TMT/Internet

• Seven weeks ago I wrote about Shinko Electric Industries (6967 JP)‘s changing Break/Gap Risk as comps had gained. Shinko was cheap to its main comp and peers vs Announcement Date. 
• Since then, Shinko is +4.1% and direct peer Ibiden Co Ltd (4062 JP) is -14.5%. This has erased Shinko’s underperformance since announcement, and shrunk a 9% spread to 3.3% yesterday. 
• With the spread tighter and tech showing some weakness, I’d be happy unwinding at yesterday’s closing spread (3.3%). 

• The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
• In this insight, we take a look at the potential index changes and the resultant capping flows for HSCEI index rebal event in June 2024.
• Based on the current data, I see two low-conviction ADDs and two low-conviction DELs.

• Telefonica SA (TEF SM) has decided to make a €2.35/share cash takeover offer to acquire the 5.65% stake in its German unit Telefonica Deutschland Holding (O2D GR) that it does not own. 
• The bidder and parent company, Telefonica, have informed Telefonica Deutschland that, except for FY 2023 dividend, they do not plan to support the distribution of dividends for future financial years.
• The Bidder will apply for delisting thus the shares will soon become illiquid. Accept offer.

• Viavi Solutions (VIAV US) and Spirent Communications (SPT LN) have agreed a cash acquisition via Scheme at 175p (61% premium, 2.5x EV/Fwd Revenue) with just 0.23% irrevocable undertakings. 
• The opportunity seems good enough so that Viavi (BB) will stretch even more its balance sheet, although Silver Lake is providing 1/3rd of the funds needed.
• Gross spread is +0.11%. I believe that shareholders are holding for a sweetening; quite possibly this is a target for activists too. Risk/return seems attractive. Long.

• Zoom Video Communications, Inc reported financial results for its fiscal Q4 and full-year 2024.
• The company’s revenue for the Q4 reached $1.146 billion, up 3% YoY. Zoom’s Enterprise revenue grew by 5% YoY and formed 58% of total revenue.
• The company’s non-GAAP income from operations grew 10% YoY to $444 million.

• Taiwan Semiconductor (TSMC) (2330 TT) is ramping up its CoWoS capacity, with the aim of increasing new capacity by 32k wafer/month in the end of 2024F.
• In the second half of 2024F, the Apple (AAPL US) iPhone 16 will contribute to revenue from shipments.
• The semiconductor industry is expected to rebound in 2024F, with TSMC being one of the leaders.

• Snowflake reported strong annual performance for fiscal 2024 with a 38% YoY product revenue growth reaching $2.67 billion, highlighting the company’s continued growth trajectory.
• The company also saw an expansion of its non-GAAP product gross margins to 77.8% and it reported non-GAAP adjusted free cash flow worth $810 million, indicating robust fiscal health.
• The company’s exceptional bookings in Q4 with $5.2 billion of remaining performance obligations mark a significant 41% YoY growth, this along with 14 Global 2000 new customers, underscores strong customer adoption and trust in Snowflake’s offerings.

• Salesforce announced its Q4 and full year results for fiscal 2024, reporting a strong performance across all its key metrics.
• This signifies an exceptional year for the company, with revenue, margin, earnings per share (EPS), cash flows, and current remaining performance obligations (cRPO) all recording increased growth.
• The overall transformation seen in Salesforce and its industry has been noted to be substantive, primarily driven by the surge in artificial intelligence.

• eBay’s Fourth Quarter 2023 results demonstrated an approximate organic GMV (gross merchandise volume) growth breakdown of roughly 1% for the full year, despite discretionary spending pressure across major markets.
• This resilience was due to an improvement in this metric during each quarter of 2023.
• Focus category GMV indicated a promising upward trend, with growth close to 4%, significantly outpacing the other areas of eBay’s business by around 7 points.

• Lianlian DigiTech (2104619D CH), a digital payment services provider in China, has begun pre-marketing an HKEx IPO. It previously targeted a US$500 million raise.
• We previously discussed the IPO in LianLian DigiTech IPO: The Bull Case and LianLian DigiTech IPO: The Bear Case. 
• The PHIP reinforces the bear case of operating losses, an unconvincing path to profitability, and a volatile FCF with a deteriorating balance sheet.

