TMT/Internet

• There are a bunch of stocks that have underperformed the Nikkei 225 (NKY INDEX) and their peers and could be deleted from global passive portfolios in August.
• The deletion from passive portfolios will lead to a liquidity event at the end of August where passive trackers will need to sell multiple days of ADV.
• Shorts have been built up on all the stocks over the last few months and the extent of the positioning varies across stocks.

• Nine companies disclosed value-up plans, with four official and five pending disclosures. Initially, these announcements boosted stock prices, but long-term correlations were inconclusive. Yet, shareholder returns notably rose in H1.
• NPS increased stakes in three of the nine recently announced value-up companies. They share traits in value-up trading (large caps & low PBR), potentially guiding our strategy as NPS enters.
• BlackRock’s Hong Kong branch has recently engaged with six Korean asset management firms for potential entrustment of its Asian fund’s Korean investment portion, focusing on the value-up policy.

• Money Forward released Q2 results post market close on Friday. Revenue growth of +41% YoY beat our estimates by 7%.
• We highlight continued solid financial metrics supported by growth in SaaS ARR and in particular mid-sized corporate growth.
• No change to our bullish long-term view on the company. Stock has run up around 11% ahead of earnings but we see further 20%+ upside from here. 

• Energy is scarce, thus, besides renewable energy, energy efficiency should also be the key focus. 
• Wasion Group Holdings (3393 HK) customers have grown from domestic grids to both non-grid and grid domestic as well as overseas customers (Latin America). 
• Despite a 65% YTD return, it is still trading at 11x PER, with a 4% dividend yield, 6x EV/EBITDA, and 1.2x PBR. 

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
• The key stocks mentioned in this regular insight include: Zhongsheng Group (881 HK), Jardine Matheson Holdings (JM SP), FIT Hon Teng (6088 HK), and Hon Hai Precision Industry (2317 TT).

• With 70% of the review period now complete, we forecast 50 changes (the maximum permitted) for the CSI Smallcap 500 Index at the close on 13 December.
• We estimate a one-way turnover of 11.3% at the rebalance resulting in a one-way trade of CNY12.08bn (US$1.7bn). The Information Technology and HealthCare sectors gain at the expense of Industrials.
• The potential adds have outperformed the potential deletes and the CSI Smallcap 500 Index (SH000905 INDEX) since the start of the year with the outperformance gradually picking up.

• DCI Indonesia (DCII IJ) is Indonesia’s leading operator of Tier 4 data centres, which require the highest operational standards, with its main business in co-location services.
• The company has a long track record of growth in both sales and profits, making it more than a concept, with a well-thought-out expansion at its three existing data centres.
• DCI Indonesia is hard to justify on current valuations but has a strong track record on execution with a high pedigree management team and customer base, with backing from Salim.

• Lowya began as an online furniture retailer and is still one of the largest in e-commerce, but limited brand awareness has held it back and sales fell last year. 
• Vega Corporation, Lowya’s parent, is now expanding physical stores and offering omnichannel solutions to fix the problem.
• This makes sense in a market where stores remain preeminent and are likely to remain so.

• In Q1 FY02/25, TECMIRA reported revenue of JPY2.8bn (+53.7% YoY), operating loss of JPY42mn, and net loss of JPY31mn.
• Revenue growth was driven by strong sales of new Nintendo Switch software and first-time consolidation of Wellmira.
• AI & Cloud segment saw significant revenue increase due to AI chatbot services, while IoT & Devices segment grew 2.6x YoY.

• Investment opportunity in MOMO, Chinese ADR trading at 70% of net cash and 5x EPS/FCF
• Core business may be in decline, but management has shown good cost discipline and capital allocation
• Potential for MOMO to return $200m per year to shareholders, offering potential 50% return on investment as a cigar butt investment similar to HUYA success.

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

• There could be 18 changes at the December rebalance with the Industrials sector gaining 3 index spots and the Information Technology sector losing 5 spots.
• We estimate one-way turnover of 3.3% at the rebalance leading to a one-way trade of CNY 22.07bn (US$3bn). There are a lot of stocks with multiple days ADV to trade.
• The potential adds have outperformed the potential deletes. There were ETF inflows last week amid a short selling crackdown as the Third Plenum kicks off.

• Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
• On the IPO front, there were a number of listing in the past week, most of which performed as per our expectations.
• On the placement front, Japan continued to dominate the ECM flows.

• Pateo Connect Technology (PTC HK) seeks to raise up to US$300m in its upcoming HK IPO. The deal will be run by CICC, Guotai Junan, CMBI, Huatai and Citic Securities.
• Pateo Connect Technology (PCT) provides one-stop smart cockpit solutions and intelligent vehicle connectivity solutions. Its smart cockpit solutions enhance driving safety, convenience and connectivity, offering a more intelligent driving experience. 
• It offers OEM customers the flexibility to choose individual software and products or combine various components into a seamless and integrated smart cockpit solution. 

• Coherent Corp. is a maker of optical components with a focus on optical connectivity within GPU clusters
• Predicted 20%+ internal rate of return over a 3-year holding period due to secular adoption trends
• Emphasis on addressing interconnect bandwidth wall issue in data centers to improve data movement speed in relation to compute speeds

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 Toyota Group cross-holding ecosystem is in flux. They started with a small announcement by Aisin (7259 JP) but moves have come fast and furious.
• Apparently minorities are grumbling to the SFC about the low-balled Offer for Asia Cement China (743 HK). And for good reason. The best course of action? Vote against the Scheme.
• Hanwha Corporation (000880 KS) is trading at a steep NAV discount. And the controlling family is making  a partial Offer to gain majority control. 

• I tally 46 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Four new deals discussed this week on Smartkarma: Second Chance Properties (SCE SP)‘s VGO,Shinsung Tongsang (005390 KS)‘s Tender, Rex Minerals (RXM AU)‘s Scheme, and Canvest (1381 HK)‘s possible Offer.
• Key updates took place on Altium Ltd (ALU AU), Pacific Smiles (PSQ AU), Asia Cement China (743 HK), Shanghai Henlius Biotech (2696 HK), and Kfc Holdings Japan (9873 JP).

• 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), Honda Motor (7267 JP), Kokusai Electric (6525 JP) placements; Sanil Electric (062040 KS) and Timee Inc (215A JP) IPOs.
• Event-Driven developments: Canvest Environmental Protection Group (1381 HK), Shanghai Henlius Biotech (2696 HK), Hong Kong Television Network (1137 HK), Rex Minerals (RXM AU), Second Chance Properties (SCE SP).

• Chenqi Technology Ltd., operator of the ride-sharing platform OnTime, closed its first trading day in Hong Kong 3.14% below the offering price, after raising $124 million in its initial public offering.
• Chenqi’s shares closed at HK$33.9 ($4.3) each, recovering from a 14% drop during its debut on the Hong Kong Stock Exchange. The company’s market cap stood at HK$6.92 billion.
• Chenqi, also known as Ruqi Mobility, offered more than 30 million shares at HK$35 each in its IPO, raising a net HK$969 million.

• Endava’s recent fiscal performance and strategic initiatives highlight a dynamic period for the company as it navigates a challenging economic landscape marked by cautious client spending and macroeconomic uncertainties.
• The third-quarter results for the fiscal year 2024 saw a revenue figure of GBP 174.4 million, which represents an 11.8% decrease in constant currency terms year-over-year from GBP 203.5 million.
• This performance was within the expected guidance range but underscored the challenges faced by the technology services sector broadly.

• Marathon Digital Holdings recently reported their first quarter 2024 results, revealing a substantial transformation and strategic reorientation of their business model.
• The company has shifted from primarily an asset-light bitcoin mining operation into a diversified global entity focusing on digital asset computations with a strong emphasis on sustainability and inclusivity.
• A significant highlight of the quarter was Marathon’s acquisition and integration of fully owned bitcoin mining sites, a critical step towards gaining direct operational control and optimizing cost efficiencies.

• nCino, an advanced cloud-based software for financial institutions, has reported its first quarter fiscal year 2025 financial results, showing a year-over-year increase in total revenues to $128.1 million, which signifies a 13% rise from the previous year.
• Subscription revenues, forming 86% of total revenues, grew similarly by 13% to $110.4 million.
• Growth across various sectors of the business, especially in the U.S. enterprise and community and regional markets, contributed to these improved financial metrics.

