earnings came in at the high end of guidance with automotive revenue surging and mobile steady. We analyze QCOM results’ key implications for Mediatek.
• Qualcomm’s 2024E global handset market volume guidance remained unchanged vs. last quarter; however we believe Mediatek may have taken some market share in CY1Q24.
• Qualcomm confirmed Mediatek’s view regarding high-end phone demand strength right now, with AI capabilities the likely driver. Combining QCOM + Mediatek color suggests an AI-driven handset upgrade cycle ahead.

• Geopolitical shifts are impacting Taiwanese businesses in China, leading to strategic adjustments and shifts in orders to specialty IC foundries.
• CHPT anticipates a surge in probe card orders in the second half of 2024, while SK Hynix expects high demand for HBM in 2025 with production nearly sold out.
• Meredot’s technology allows for micromobility vehicles and robots to charge wirelessly simultaneously, while Taiwan’s Compal will have its first foreign CEO in the electronics industry.

• On 2 May, Jusung Engineering (036930 KS) announced an equity spin-off as well as a physical division split.
• We are negative on this combination of equity spin-off and physical division split of Jusung Engineering. 
• After the two units are listed on 6 December 2024, it is likely that the semiconductor unit (Jusung Engineering Co) will rise while Jusung Holdings Co is likely to decline.

• Lam Research Corporation delivered a strong start to 2024, with the Q1 earnings surpassing the midpoint of their guidance.
• Although the business environment prospers as predicted, the company acknowledges ongoing risks and uncertainties reflected in SEC public filings.
• The quarter witnessed stability in Lam’s overcall 2024 revenue profile, with spending mainly driven by lithography shipments into China and enduring investment in domestic China.

• Meta Platforms Inc.’s Q1 shows strong headway with an increase in both product momentum and business performance reaching an estimated 3.2 billion active users per day, showcasing healthy growth particularly in the US market.
• The performance of the associated messaging app, WhatsApp, has been highlighted, reporting a steady increase in daily active users and message sends in the US. Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Fiserv has started the year on a high note.
• This promising start was partly due to strong financial performances characterised by a 19% rise in adjusted earnings per share and a 7% increase in adjusted revenue growth.
• Remarkably, this positive performance enabled the company to lift their adjusted earnings per share outlook to a range of $8.60 – $8.75 from the former range of $8.55 – $8.70, signalling anticipated growth of 14% to 16%.

• International Business Machines Corporation’s Q1 2024 earnings demonstrated the company’s solid performance with good financial results across revenue and cash flow.
• These results indicate the quality of the company’s portfolio and its hybrid cloud and AI strategy.
• The software division performed well, with infrastructure showing strength.

• ServiceNow had a strong first quarter in 2024, outperforming guidance on all top-line and profitability metrics.
• The company’s subscription revenue grew by 24.5% year-over-year on a constant currency basis.
• Current remaining performance obligations (CRPO) rose by 21% year over-year in constant currency, which was above the company’s guidance.

• Spotify’s first-quarter 2024 earnings were marked by strong growth and a shift towards monetization and efficiency in operations.
• The company demonstrated solid performance with robust revenue growth, ongoing expansion in gross margin, and the most significant operating income to date.
• Spotify’s continued focus on increasing revenue while improving the bottom line resulted in an encouraging quarterly performance that exceeded expectations.

• Q124 revenues of $5.5 billion, $100 million above the guided midpoint, down 11% QoQ but up 2% YoY.
• Looking ahead, AMD forecasted the current quarter revenues of $5.7 billion, up 3.6% sequentially.
• Share price down 7% in AH and down 35% from its recent 52 week high. We could see it retest the $100 level in the coming months

• Now that Meta, Alphabet, Microsoft, and Amazon all reported their quarters, we now have better context to how their quarters went.
• So, while I will mostly discuss Amazon’s earnings in this update, I will briefly touch on some broader themes as well.
• Overall revenue was slightly below the high end of Amazon’s guidance.