For our next Corporate Webinar, we are glad to welcome Hua Hong Seminconductor’s Chief Financial Officer, Daniel Yu-Cheng Wang. 

In the upcoming webinar, Daniel will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Eric Wen. The Corporate Webinar will include a live Q&A session.

The Corporate Webinar will be hosted on Tuesday, 12 March 2024, 16:00 SGT.

About Hua Hong Semiconductor

Hua Hong Semiconductor Limited, an investment holding company, manufactures and sells semiconductor products. The company provides embedded non-volatile memory, standard logic and mixed-signal, radio frequency, power management integrated circuits, power discrete, and automotive solutions. It also offers foundry services; and design services comprising standard and customized IP development, full-custom layout design, and customer-specific integrated solutions, as well as design support and tape out services. In addition, the company provides multi-project wafer services; mask making services; and backend services, such as in-house testing, backside processing and dicing, and backend turnkey services, as well as assembly and testing services. 

Further, it engages in real estate development. Its products are used in consumer electronics, communications, computing, industrial, and automotive markets in the People’s Republic of China, North America, Europe, Japan, and other Asian countries. The company was founded in 1997 and is headquartered in Shanghai, the People’s Republic of China. Hua Hong Semiconductor Limited is a subsidiary of Shanghai Alliance Investment Ltd.

• Softbank Group (9984 JP)’s 180-day lock-up period on its 89.75% ARM Holdings (ARM US) shareholding expires on 12 March. SoftBank’s stake is worth US$124 billion.
• SoftBank will likely monetise its ARM stake using the Alibaba (ADR) (BABA US) playbook. This playbook uses prepaid forward contracts to raise capital with eventual settlement through shares. 
• ARM is currently trading 2.6x its IPO price on AI-driven hype. ARM trades at a premium multiple to NVIDIA Corp (NVDA US), despite forecasted lower growth and margin.  

• We first wrote about the iShares Emerging Markets ex-China (EMXC US) ETF 3 years ago when AUM was less than US$500m. AUM now stands at US$11bn.
• IShares Emerging Markets ex-China (EMXC US) has outperformed iShares Emerging Markets (EEM US) and iShares Emerging Markets Asia (EEMA US) with lower volatility and a lower drawdown.
• With the Chinese economy misfiring and markets under pressure, we could see a further shift in positioning away from China and that means inflows to other Emerging Markets.

• Sakura Internet, a Japanese cloud provider, has seen a significant surge in stock price and market capitalization due to entry into AI cloud services.
• The company plans to invest in NVIDIA H100 GPUs for AI servers, expecting substantial demand but with uncertain revenue and profitability projections.
• Risks include concentrated ownership, lack of analyst coverage, potential shareholder pressure, and competition from larger cloud providers like AWS with advanced AI computing capabilities.

• Wiwynn Corp (6669 TT) is looking to raise up to US1.3bn in its upcoming global depository receipts (GDRs) offering.
• Wiwynn recently reported its board’s resolution to issue up to 17m new shares in the form of GDRs for purchasing overseas raw materials, debt repayment, investing overseas and others.
• 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.

• Redbubble was a bubble. On the wings of pandemic mania, the stock price increased 13 times from March 2020 to January 2021.
• Reaching a 1.9B market cap. Today, the situation looks quite different.
• The stock is down 93% from its highs of 7 AUD and currently sits at 0.

• The sales in January 2024 were the lowest during the period of 2022-2024, indicating a likely downtrend for the first quarter of 2024.
• Demand is expected to be flat or slightly increase in 2Q24F for GlobalWafers, which is encouraging.
• The market for 12″ raw wafers is expected to have a more stable demand-supply balance, while raw wafers of 8” and smaller sizes could experience reduced demand in 1H24F.