• TSMC’s June 2024 revenue increased by 32.9% YoY, exceeding expectations with $6.42 billion. 
• It dominates with >62% of the global foundry market share, propelled by AI demand. 
• Expansion into the automotive market and new fabs in the U.S. and Japan highlight TSMC’s growth strategy. 

• Since Elliott Management emerged as a shareholder in SoftBank group last month, the share price has rallied sharply, largely driven by the further appreciation of the Arm Holding share price
• SoftBank management is currently focused on growing its Gen AI investment portfolio and appears to have shelved share buybacks for now, which is likely to disappoint minority shareholders
• Despite the above challenges and the risk of de-rating at Arm, we remain positive on Softbank shares as they trade at a historically high 54%+ discount to the estimated NAV

• Workiva’s financial results for the first quarter of 2024 showcased a generally positive trend with several robust aspects in growth and operating metrics, countered by a cautiously optimistic outlook for the rest of the year.
• The company reported a 17% increase in total revenue and a 20% rise in subscription revenue compared to the same period in the previous year, underscoring a resilient performance in the face of an uncertain economic environment.
• 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.

• Allegro MicroSystems has recently reported their fiscal fourth quarter and full year 2024 results, providing insights into their financial health and future expectations.
• The company managed to surpass its fourth-quarter revenue and earnings per share (EPS) guidance despite facing a challenging macroeconomic environment, highlighting the dedication and efficiency of its team.
• The fiscal year 2024 demonstrated a revenue growth of 8% and an EPS growth of 5%, with notable growth in e-Mobility at 38%, signifying strong market performance and strategic execution.

• Vontier, a prominent player in the mobility infrastructure and technology space, delivered strong performance in the first quarter of 2024, achieving the upper bounds of its core growth guidance while surpassing its profitability targets.
• The company reported a 4% increase in core sales, fueled primarily by volume growth alongside positive pricing impacts.
• Notably, the company achieved a 130 basis point expansion in margins, demonstrating effective execution and financial discipline.

• Credo’s shares have surged over 180% since NVDA’s AI earnings report in May 2023
• Despite being seen as an AI “winner,” Credo’s active electrical cable is losing market position due to networking bottlenecks in data centers
• The upcoming 800G infrastructure ramp could provide opportunities for advanced interconnects, but Credo’s shares are currently priced to perfection

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.

• Power Integrations reported a robust set of financial results for the first quarter, demonstrating resilience and strategic foresight in the face of fluctuating market conditions.
• The company’s revenue for the quarter amounted to $92 million, with a non-GAAP gross margin of 53% and non-GAAP earnings standing at $0.18 per share.
• These figures reflect a stable financial status, attuned to Power Integrations’ strategic market maneuvers and operational efficiency.

• Silicon Labs’ first quarter fiscal 2024 financial results provide a mixed picture, reflecting the ongoing dynamics in the technology sector, particularly in the semiconductor industry.
• Silicon Labs reported a revenue of $106 million for the quarter, which exceeded the midpoint of the company’s guidance and marked a 23% sequential increase.
• This performance underscores some level of recovery, especially when dissected into the contributions from its two primary business units: Industrial & Commercial, and Home & Life.

• Braze, a customer engagement platform, has documented its performance for the first quarter of fiscal year 2025, which indicates mixed outcomes amidst challenging economic conditions.
• Braze reported a revenue of $135.5 million, reflecting a 33% year-over-year increase.
• When adjusted for a $750,000 hiccup due to a service outage in April, the revenue would have been about $136.3 million.

• Soluna Cloud has entered into a three-year managed services agreement with Hewlett Packard Enterprise (HPE), with $38-80 million in expected revenue over the contract, with the first 512 GPUs available today.
• Soluna will manage a hydro-powered datacenter in collaboration with its strategic OEM partner and has secured NVIDIA H100 GPUs that will allow it to offer Generative AI workloads for enterprise customers and Generative AI labs.
• The Soluna Cloud subsidiary has been funded by a non-dilutive $12.5 million credit facility, which the company expects will be the first tranche of funding for the growing business line.