• With the review period complete, there could be up to 15 changes for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the June rebalance.
• Even with 15 changes, there is some sector balance among the potential adds and deletes with big churn in the Information Technology sector.
• The potential adds have outperformed the potential deletes and the KOSDAQ 150 Index (KOSDQ150 INDEX) since the start of the review period but performance has flattened over the last month.

• With the review period complete, there could be up to 5 changes for the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) at the June rebalance.
• Hahn&Co now own over 96% of the shares in Ssangyong Cement Industrial (003410 KS) and there could be another change at or before the June rebalance.
• Passive trackers will need to trade between 0.5-15x ADV on the index changes. There are big shorts in L&F (066970 KS) and Lotte Tour Development Co, Ltd. (032350 KS). 

• The key to Ximalaya turning losses into profits is not the outstanding performance in revenue side, but rather the effective cost control. The Company seems to have encountered growth bottleneck.
• To achieve long-term stable profits, it’s necessary to continuously optimize content quality, improve user experience, and expand paying user scale, but Ximalaya has shown “signs of fatigue” in this regard. 
• AI technology brings big room for imagination, but the question here is how much would truly translate into a leap in financial performance? Ximalaya’s valuation could be lower than peers.

• Spectur Limited (ASX:SP3) is a surveillance technology company providing security, safety, environmental monitoring and visual AI solutions to watch and act on assets managed by its platform.
• The company develops, manufactures and sells solar- and battery-powered, remotely-connected hardware, which is driven by SP3’s firmware, software, cloud and web-apps, providing data and solutions to its customers.
• Spectur has reported a 35% increase in Q3 sales revenue to $1.261m on the previous corresponding period (pcp) (ASX release 26 April).

Esker reported FY23 results in line with our expectations. Revenue grew 12% (14% constant currency) while inflationary effects and sales commissions on bookings outperformance in H223 resulted in operating profit declining 16% y-o-y. The high level of contracts signed towards the end of FY23 provide good support for revenue growth in FY24 and FY25 and measures taken by management to improve productivity should drive margin expansion over our forecast period back into the company’s target range of 12–15%.

• Investment opportunity in Kin and Carta (KCT LN) based on bumpitrage strategy
• Apax may increase bid by 20% or more, potentially leading to further upside
• Estimated downside of around 4% if Apax does not offer topping bid, with BC offer likely to proceed

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.

MotorK’s FY23 revenue growth was robust across most regions, with slow growth regions gaining momentum. Q124 revenue fell slightly year-on-year due to delayed delivery contracts, but these are expected to contribute to Q2 sales. Revenue quality improved, with software-as-a-service (SaaS) recurring revenue rising as a share of group revenue in FY23. M&A continues to play a pivotal role in unlocking opportunities across MotorK’s markets, providing potential average contract value (ACV) expansion from customers migrating to the platform. While personnel investments for growth swung EBITDA to a loss, MotorK’s holistic SparK platform remains well-positioned to capitalise on the automotive industry’s digital shift and technological innovation.

Vection’s Q324 update showed strong double-digit growth in revenue and cash receipts, driven by multiple contract wins, including its largest contract to date with an existing defence customer. A swing to positive operating cash flow in Q3 (A$4.1m), coupled with contract wins, validates the company’s streamlined sales structure, designed to bolster operational efficiency. Cash generated also supported a quarter-on-quarter reduction in debt. Management is seeing early positive signs by enhancing the platform’s compatibility with Apple Vision Pro, potentially unlocking a key growth avenue from rising enterprise adoption among large global players.

• AI server cooling options include liquid & air solutions to improve efficiency and performance.
• India is set to introduce a new chip incentive package to boost its semiconductor industry.
• Apple’s supply chain expansion in Southeast Asia, especially Vietnam, has been significant, while MediaTek aims for 30% market share in China with upcoming flagship SoC.

• In this insight, we discuss the alpha generation through companies that announced share buybacks in Korea in March and April 2024.
• We provide a list of 30 stocks in the Korean stock market that have announced share buyback programs in the past two months.
• Major companies that have announced share buybacks in Korea in the past two months include Krafton (259960 KS), Celltrion Inc (068270 KS), and Woori Financial Group (316140 KS).