Key points

• HPE is a $21.5 billion provider of networking, servers, and storage products, with a focus on higher quality businesses and services
• The company generates cash from operations and divestitures, presenting an attractive investment opportunity with potential for upside to $29/share or a 35% IRR through 10/2025
• HPE’s recent Security Analysts Meeting emphasized its business segments, particularly highlighting opportunities in the Compute segment for AI inferencing needs and Proliant Gen 11 servers

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.

• 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.
• There were no Section Transfers announced in January or February so currently there are no live TOPIX Inclusion events but there are some pre-event names to be monitored closely.
• The upcoming TOPIX flows in end-April 2024 will be more complicated than the other quarterly rebalances as there will be more flows due to the annual liquidity factor review.

• Sea (SE US) has completed a full cycle of growth followed by a phase of profitability improvements/cost-cutting.
• Although substantial cost reductions have been implemented, these efforts have mainly focused on fixed costs.
• With marketing efficiency unchanged and significant improvements in gross margin difficult, the company appears no closer to achieving stable profitability than it initially was.

• Sea Ltd (SE US) released 4Q2023 and FY2023 results with a full-year net profit but another loss in 4Q but QoQ improvements for e-commerce and digital financial services. 
• E-Commerce core market growth rates where impressive, with strong growth momentum with Brazil seeing large profitability gains, whilst overall Shopee is gaining share with the additional benefits from greater scale.  
• Digital Financial Services saw a significant uptick in its loan book and profitability, whilst management pointed toward 2H2024 profitability for Shopee. Management is pointing towards 2024 being another profitable year. 

• Softbank raised around US$4.9bn via selling some of its stake in ARM Holdings (ARM US)’ US IPO. Its remaining 90% stake will be released from its IPO linked lockup soon.
• ARM develops and licenses high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.
• In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.

• 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 H1 FY24 adjusted EBITDA loss of $0.53m, half that of H1 FY23 and in line with RaaS estimates.
• The result benefitted from both operating leverage (43% revenue growth against a 6% increase in operating costs) and some reallocation of employee costs to capitalised product development.

Key points

• Keyword Studios is the largest videogame outsourcing company globally with a strong track record of organic growth and strategic acquisitions
• Despite concerns about AI and market slowdown, the company remains well-positioned for long-term success
• Expected to continue delivering high single-digit to low double-digit organic growth and potential for compound annual growth rate of 15% over the next five years, 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.

• SHEN announced the sale of its tower assets for a price that would equivalently pay for the purchase of Horizon Telecom, effectively creating an asset trade that creates considerably value.
• SHEN has unlocked value by selling assets that are expected to experience a decline in revenue after this year for assets that should realize revenue and adjusted EBITDA growth
• The growth SHEN is purchasing without the need of cash financing should have a positive impact on SHEN’s valuation.

• 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 H1 FY24 adjusted EBITDA loss of $0.53m, half that of H1 FY23 and in line with RaaS estimates. The result benefitted from both operating leverage (43% revenue growth against a 6% increase in operating costs) and some reallocation of employee costs to capitalised product development.
• We forecast positive H2 FY24 EBITDA on the back of continued operating leverage, and in particular significant Hong Kong implementation fees (estimated at $1.4m), higher float interest and continued cost control.

• The changes to the Nikkei 225 Average for the March 2024 Review were announced today after the close. A little earlier than I expected. 
• Socionext, Disco, Zozo IN; Takara Hldgs, Sumi Osaka Cement, Pacific Metals OUT. Nitori PAF increase. US$4bn+ to trade one way on 29Mar close. One interesting surprise. 
• Overall more impactful than it looks. And it changes the front-end arithmetic on Fast Retailing (9983 JP). There may be fun on the DELETEs.

• Investing in semiconductors can be pretty simple if you let it be.

• At a high level, I believe you want to invest in the secular at a decent price or invest in places where there are unwarranted dislocations.

• Sometimes the entire ecosystem says one thing and the stocks say another. Usually, the ecosystem is right.