• This block deal has an unusual PSR (price swap return) contract at ₩58,200, the July 10th closing price, likely preventing Netmarble’s typical stock price correction today.
• In 2022, a similar-sized local PSR transaction involved Doosan Bobcat Inc, with 9.9 million shares and a PSR swap price of ₩37,500.
• As for Doosan Bobcat, the stock initially dropped but rebounded near the PSR swap price, prompting local brokerages, focused on PSR fee income, to sell rather than realize capital gains.

• June 2024 revenues of NT$207.87 billion, a decrease of 9.5% MoM but an increase of 32.9% YoY
• Q224 revenue of US$20.9 billion, $457 million above the high end, up 10.5% QoQ and up 33.7% YoY. It was also TSMC’s highest revenue quarter ever
• At NT$1,266,154 (around US$39 billion), TSMC’s YTD revenues are up 28% YoY, well in line with the company’s forecast for a >20% YoY increase in 2024.

• Taiwan Semiconductor (TSMC) – ADR (TSM US) could reach a growth rate of 25% YoY this year, with a very promising outlook for 2025.
• Artificial Intelligence (AI) remains the primary focus, with plans to continue expanding capacity in 2H24 and 2025.
• The demand from Apple (AAPL US) is expected to drive higher growth in 2H24.  

• Onshore Equity ETF flows in China continued to be positive for 8th week. Southbound Connect flows in July are lower than June.
• Baidu, Bilibili and GDS have had positive share price moves on the back of news flow.
• The container shipping segment has had a sharp pullback on positive Middle East news and cement maker CNBM flags a loss in the first half.

• Stable, Steady, State-owned Enterprise with upside from policy push on AI
• Lowly rated company with a new cyclical growth story in a strategic sector
• Good balance sheet with the opportunity to raise payouts and yields.

• Wolfspeed, a leading vertically integrated silicon carbide company, shared its fiscal Q3 2024 results, emphasizing accomplishments in operational performance yet acknowledging the market’s undervaluation of its potential.
• A key point of focus was their Mohawk Valley facility’s substantial progress towards increasing utilization and revenue generation.
• Facility enhancements and strategic shifts in production capacities were regularly discussed, reflecting an agile response to market demands, particularly within the electric vehicle sector.

• Fabrinet Q3 of Fiscal Year 2024 reflects a robust performance exceeding its own forecasts with a notable increase in revenue and earnings per share (EPS).
• The company reported a record revenue of $731.5 million, representing a 10% year-over-year growth and a 3% sequential increase from the previous quarter.
• Non-GAAP EPS was also impressive at $2.39, marking a significant rise from previous periods and exceeding the guidance provided by the company.

• Rambus Inc. delivered favorable results for the first quarter of fiscal year 2024, demonstrating resilience and strategic agility amid varied market conditions.
• A pivotal aspect of Rambus Inc.’s growth strategy involves diversifying its product offerings, including the expansion into DDR5 server Power Management Integrated Circuits (PMICs), which complements its existing memory interface chips.
• This development is well-timed, as the industry increases demands for enhanced memory performance driven by applications like AI.

• In FY03/24, revenue grew 15.1% YoY to JPY27.9bn, operating profit increased 19.6% YoY to JPY5.2bn, recurring profit increased 19.3% YoY to JPY5.4bn, and net income attributable to owners of the parent increased 19.0% YoY to JPY3.3bn.
• In the EC Solutions business, revenue increased 16.7% YoY to JPY15.6bn, and recurring profit rose 17.8% YoY to JPY4.0bn, mainly due to growth in revenue from e-commerce site development and e-commerce cloud services.
• In the IT Solutions business, revenue grew 12.7% YoY to JPY12.5bn and recurring profit rose 8.2% YoY to JPY2.8bn owing to higher revenue from IT cloud services and security and infrastructure construction.

• Viavi Solutions, a prominent network testing company, recently disclosed its financial results for the third quarter of Fiscal Year 2024, revealing mixed outcomes in a challenging market environment.
• The company reported a total net revenue of $246 million, marking a modest year-over-year decline of 0.7% and a sequential drop of 3.3%.
• This revenue, although slightly above the lower end of their forecasted range, underscores the cautious spending patterns observed across several of its customer segments, particularly within enterprise solutions.

