TMT/Internet

• Latest Performance: Taiwan AI Names Keep Flying; ASE & Mediatek Lose Steam After Reporting
• Largest Display Driver Maker in the World’s Guidance Implies Growth Reversal Coming in Feb & March
• TSMC and Samsung Will Keep Their Most Advanced Chipmaking at Home

• UMC’s Q423 results in line with expectations. Q124 guidance, down 2-3% QoQ, demonstrates ongoing headwinds for foundry
• Intel, UMC foundry partnership helps the latter overcome their 14nm issues while giving them bargain basement access to US manufacturing capacity 
• If Intel could have developed and deployed the proposed 12nm specialty process on their own, they would have….

• Novatek reported over 20% YoY growth for 4Q23 and slightly beat expectations but the latest guidance implies growth to reverse to a sales contraction in the latter part of 1Q24E.
• Gross and operating margins are guided to contract; nevertheless, inventory dropped to one of the lowest levels since COVID and is expected to remain healthy.
• Novatek’s latest results appear to signal that while inventory levels are healthy, the demand growth rebound for display drivers that started in June 2023E could lose steam in 1Q24E.

• 4Q23 surpassed the guidance for revenue, GM, and OPM. 4Q23 EPS reached NT$8.76, compared to NT$10.46 in 3Q23 and NT$6.64 in 4Q22.
• 1Q24F is typically the traditional low season for consumer electronics, and there are fewer working days during the Lunar New Year.
• It is expected that the dividend payout ratio this year will be similar to previous years, which has been higher than 80% in the past few years.

• Wrkr Ltd (ASX:WRK) offers compliance solutions for Australian superannuation contributions and payroll including member onboarding, super payments, messaging and employee validation.
• (ASX:LNK) has moved from ‘discovery and planning’ payments ($425k in H1 FY24) to a full feature trial with a named super fund (REST).
• We now expect onboarding during Q1 FY25, a quarter behind previous assumptions. Link has announced an MoU to extend its contract with Australian Super out until 2028 (from June 2025). 

• KLA had a rare miss. The guidance was a bit light for the inspection execution machine.
• KLA rarely misses and is by far the best financially managed of the large-cap semicap companies.
• KLA reports Q2 EPS $6.16 ex-items vs FactSet $5.91

MotorK closed FY23 with annual recurring revenue (ARR) of €34.1m, a 39% increase from the prior year. While both the Retail and Enterprise segments grew over the year, Enterprise ARR more than doubled to make up 22% of year-end ARR. Net revenue retention (NRR) above 100% for both segments highlights the ongoing adoption of multiple products across the group’s existing customer base. The company continues to target positive cash EBITDA in FY24. We maintain our forecasts pending FY23 results on 5 March.

• Gorilla Technology reported a strong first nine months of 2023, with adjusted EBITDA of $13.4 million versus a $4 million loss for the same period the previous year.
• The stock closed up 96% after the earnings release.
• The profit turnaround was driven by: (1) revenue growth of more than 100% to $38.0 million for nine months (analysts were expecting $21.8 million); and (2) an increase in gross margin from 33.2% a year ago to 76.5% for the nine-month period.

• The EGM to vote on the privatisation of iClick (ICLK US) takes place on the 8th March.  The Offer price is US$4.08/ADS (US$0.816/share), bang in-line with iClick’s 1H23 net cash/share. 
• That’s a far cry from the 2021 non-binding Offers of US$75/ADS and US$67.50/ADS from Infinity Equity Management and PAG/Oasis respectively – after adjusting for November 2022’s reverse share split. 
• The Buyer Group owns 35% of shares out and 69% of the vote. The Merger requires at least two-thirds of the voting power of shares out. So this is done. 

• 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.
• The TOPIX Inclusion events of Visional (4194 JP) and Furuya Metal (7826 JP) took place at the end of January and the price performances were mostly in line with expectations.
• Currently, there are no upcoming TOPIX Inclusion events that have been announced officially but there are couple of pre-event names that should be on your watchlist.