• Reddit plans to price its IPO between $31 to $34 a share, which would suggest equity value of US$6.0 billion to US$6.5 billion on a fully diluted basis.
• Our base case valuation of Reddit is implied market cap of US$7.9 billion or implied price of US$41.2 per share. 
• Given the moderate upside relative to the IPO price range, we have a Positive view of the Reddit IPO. 

• On the 2 January, TDCX (TDCX US), a Singapore-headquartered digital customer experience (CX) provider, announced it had received a preliminary non-binding proposal from Laurent Junique to be acquired at $6.60/ADS.  
• On the 1st March, TDCX entered in a definitive agreement by way of a short form merger at US$7.20/ADS, a 48% premium to undisturbed.
• As Laurent Junique holds 98.4% of the voting power, there is no shareholder vote on the merger. This is done. The Offer should close in the 2Q24.  

• NetEase reported C4Q23 top line, GAAP operating profit and GAAP net income (4.8%), (16%) and (9.0%) vs. our estimates, and (3.6%), (12%) and (6.8%) vs. consensus， mainly due to..
• The positive, however, is the acceleration of launch of <Naraka Mobile> by 1-2 quarters. Our estimate of the gross billing remains the same;
• We remain optimistic about the upcoming pipeline, and we raise our TP to US$122. Our new TP implies 15.4X PE, which is 12% above current price.

• Reddit, an American social news aggregation, content rating, and forum social network, filed to go public. The company plans to trade on the NYSE under the ticker “RDDT”.
• Reddit was founded in 2005 by Steven Huffman, Aaron Swartz and Alexis Ohanian. The company is forecasted to surpass $1B in total revenue in 2024.
• They chose the right time to go public. I have a positive view of the upcoming Reddit IPO and looking forward to seeing them trade as a public company.

• According to Pitchbook and their S-1, Reddit has raised ~$1.5B in equity financing. Their last private round, a Series F led by Fidelity in August 2021, was around ~$10B valuation.
• I derive a target valuation for Reddit using a ~8x EV/Revenue multiple on my 2024 estimates. The multiple represents a top-range multiple of the peer group.
• I arrived at my ~$9.6B target valuation, which implies 50% upside to indicative IPO valuation at the midpoint. I expect Reddit will trade above their last round valuation of $10B.

MGI – Media and Games Invest (MGI) had a good Q423, gaining market share in an improving trading environment. Organic revenue growth of 16% in the quarter helped lift the full year figure to +5%. This good momentum has continued into the new year, with 18% revenue growth in January. MGI has leading positions in in-app advertising in the US on both iOS and Android, with the US its largest market at 70% of revenues, and has well established non-identifier-based and AI-driven solutions in the market. In the fast-growing Connected TV (CTV) market, MGI is targeting margin over volume. We have lifted our FY24 estimates reflecting the improving growth and margin prospects. Our view is that these are not yet factored into the valuation.

• A share indices were up on the week. HK stock indices were down except for HS Tech. H-shares with A-share pairs were up. 
• Net SOUTHBOUND buying was HK$9.1bn in the second post-holiday week after being +HK$20bn in the first week. LOTS of SOEs on the net buying side. Still.
• SOUTHBOUND continues to buy high-div SOEs. ex-div is still three months away, and given the new KPIs discussed late January by SASAC official, these still seem to be appropriate targets.

• TSMC: +22.9% ADR Premium is Near an All-Time High; Long Taiwan Shares vs. Short the ADR
• UMC: 2.2% Premium; Flipped Positive From a Discount; Likely to Contract
• ASE: +13.3%; Short the Historically High Spread at the Current Level

• Singapore-based crypto payment app Oobit has concluded its US$25 million Series A investment round.
• The backers in this round include the investment arm of USDT parent company Tether, CMCC Global’s Titan Fund, 468 Capital, and Solana co-founder Anatoly Yakovenko.
• The startup plans to use the funds to expand into Latin America, the UAE, the Asia-Pacific, Canada, and Australia beyond its primary markets in the European Union and the UK.

• Universal Display Corporation (UDC), a leading provider of OLED technology and materials, experienced a revenue of $576 million, operating income of $217 million, and net income of $203 million in 2023.
• Its robust display impacted net income per diluted share, which amounted to $4.24.
• Several factors on both sides of the company’s balance sheet deserve attention while crafting an investment thesis.