• Samsung 1Q24 results beat consensus by a wide margin and the company gave strong guidance for its Memory segment, guiding for further strength driven by servers, PCs, & phones needs.
• Guided strong demand for PC/Mobile Memory in 2H24E driven by on-device AI, which supports the case of edge AI hardware beginning to drive demand in addition to cloud/server-based AI hardware.
• Foundry segment’s losses reduced, but still loss-making? Samsung’s order backlog is at an all-time high but Samsung Foundry results suggest manufacturing yield performance likely well behind TSMC.

• Branded PC makers’ shares have been mostly lower in April, however Intel and Microsoft developments are providing strong signals for a future PC upgrade cycle into AI PCs.
• Over 60% of Fortune 500 companies are now using Microsoft’s CoPilot AI assistant; Intel expects the industry to exceed its prior forecast for AI PC shipments in 2024E.
• CoPilot is the killer app that will trigger a global enterprise PC upgrade cycle; The next generation of CoPilot will be an edge AI app that will require powerful hardware.

• Under Mohit Joshi’s leadership, Tech Mahindra (TECHM IN) targets a 15%+ EBIT margin and revenue growth surpassing industry averages by FY2027, with a focus on operational reform and portfolio integration.
• Project Fortius aims to achieve $250 million annual cost savings over 3 years, emphasizing high-margin services and organic growth, signaling a departure from  reliance on traditional acquisitions.
• This strategic shift towards operational efficiency and organic growth alters the company’s outlook, positioning Tech Mahindra for sustainable growth and shareholder returns, underlining a commitment to long-term value creation.

• TBO Tek (0395045D IN) is looking to raise approximately US$200m in its upcoming India IPO.
• TBO Tek is a global travel distribution platform. Its two-sided technology platform serves companies involved in the travel industry such as hotels, airlines, travel agencies and travel management companies.
• In our previous note, we talked about the company’s historical performance. In this note, we talk about its refiling updates and undertake a peer comparison.

• 1Q24 sales reached 96% of 4Q23, the recent low of sales, but GM upside 1% QoQ.   
• Demand is gradually picking up in 2Q24F, but inventory adjustments for industrial and automotive applications are ongoing.  
• Specifically speaking, in 2Q24 we expect to see a revival in demand, with QCOQ and MPS potentially beginning to place orders in Fab 5.

• Visa’s Fiscal Second Quarter 2024 Earnings indicate that Visa appears to be standing on solid financial ground with plenty of room for growth.
• The leading global payments technology company recorded $8.8 billion in net revenue for the quarter, marking a 10% increase.
• Its GAAP Earnings Per Share (EPS) rose by 12%, while non-GAAP EPS also saw an upward movement by 20%.

• Texas Instruments (TI) reported a first quarter of 2024 revenue that met expectations, despite witnessing a 10% sequential and 16% year-over-year decrease to $3.7bn.
• Revenue declined across all of its end markets as customers continued to pare their inventory levels.
• In terms of individual revenue components, Analog revenue declined 14% year-over-year, Embedded Processing declined 22%, and the Other segment declined 33% from the year-ago quarter.

• SmartRent aims to increase their market share in the smart home solutions industry, specifically in the multifamily real estate sector in the US
• They leverage their innovative Smart Home Operating System to lower costs for landlords and increase revenues through enhanced property management capabilities
• SmartRent’s three business lines offer a comprehensive and scalable solution for property owners, with a focus on professional services, hardware sales, and hosted services to capitalize on the growing demand for smart home technologies in the real estate market.

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.

• Mimasu Semiconductor Industry (8155 JP) recommended a pre-conditional tender offer from Shin Etsu Chemical (4063 JP) at JPY3,700, a 14.4% and 35.4% premium to the last close and undisturbed price, respectively. 
• The pre-condition, which cannot be waived, is approval under the competition laws of Japan and Taiwan. The tender offer is expected to start in late July.
• While the offer is below the mid-point of the IFA DCF valuation range and the requested price, it is 7.7% higher than the all-time high of JPY3,435. This is done. 