• Today post-close we got confirmation of yesterday’s Reuters scoop of a secondary selldown on Kokusai Electric (6525 JP) after the stock fell 7.2% in heavy volume.
• KKR HKE LP and KSP Kokusai LLC (Koch) will together sell 52.5mm shares plus another 7.8mm+ in the greenshoe. Split is 50/50 domestic/international. 
• This is 60+mm shares against 51mm shares held by non-passive holders ex-Capital (who has been selling). It’s a lot of stock at a high price.

• KKR and KSP Kokusai will offer 52.51m-60.38m shares (US$1.76bn-2bn) of Kokusai Electric (6525 JP) in a secondary offering that will likely be priced on 22 July.
• Kokusai Electric (6525 JP) will also buy back up to JPY 18bn of its shares. At the last close, that is 3.33m shares (1.2x ADV).
• Trackers of one global index will buy stock at the time of settlement of the shares. The (much) bigger buying will come at the end of August.

• Wiwynn Corp (6669 TT) is looking to raise around US$850m in its global depository receipts (GDRs) 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.
• In this note, we run the deal through our ECM framework and comment on deal dynamics.

• Kokusai Electric (6525 JP) has announced a secondary offering of up to 60.4 million shares (including overallotment). At the close, the offer, including overallotment, is worth JPY326 billion (US$2.0 billion).
• The secondary offering facilitates KKR and KSP Kokusai Investments’ ability to crystallise substantial IPO gains—the shares are trading at 3.2x the IPO price of JPY1,840.
• Looking at recent large Japanese placements is instructive for understanding the potential offer price. The pricing date will fall between 22 and 24 July (likely 22 July).

• TSMC June Sales Surge Higher Than Expectations; Apple Will Be Use TSMC’s 2nm Node for Next Year’s iPhone 17
• Wiwynn GDR Offering – US$1.45bn Dilutive Offering, but Momentum Has Been Very Strong 
• Silergy (6415.TT): Trial-Run with Vanguard, and Recent Stock Drops Represent an Entry Opportunity. 

• The review cutoff date for the September rebalance of the HSIII was 28 June. The changes will be announced on 16 August and become effective after the close 6 September.
• There could be 3 changes to the index with some inclusions driven by potential addition to the Hang Seng Composite Index. That could lead to buying via Southbound Stock Connect.
• Capping will result in passives buying Kuaishou Technology (1024 HK) and JD.com (9618 HK) while selling Meituan (3690 HK) and Tencent (700 HK).

• In this insight, we discuss a trading strategy for Shift Up which starts trading on 11 July. Shift Up is one of the most anticipated IPOs in Korea this year.
• Our base case (6 months – 1 year) target price of Shift Up is 95,510 won, which is 59% higher than the IPO price.
• We recommend investors to take some profits (about 50% of invested capital) if the share price shoots higher by 100% or more from the IPO price on the first day.

• TSMC: +15.1% Premium; Will It Break Down to Lower Past Trading Levels?
• UMC: +2.4% Premium; Can Consider Shorting This Historically High Level
• ChipMOS: -3.1% Discount; Long The Spread Given Historically Extreme Discount

• KKR & Co (KKR US) and KSP Kokusai Investments are looking to raise approximately US$1.7bn through an extended secondary follow-on offering, selling approximately 52.5m shares of Kokusai Electric (6525 JP)’s stock.
• The deal is a large one to digest at 19 days of three month ADV.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Doug O’Laughlin: Today, on Fabricated Knowledge, I have the privilege of having Wes from Applied Digital on to talk about Applied Digital.
• Today, we’re gonna talk about the change in his business model. The company is experiencing a lot of changes, and there are a lot of new things in the pipeline.
• And so I just wanted to sit him down and have an opportunity to chat about that. 

• Today, a Reuters article came out saying that KKR would sell down half its 43% stake in Kokusai Electric (6525 JP) according to “two people familiar with the matter.”
• The article also said Kokusai Electric would buy back shares. Kokusai responded with a TDNET release saying “we did not release this info but we are considering various capital policies.
• It pays to look at the Shareholder Structure as it stands. This is bigger than it looks. 