• Warner Bros.
• Discovery is striving to create a pathway to growth in an evolving media industry as reflected in the Q4 Earnings.
• The company had prioritized achieving a well-grounded financial position and reducing its leverage, successfully lowering its debt by $5.4 billion in 2023 and expecting continued deleveraging in 2024.

• Super Micro Computer (SMCI US) and Deckers Outdoor (DECK US) replace Whirlpool Corp (WHR US) and Zions Bancorporation (ZION US) in the S&P 500 INDEX at the close on 15 March.
• There are a bunch of inclusions, deletions and migrations across the S&P 500 INDEX (SPX INDEX), the S&P Midcap 400 Index, and the S&P SmallCap 600 Index.
• The largest flows will be in the S&P 500 INDEX (SPX INDEX) adds and the largest impact in the adds to the S&P SmallCap 600 Index.

• Startale Labs, a Singapore-based Web3 startup, has raised US$3.5 million in a series A follow-up round, according to Alternatives.pe.

• UVM Signum Blockchain Fund, Sony Network, and Samsung Next Ventures were some of the investors in the round, which was raised at a post-money valuation of US$63.5 million.

• Founded in January 2023, Startale Labs specializes in Web3 infrastructure development. Helmed by Sota Watanabe, the company creates core infrastructure and applications for Web3 that is integrated onto the Astar Network blockchain.

• Amperesand, a Singapore-based electrical infrastructure company, has raised over US$12.4 million in seed funding.
• Xora Innovation, Temasek’s deeptech early-stage investment platform, co-led the round with venture capital firm Material Impact.
• TDK Ventures, the venture arm of Japanese electronics firm TDK, also participated, along with Foothill Ventures.

• The 1Long founding team 1Long, a wealth management platform in Vietnam, has received US$500,000 in a pre-seed investment round from Iterative, Monk’s Hill Ventures, R2VP, and Orionis Capital.
• The new capital will be channelled into technology development, partnerships with asset managers and financial institutions, and strategic team expansion.
• Also Read: ‘Resistance to digital wealth management has almost disappeared in SEA’: Bambu CEO Ned Phillips Founded by a team of former investment banking and Y Combinator-backed veterans, 1Long enables individuals to start with as little as 10,000 VND (approximately less than US$1).

• UNOAsia, the company behind UNO Digital Bank in the Philippines, has raised US$32.1 million in a pre-Series B investment round comprising equity and debt.
• The investors include Gateway Partners, Creador Private Equity, and Nextinfinity Management.
• This round brings UNOAsia’s total raise to approximately US$75 million.

• Baidu (BIDU) reported C4Q23 top line, non-GAAP operating profit and GAAP net income inline, 9.4% and (43%) vs. our estimates, and inline, 8.2% and (46%) vs. consensus. 
• We believe LLM is fundamentally an upgrade of search; further, BIDU is a 2B/general AI play in China, a country filled with 2C/specialized AI players;
• We cut our TP for BIDU from US$157 to US$116 and maintain BUY.

• While some B2B ecommerce firms are struggling, others are thriving. India-based Metalbook, a B2B platform focused on the global metal supply chain, said it is eyeing US$200 million in annualized revenue run rate by the end of the 2024 fiscal year.
• Founded in 2021, the startup has raised US$15 million in a series A round led by Rigel Capital. FJ Labs participated, as well as existing investors Axilor Ventures and Stride Ventures, among others.
• Metalbook helps customers through their entire metal manufacturing and procurement cycle. This includes everything from buying and selling to customization, logistics, scrap recycling, as well as financing.

• Refy, an AI-powered green asset fintech financier in Southeast Asia, has secured a pre-seed investment of US$525,000 from Wavemaker Impact (WMi).
• This funding will allow Singapore-based Refy to execute secured pilot projects, develop its technical platform, and assemble a specialised team with experience in green assets and industrial projects.
• Globally, there are investors to support large-scale projects (worth upwards of US$5 million), such as solar, wind, hydro farms, and geothermal facilities.