• Apple diversifies supply chain, focusing on Southeast Asia, led by Vietnam, while also shifting suppliers in India.
• MediaTek plans to boost market presence and R&D in India, targeting 30% market share in China by 2H24 with Dimensity 9400 SoC.
• US probe into China’s RISC-V role could impact Samsung’s AI chip ambitions, while STMicroelectronics aims for 100% renewable electricity by 2027.

• Taiwan Semiconductor Manufacturing Company’s (TSMC) Q1 2024 earnings presented several key details about the firm’s current market standing and future performance.
• For Q1 2024, they reported a 5.3% sequential decrease in revenue due to the impact of smartphone seasonality despite strong demand in high-performance computing (HPC).
• Gross margin was also up to 53.1%, reflecting product mix changes, and the firm’s operating margin increased to 42%.

• ASML Holding N.V., a Europe-based semiconductor company, reported its 2024 first quarter financial results in a recent conference call.
• Notably, the total net sales for the period were EUR 5.3 billion, matching the midpoint of the company’s guidance.
• The company shipped 12 EUV systems and recognized revenue from 11 such units, amounting to EUR 1.8 billion in revenue.

• Cadence demonstrated a robust start to 2024 with a strong first quarter that exceeded its guidance range on all critical financial metrics.
• Due to this exceptional performance, Cadence is increasing its financial outlook for the year.
• Cadence finished the first quarter with an unexpected record backlog of $6 billion, placing the company in a strong position for the remainder of 2024 and beyond.

• We have been of the opinion that tokenized real world assets (RWAs), especially tokenized debt will represent a more understandable underlying value of tokens or cryptocurrencies than Bitcoin.
• We are positive on tokens backed by risk-free assets such as US Treasuries or even investment-grade bonds as rates products for crypto funds and fractional investments for retail investors.
• Private debt could be the next in line to enjoy mass adoption if the legal elements and credit protection have been put in place to gain trust of institutional investors.

• Verizon reported a solid start to the fiscal year, with its demonstrated financial and operational performance primarily driven by its strategic focus and the relentless efforts by the company’s entire team.
• The company achieved momentum across different segments, with Verizon’s Consumer business demonstrating significant improvements.
• It saw an upturn in the postpaid phone net adds and marked another sturdy quarter of growth in the broadband subscriber base, indicating that the Consumer business is expected to contribute positively to the net adds this year.

• Thoma Bravo offers to acquire Darktrace (DARK LN) for $7.75/share in cash, 19.6% premium, 44.3% premium to 3-month VWAP, 148% to IPO price, 6.2x EV/Fwd NTM Revenue, 26.8x EV/Fwd NTM EBITDA.
• Irrevocable undertakings total 14.4%. Darktrace’s innovative technology aligns well with existing offerings in the cybersecurity ecosystem, making it a potential target for acquisition by a larger, established vendor.
• I think the proposed price is fair and see the take-out as a strong result for Darktrace shareholders. I believe the deal will close. Gross spread is 2.3%. Long.

• Nokia Corporation reported its first quarter 2024 results, which showed a decline in net sales by 19% year-on-year in constant currency.
• This decrease was due to the weak spending environment present since the second quarter of last year.
• The profit of Nokia’s three network businesses was affected by this trend, but this was counterbalanced by the benefits of deals signed in Nokia Technologies and ongoing cost reductions.

• SAP’s Q1 2024 showcased a solid beginning towards their longer-term growth goals.
• The company realized its targets of scaling up revenue and profitability for this period.
• Key metrics for Q1, such as the current cloud backlog grew by 28% to €14.2 billion, and cloud revenue increased by 25%, reaching €3.9 billion.

• MBK Partners will launch a tender offer for ConnectWave from today to May 24th. The target volume is 16.6M shares (40% of SO) at ₩18,000 per share, a 15.6% premium.
• MBK commits to acquiring all tendered shares, regardless of subscription rates, in order to expedite the delisting process. So, there is no cancellation or allocation risk.
• ConnectWave’s retail investor base, with high entry prices, may hinder reaching 70% of the target volume. Absence of risks suggests considering buy positions for potential secondary tender offer.