• Reuters reported that KKR & Co (KKR US), the largest Kokusai Electric (6525 JP) shareholder, plans to sell about half of its 43% stake, worth around JPY300 billion.
• As Kokusai’s shares are trading at 3.2x the IPO price of JPY1,840, KKR would be tempted to reduce its stake further. The 180-day IPO lock-up period expired on 22 April.
• Kokusai anticipates a return to growth and margin improvement. However, Kokusai trades at a material premium to peer multiples and is fully priced. 

• Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
• In the last few days, SUNWELS Co (9229 JP) and Macbee Planet (7095 JP) have announced their moves to TSE prime which would eventually trigger a TOPIX Inclusion event.
• Macbee Planet was in our highest conviction list but SUNWELS Co was not. In this insight, we have made some modifications to our methodology to improve future hit rates.

• Micron Technology recently provided insights into their fiscal third quarter 2024 performance, shedding light on various strategic and operational aspects that investors may find critical in shaping their investment thesis.
• Amid a challenging global semiconductor landscape characterized by rapid technological advancements and fluctuating demand cycles, Micron appears cautiously optimistic about the future, driven by strategic investments and a focus on high-margin products.
• 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.

• Shift Up (462870 KS) raised around US$320m in its South Korean IPO, after pricing at the top.
• Shift Up is a South Korean games developer, which as released three games so far for the global markets.
• We have looked at the company’s performance and valuation in our earlier notes. In this note, we talk about the trading dynamics.

• NetDragon’s stock is priced at 11.0 HKD with 531 million shares and a market cap of 5,870 HKD
• Company completed a reverse merger listing for its education business, causing some complications, but gaming business is seen as a hidden gem with growth potential
• NetDragon, operated by the Liu family, has a history of successful business incubation and has returned around 50% of its market capitalization to shareholders in the past three 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.

• ARLO announced it had reached 4 million paid accounts approximately four months after achieving 3 million paid accounts. 
• The pace of growth is most likely the result of catch-up calculations related to Verisure. However, this should not take away from the magnitude of increase in the number.
• The higher baseline of subscriber numbers should change the annualized recurring revenue (“ARR”) for ARLO compared to the end of the first quarter.  

• Cirrus Logic has presented its financial results for the fourth quarter and the entire fiscal year 2024, revealing mixed outcomes that highlight both challenges and growth opportunities.
• The company reported a fourth-quarter revenue of $378.1 million, surpassing the upper edge of the guidance range.
• This surge was attributed to an unexpected rise in demand for smartphone components.

• Accenture’s latest financial results highlight a dynamic and multifaceted performance.
• The fiscal year has seen client spending patterns diverge from initial expectations, with a clear preference for large-scale transformations over smaller, discretionary projects.
• This shift has led to slower revenue conversion and delayed decision making, necessitating a strategic pivot by Accenture.

• BILL reported strong fiscal third quarter 2027 results, highlighting robust revenue growth and significant expansion in non-GAAP operating income.
• Revenue increased by 19% year-over-year, driven by high transaction volumes and an effective monetization strategy.
• The reception of their financial management solutions among small businesses remains vigorous, as evidenced by the processing of over 25 million transactions amounting to more than $70 billion during the quarter.

• Telecom companies are traditionally “easy” to value. They have assets, debt, depreciation, earnings, cashflow. Lots of people like to use EV/EBITDA to measure.
• In comparing Japan’s telcos, I believe when Softbank Corp (9434 JP) is in the mix, one has to use forward PERs. EV/EBITDA is too fraught with complications.
• Softbank is currently at its most expensive multiple since listing on a Price to Forward Earnings basis, and relative to its major Peers. And KDDI has a big buyback now.

• Kakao has begun talks with potential buyers for Kakao Games, with Krafton leading discussions directly using its own investment team.
• Despite official denials, it’s viewed as procedural. Local markets anticipate the deal due to no direct refutation beyond formal announcements.
• A three-month compliance period from disclosure makes this quarter challenging, but completion announcement potential exists by Q4 this year.

• The review period for the LQ45 Index July rebalance ended 30 June. The changes should be announced the last week of July, becoming effective after the close on 31 July.
• Based on the index methodology, there could be up to 5 changes at the rebalance. Plus there will be capping changes for Bank Rakyat (BBRI) and Bank Central Asia (BBCA).
• For a change, the impact on the potential inclusions will be higher since they will join the index with higher weights compared to the potential deletions.