In H124 SenSen delivered positive free cash flow for the first time, a key milestone. The group’s Smart Cities focus and standardised business model supported steady top-line progression, as well as strong gross margin expansion and loss reduction. As end-H1 cash was boosted by an annual Australian development grant, we believe reaching positive free cash flow from the group’s core operating assets remains a key target. Below we outline a pathway for SenSen to deliver this target in Q4, underpinned by consistent top-line growth on a lower cost base.

• Komerce, an e-commerce enabler for small-to-medium enterprises (SMEs) in Indonesia, has received an undisclosed investment from Bukalapak co-founder Achmad Zaky and 500 Global.
• The funding will allow Komerce to accelerate product development and customer acquisition.
• Founded in 2020 by Darmawan, Syaefullah Syeif (COO), and Satriyo Budi Utomo (CTO), Komerce offers remote team development, shipping aggregators, e-fulfilment, omnichannel SaaS, and customer relationship management.

• Tuya 4Q23 beats. Tuya reported 4Q23 revenue of $64 million, up 42% Y/Y, while overall gross margin reached a historical high of 47.3% and non-GAAP net profit reached a new peak of $12.6 million, representing 19.5% of non-GAAP net margin, driven by a global downstream demand recovery, the end of industry restocking, and Tuya’s successful execution of its big customer- focused strategy and earlier restructuring.
• IoT PaaS contributed $47 million of revenue in 4Q23, up 45% Y/Y, driven by the normalization of downstream inventory and Tuya’s big customer-focused strategy.
• Meanwhile, Tuya sees a more balanced distribution between smart lighting and electrical versus smart safety and home appliances.

Key points

• Canadian company offering US$55/share for total of $100m in tender offer
• Potential for profit for odd-lot holders with current stock price at US$44.80
• US shareholders may face 15% dividend tax, reducing gains, but opportunity for 7% post-tax profit per account for odd-lot holders

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.

• Intuit, a leading provider of financial management software solutions, has shown strong performance in its second quarter of fiscal year 2024.
• Reinforcing the company’s commitment to become a global Artificial Intelligence (AI)-driven expert platform, Intuit reported an 11% growth in revenue, and is on track to achieve its full fiscal year guidance of 11% to 12% revenue growth.
• As for Intuit’s tax service, TurboTax, revenue growth of 7% to 8% is expected for the Consumer Group for the full fiscal year.

• ARLO continued to grow the number of paid subscribers in Q4 2023 with the added tease of ARLO crossing 3 million paid subscribers in the first quarter of 2024
• ARLO is focusing on a service first approach where service is subsidizing the cost of hardware
• ARLO generated revenue of $135.1 million compared to our estimate of $135.5 million. Product mix was different than we had forecast

• The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation.
• For companies with “low liquidity” the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation.
• Every April, the application of this liquidity factor is reviewed by the TSE. In this insight, we take an early look at what could happen in April 2024.

• AEM (AEM SP) reported FY23 results which showed a decline of 45% in annual revenues and a small loss on the net income line. Guidance is only given for 1H24.
• Senior management will forego all bonuses, the CFO departs and the old CEO is coming back as a consultant. AEM’s stock closed down 20% after the FY23 results publication.
• A potential new Trump presidency would push an “America First” agenda likely benefiting Intel and indirectly AEM in a big way.

For our next Corporate Webinar we are glad to welcome iFAST’s Executive Director and Director of Corporate Communications, Mr Jean Paul Wong. 

In the upcoming webinar, Jean will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Alec Tseung.

Alec will also be providing an industry overview, featuring landscape commentary and returns analysis. The Corporate Webinar will include a live Q&A session.

In the spirit of giving back to our community, one of the attendees will also be awarded an Amazon Kindle as part of our exclusive lucky draw. 

The Corporate Webinar will be hosted on Thursday, 7 March 2024, 19:00 SGT.