• After the market close on 26 April, it was reported that MBK Partners has launched a tender offer of a 29.61% stake of Connectwave (119860 KS).
• The tender offer price is 18,000 won, which is 15.6% higher than the closing price (15,570 won) of the company on 26 April.
• The tender offer period is from 29 April to 24 May. The amount of the tender offer is about 300 billion won. 

• TSMC: Premium Soars to +15.2%, Good Level to Consider Shorting the Spread
• UMC: Spread Bounces from Lows to Relatively Extreme High of +1.9%; Good Level to Short
• ASE: Spread Soars to Near All-Time High of +15.5%; Consider Shorting the Spread

• Mediatek Enjoying a Massive Rebound for its Mobile Phone Segment; Most Optimistic About High-End Smartphone Demand
• New AI Data Center Growth Driver on the Horizon; Recent Investment in U.S. AI Server Chip Startup
• Recent Share Price Dip is an Accumulation Opportunity; We Rate Mediatek as a Structural Long

• Taiwan Tech Rebounds Sharply Alongside Major Nvidia/U.S. Tech Rebound Last Week. Wave of Major Earnings Releases This Week — See Our Key Events Section.
• Apple’s Latest Supplier List Released Last Week — Nanya Tech, Lotes, and Novatek Dropped. New List Shows Apple Struggling to Diversify from China.
• Apple iOS 18 Will Heavily Feature Edge AI Running Locally on the iPhone for User’ Privacy and Security — We Believe This Could Be a Major Driver of Phone Upgrades

• China announced game approval for the April 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, though the number of approvals appears to be slower than March.
• While Tencent scored zero, Netease got approval for one game.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• On the IPO front, Sichuan Baicha Baidao Industrial (2555 HK) and Mobvoi (2438 HK)‘s listing doesn’t really help the HK sentiment.
• On the placement front, Vodafone Idea (IDEA IN) managed to do well, while Krafton (259960 KS) followed  Samsung Electronics (005930 KS) footsteps.

• Big Tech has been lagging the market since February and the relative performance reset is nearing an end. The overall stock market is undergoing a bottoming process.
• Investment-Oriented accounts should be accumulating positions at these levels, but should be prepared for some near-term choppiness.
• Tactically, we are inclined to overweight value over growth stocks for short-term performance.

• Playtech is recommended as a long investment due to its undervalued status and strong financial position
• The company has divested non-core assets and shifted focus to two profitable segments, including a B2B software and services provider and a leading B2C gaming operator in Italy under the Snaitech brand
• Playtech’s Snaitech segment is considered a crown jewel in its portfolio, with significant market share in Italy and potential for share price to triple over the next 3 years

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

• The last week of SPACs was packed with activity including buyouts, amendments, and terminations.
• A digital mapping firm gets a boost with an acquisition by a Real Estate firm, and a Rare Earth mining-focused firm rejects a buyout from a SPAC.
• Also, a SPAC lowers the valuation of a deal with a biotech firm, and a UK-based blank-cheque firm terminates a deal with an engineering business. 

• Roland DG Corp (6789 JP) has re-recommended Taiyo’s revised offer of JPY5,370, which is 6.7% higher than its previous JPY5,035 offer and 3.3% higher than Brother Industries (6448 JP)’s JPY5,200 offer.
• The Board articulates a compelling case on Brother’s offer dis-synergies, which will help swing some shareholder opinion towards Taiyo (irrespective of the price). 
• Brother could bump, but it would not address the issue of satisfying the condition precedent (non-completion of Taiyo offer) and securing the Board’s recommendation.  

• SK Reports Massive Margin Rebound; Nanya Tech’s Financial Performance Appears Relatively Weak in Perspective
• AI Applications Now Translating Into Rising Solid-State Memory (SSD) Demand
• SK Povided Positive Color for Taiwan PC Names; New TSMC Collaboration Highlights TSMC Strength vs. Samsung

• A shares were up small on the week, largely due to a big rally on Friday (led by record Northbound buying). HK Stocks had a HUGE week. 
• Net SOUTHBOUND buying was +HK10.3bn. Net buys every day and now 20 days straight, but buying was foreign-led.
• Little market news. More geopolitical news. Big SOE bank H-shares see relentless buying. HSTECH +13.4%, HSI +8.8%, HSCEI +9.1%.