• After hitting a low point in Q4 2023, Research on Hong Kong companies has been slow to pick up reflecting the ongoing skepticism from investors. 
• Reports on the large China tech companies dominated the top ten companies covered over the last couple of years and in the first half of 2024.
• As China continues to dominate and make news in the global EV market, research in that sector has picked up.

• This writeup was inspired by David Orr’s tweet about the U.S. listed Chinese company DouYu (Nasdaq: DOYU) paying out a $9.76 special dividend.
• The stock closed at $12.59 the day before and was $6.59 earlier in the year.
• Among Chinese ADRs with significant cash balances, SOHU is my favorite. 

• The company’s annual revenue was $35,820 million in 2023 compared to $44,200 million in 2022, seeing a decrease of 18.96%.
• We estimate that for FY2024 the annual revenue will range at around $37,671 million and for 2025 at around $39,934 million.
• Gross profit for FY2023 was $19,951 million, decreased by 21.96% compared to $25,565 million for the corresponding period of 2022. 

• Rapid7, under the leadership of CEO Corey Thomas and CFO Tim Adams, remains at the forefront of cybersecurity solutions focused on delivering integrated risk and security operations.
• The company concluded the first quarter of 2024 with $807 million in Annual Recurring Revenue (ARR), which indicates an 11% year-over year growth.
• The quarter saw steady performance in its Direct Complete offerings but noted a shortfall in ARR expectations primarily due to slower transitions in the vulnerability management (VM) base to its integrated Cloud Risk Complete offering.

• A series of new product introductions earlier this year should contribute to Ubiquiti  experiencing follow through sales momentum in the June quarter. 
• In the June quarter we are anticipating both enterprise and service provider revenue to increase sequentially.
• The March 2024 quarter included a charge. We are not expecting Ubiquiti to incur a similar expense in the June quarter. 

• Cumulative Q3 FY08/24 results: Revenue JPY235.5bn (+16.5% YoY), Operating profit JPY23.5bn (+51.2% YoY), Recurring profit JPY23.0bn (+56.9% YoY).
• Segment performance: Communications revenue up 10.2% YoY, Business Systems revenue up 48.0% YoY, Energy revenue down 7.0% YoY.
• Subscriber growth: U-NEXT service subscribers at 4.34mn, ARR JPY101.2bn (+22.0% YoY), advertising expenses JPY9.3bn (+32.1% YoY).

• Flex Ltd. reported solid performance for fiscal Q3, demonstrating strong execution across its operations.
• The company, which provides a wide array of manufacturing services, generated $7.1 billion in revenue, achieving an adjusted operating margin of 6.7% and an adjusted EPS of $0.71.
• When excluding Nextracker, Core Flex revenue was $6.4 billion with a record operating margin of 4.9%, delivering $0.54 of EPS.

• We are surprised that Silergy Corp (6415 TT) is using Vanguard Intl Semiconductor (5347 TT) to trial-run products.
• The outlook for 2024 remains unchanged at over 20% YoY, and we still see a path to recovery ahead.
• We consider the recent drop from NTD$526 on June 14th to NTD$429 on July 5th as an opportunity to consider entering the stock.

• We expect Vanguard’s utilization to improve from around 65% in 2Q24 to over 70% in 3Q24.  
• Qualcomm Inc (QCOM US) and Monolithic Power Systems, Inc (MPWR US) are gradually increasing demand volume in 2Q24 and 3Q24.  
• Currently, Vanguard is experiencing a correction from above NTD$142 on July 2nd.  

• The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
• The reference period for the September 2024 index rebal event is now complete. In this insight, we take a look at our final expectations for index changes.
• Our current estimates suggest one-way flows due to index changes and capping could be around US$733mn but that could change by early September 2024.

• Notably, local hedge funds receive significant allocation, nearly 10%, unusual for KOSPI IPOs this size, differing from HD Hyundai Marine Solution.
• KOSPI 200’s initial float rate is 14%, rising to 58% in six months. MSCI starts at 8%, reaching 12% in six months and 25% in a year.
• Differences from HD Hyundai Marine Solution include high short-term strategies among institutions. Unlike before, local pension funds receive substantial allocation, potentially affecting stock price post-listing.