About iFAST Corporation 

iFAST Corp (stock code: AIY) is a wealth management Fintech platform, with assets under administration (AUA) of S$19.83 billion as at 31 December 2023. Incorporated in the year 2000 in Singapore and listed on the SGX-Mainboard in December 2014, the Group is also present in Hong Kong, Malaysia, China, and UK. Through the years, the Group has built a well-established Fintech ecosystem connecting its product providers and clients. iFAST Corp holds the requisite licences in the various jurisdictions it operates in to provide a wide range of products and services.

As at end December 2023, the Group offers access to over 21,000 investment products including over 13,000 funds from over 320 fund houses, over 2,400 bonds, stocks and ETFs listed on the Singapore, Hong Kong, US, Malaysia, UK, and China A stock exchanges, as well as services including pension administration solutions, online discretionary portfolio management services, research and investment seminars, Fintech solutions, and investment administration and transaction services.

• Competition in the High Bandwidth Memory (HBM) space is intensifying; Micron shares have rallied after it announced HBM3e mass production; SK Hynix has outperformed since its earnings release.
• Nvidia’s H200, its most advanced chip for generative AI, leans heavily on HBM3e memory for its increased performance vs. the previous H100 generation. Memory leaders are key for Nvidia’s success.
• Taiwan’s Nanya Tech appears to be watching HBM competition between Micron, SK Hynix, and Samsung from the sidelines; can its shares get back into the game?

• Mediatek Top Performer; Showcasing New AI Capabilities at the Mobile World Congress in Barcelona
• Memory Monitor: Competition Is Hotting Up for Key Memory Chips Nvidia Depends On; Nanya Left Out?
• Novatek (3034.TT): It Has Been Qualified by the IPhone 16 for OLED Driver IC

• Plover Bay Technologies (1523 HK) reported an 8.5%/ 24YoY increase in revenue/profits (%). Profits increased due to a net margin expansion of 370 bps to 29.8%. 
• The company had positive news in January when Peplink announced that it had agreed with SpaceX’s Starlink to become an authorized technology provider using Peplink SD-WAN routers.
• Trading at 11x/10x PE FY23/FY24e, with an 8.2% trailing dividend yield and ~60% ROE, this is another growth/dividend gem worth exploring.

• We discuss the end of the mandatory lock-up periods for 51 stocks in Korea in March 2024, among which 5 are in KOSPI and 46 are in KOSDAQ.
• These 51 stocks on average could be subject to further selling pressures in March and could underperform relative to the market.
• The top five market cap stocks including those of which at least 1% of outstanding shares could be sold include APR, WCP, DS Dansuk, GI Innovation, and Geolit Energy.

• The supply chain received good news that Novatek Microelectronics Corp (3034 TT) as successfully passed iPhone 16 OLED DRIVER IC (DDIC) qualification.
• Novatek’s recent alliance with ARM to develop Neoverse V2 is a noteworthy development.
• Novatek’s 1Q24F forecast remains unchanged, but the outlook for 2024F is likely to show positive growth.

• Pureprofile Ltd (ASX:PPL) is a data analytics, consumer insights and media company underpinned by proprietary technology, servicing business decision makers in brands and media companies as well as market researchers.
• Pureprofile has confirmed, as previously announced on 30 January, that H1 FY24 revenue was $24.0m, with platform revenue contributing $4.4m, a 104% increase on the previous corresponding period (pcp).
• EBITDA, adjusted for significant and non-cash items, increased 9.6% to $2.37m.

• Palo Alto Networks’ Q2 2024 earnings highlight indicate the company’s continued success in executing its profitable growth strategy.
• The cybersecurity giant achieved significant top-line growth with revenues surging by 19% YoY, the RPO growing by 22%, and billings increasing by 16% YoY. Impressive, non-GAAP operating margins of 28.6% expanded roughly 600 basis points YoY, generating $2.9 billion in adjusted free cash flow on a trailing 12-month basis.
• 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.

• Today after the close, Mitsubishi Electric (6503 JP) announced the sale of its position in Renesas Electronics (6723 JP). That’s 50,706,800 shares.  
• This is the third large block in four months (Renesas in November for 223mm shares, NEC and Hitachi in January 2024 for 123mm shares).
• This is smaller, and reasonably well-flagged. Index demand is longer-dated.