• Performance of SU7 so far, margin of EV biz and globalization potential prompted us to take another look at Xiaomi and we like what we saw;
• Xiaomi surprised during the Investor Day by guiding SU7 gross margin of 5-10%. Delivery guidance also surprised to ship 100k units in 2024. 
• We raise EV profitability estimates on margin guidance and expect market share to expand as it expands to SUVs.

• Originally, Brother Industries (6448 JP) wanted to buy Roland DG Corp (6789 JP).  Roland invited others to bid, didn’t tell Brother, then said Taiyo Pacific’s ¥5,035 bid won.
• That was low. Weeks later, Brother lobbed a ¥5,200 overbid. They are going through the approvals process but it isn’t clear Brother is negotiating.
• Taiyo has extended and extended and shown up in interviews. Now it has overbid at ¥5,370.

• Q124 revenue was $12.7 billion, down 17.5% QoQ but up 9% YoY.
• Q224 revenue forecast of just $13 billion & vague promise of full year YoY growth disappoints
• Capacity constraints on wafer level assembly limited Meteor Lake shipments. So much for a maniacal focus on execution.

• Corporations need to adapt to smarter AI as 6G, the next evolution in mobile communication, is coming soon, bringing faster speeds and advanced technology.
• Taiwan’s AI startups showcase cutting-edge B2B solutions at 2024 AI Expo, while Microsoft’s third-quarter revenue reaches a record high with the help of AI technology.
• Despite record high SiPh shipments, LMOC had a net loss in 1Q24. Taiwan’s biggest curved interactive MiniLED display, ‘Wishing Tree,’ steals the show at Touch Taiwan 2024.

• In 2Q24F, customer demand has slowed down in the traditional low season, as inventory levels normalize.  
• In summary, sales in USD are expected to grow in the mid-teens YoY in 2024F. Smartphone growth will be the strongest driver of this growth. 
• MediaTek is a leader in the Wi-Fi 7 market and aims to gain significant market share with its diverse product portfolio this year.

• Despite following Big Tech closely for the last 5 years, this sentence from today’s call still somewhat surprised me!
• The scale and the height of success of Google truly boggles my mind.
• Over the last year or so, Google has had its fair share of skeptics, including yours truly. 

• Regulatory risks could derail TikTok’s drive to become Vietnam’s No. 1 online marketplace, an industry expert said.

• The ByteDance-owned short-video app launched TikTok Shop in Vietnam in April 2022 as part of its broader ambition to control 35% of Southeast Asia’s e-commerce market.

• Since then, it has surpassed Alibaba-backed Lazada to become Vietnam’s second-largest online marketplace by gross merchandise volume — TikTok’s vendors sold about $1.3 billion worth of goods in the past six months, according to local media which cited data from local analytics firm Metric. Now, only Singapore-based Shopee stands between TikTok and the top spot.

• CMG is a small-cap company with a leading market share in the unconventional reservoir space
• They see a significant opportunity for their software and machine learning offerings to help maximize asset value and reduce costs and risks in the energy industry
• Under new leadership since mid-2022, the company has shifted towards a more commercially focused approach and is targeting clean energy opportunities such as carbon capture

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.

• ATNI is trading at approximately 35 percent discount to tangible book value after reporting first quarter results with negative free cash flow and reducing adjusted EBITDA guidance by 4.4 percent.
• ATNI experienced delays in securing government contracts in the quarter and slower process in growing commercial broadband accounts.
• ATNI is forecasting adjusted EBITDA of $190 million to $200 million leading to calculation of positive free cash flow. 

• WEX is a payments company trading at a discount to its historical valuation, with a P/E of 12.5x
• WEX operates in three segments including Mobility and Corporate Payments, with a market cap of $9bn
• WEX’s growth is driven by share gains, technology add-ons, and price increases, making it an attractive investment opportunity

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.