• Mitsubishi Electric (6503 JP) is looking to raise approximately US$800m through an accelerated secondary block deal, via selling 50.71m shares (2.6% of TSO) of Renesas Electronics (6723 JP) stock. 
• The deal will be an easy one to digest at only three days of three month ADV.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• China announced game approval for the Feb batch. The number of games approved remained at a higher level than 2023.
• The pace of China game approval appears to be accelerating, to the same level as pre-tightening.
• Netease gets one game approved but we don’t see that the acceleration of game approval benefits big names proportionally.

• Uchi Technologies (UCHI MK) reported a solid Q4FY23/FY23 result, with revenue up 18%/13.2% YoY, operating profit up 28%/21% YoY, but profits up 9%/8.3% YoY (due to increased taxation).
• For FY24, the company conservatively guided a mid-single-digit decline in revenue growth. In FY23, the company guided flat USD revenue growth (but delivered 9.2% YoY).
• Assuming the current currency and guidance, the stock trades at 14x FY24e with a yield of 7% (assuming a 100% payout similar to last two years) and ROCE above 60%. 

• OpenAI, founded in 2015 as a nonprofit research lab, has transitioned into a for-profit entity with ambitious goals of creating artificial general intelligence to benefit humanity.
• The company’s CEO, Sam Altman, is focused on solving the problem of super intelligence and has plans to set up his own semiconductor manufacturing pipeline and extend human lifespan.
• OpenAI’s business model now involves catering to enterprise customers to generate revenue, and they face challenges in balancing their grand mission with the need for significant investment.

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• QYOU Media has reported several positive announcements over the last month that reaffirm our confidence in the story.
• This includes record months for its influencer marketing business and QGamesMela reaching various milestones.
• We recently published a management interview with QYOU, watch it here.

• Delta Thailand has underperformed Delta Taiwan since our last Delta Monitor piece. Delta Thailand’s market cap has fallen to become nearly equal to Delta Taiwan.
• Both have the same growth profile yet Delta Thailand is more expensive and will continue to suffer from a potential share sale overhang and risk of SET 50 Index changes.
• EVENT: Taiwan’s earnings release is imminent. Results could further highlight to the market that Delta Taiwan is the better stock to own.

• After the market close on 27 February, Samsung Display announced that it will sell its 4.95% stake in Sfa Engineering (056190 KS) in a block deal sale. 
• We would take the trade. We like the relatively large block deal sale discount as well as the company’s attractive valuations. 
• SFA Engineering is trading at P/E of 8.3x, EV/EBITDA of 2.7x, and P/B of 0.7x in 2024, which are much lower than historical valuations.

• We expect Baidu to report C4Q23 revenue, GAAP op. profit and GAAP net income inline, (2.3%) and (4.5%) vs. consensus.
• The slight bottom-line miss was mainly attribute to the increased marketing costs related to user acquisition. Baidu cloud revenue is robust due to AI product stimulating demand. 
• We cut our target price to US$146 for the spendings related to the construction of future e-commerce business but maintain BUY for its cheap valuation.

• Nvidia emerges as a strong challenger in the semiconductor industry, while intel remains the dominant player
• Intel makes significant strides in its foundry business, showcasing a clear focus on advanced nodes like 18A and 14A
• Intel positions itself as a serious player in the foundry market, attracting key customers like Microsoft and building a strong ecosystem around its offerings

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• EPAM Systems had a challenging year in 2023 due to geopolitical factors – Russian invasion of Ukraine – which led to disruption and a rebalancing of their delivery platform across Europe, Western and Central Asia, India, and Latin America.
• Despite these external disturbances, EPAM managed to perform creditably, underlining its ability to navigate a volatile demand environment.
• EPAM’s activities in 2023 were largely focused on enhancing delivery quality, optimizing cost effectiveness, and leveraging their technological capabilities to tap into the future opportunities in Gen AI and AI. 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.