• Companies in India have disclosed their shareholding pattern as of end-December in January. There are companies with significant float changes from end-September and/or end-December.
• The changes in free float could be reflected in domestic and global indices over the next few weeks and months resulting in action from passive trackers.
• There are 15 stocks that could have passive inflows from global trackers while 9 could see passive outflows in February.

• So I took this weekend to update my models on Meta and Amazon. I just wanted to leave some brisk thoughts on these updated models.
• I will start with Meta today and will share my thoughts on Amazon tomorrow.
• You can find the updated model on Meta here which I encourage you to download to play around with your own narrative as you see fit.

• ServiceNow’s Q4 2023 earnings present a compelling story of growth powered by artificial intelligence (AI).
• The company reported subscription revenue growth of 25.5% at constant currency, 200 basis points above its guidance and cRPO growth of 23% at constant currency, also 200 basis points above its guidance.
• In addition, the company reported 168 deals greater than $1 million in net new ACV, a 33% increase from the previous year.

• Amphenol Corporation announced its fourth quarter and full year results for 2023 with the company closing the quarter with sales of $3,327 million and record adjusted diluted EPS of $0.82.
• The company’s sales were up 3% in U.S. dollars for Q4, 4% sequentially, but down 1% organically compared to Q4 2022.
• In contrast, the full year saw a drop with sales of $12,555 million, which was a decline of 50 basis points in U.S. dollars and a 3% organic decrease compared to 2022.

• In the recent earnings, Lam Research Corporation demonstrated strong performance in the December quarter of 2023.
• Financial highlights include higher revenues, gross margin, operating margin, and EPS above guided ranges.
• Although overall wafer fabrication equipment (WFE) spending declined, the company almost doubled its EPS compared to the cycle trough in 2019.

• The latest earnings of IBM revealed solid growth across all businesses for the last quarter of 2023, with a revenue growth of 3% and over $11 billion of free cash flow.
• The achievements and progress noted by IBM’s Chairman and Chief Executive Officer, Arvind Krishna, corroborate the company’s commitment towards strengthening its diversified business model.
• Key drivers of IBM’s success during the year 2023 were enhancements in its software portfolio and the bolstering of its consulting position.

• ASML, a leading manufacturer of chip-making equipment, has reported its financial results for the fourth quarter and full year 2023, demonstrating strong financial performance despite a challenging macroeconomic landscape marked by uncertainties.
• The company reported net sales of EUR 7.2 billion in Q4, coming in just above the guidance, mainly due to more installed base business.
• This included EUV system revenue of EUR 2.3 billion and net system sales totalling EUR 5.7 billion, largely driven by Logic which accounted for 63% of net system sales, while Memory composes the remainder.

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads – Hollysys Automation Technologies (HOLI US), Shinko Electric Industries (6967 JP), JSR Corp (4185 JP), Probiotec Ltd (PBP AU), Genetron Holdings Ltd (GTH US), Adbri (ABC AU). 
• Lowest spreads  Pact Group Holdings (PGH AU), Tietto Minerals Ltd (TIE AU), Orecorp Ltd (ORR AU), Benesse Holdings (9783 JP), Irc Ltd (1029 HK), T&K Toka Co Ltd (4636 JP). 

• Alchip Technologies (3661 TT) could replace Feng Tay Enterprise (9910 TT) in the Yuanta/P-Shares Taiwan Top 50 ETF at the March rebalance.
• Alchip is trading 330% higher from a year ago and this inclusion will come on the heels of the stock being added to global indices in second half of 2023.
• Short interest in Alchip Technologies (3661 TT) has more than halved over the last week and the stock price has moved higher.

• Bharti Hexacom (6597372Z IN) is looking to raise up to US$1bn in its upcoming India IPO. The bookrunners are SBI Capital, Axis Capital, BOB Capital, ICICI Securities and IIFL Securities.
• Bharti Hexacom (BH) is a communications solutions provider offering consumer mobile services, fixed-line telephone and broadband services to customers in the Rajasthan and the North East telecommunication circles in India.
• It offers its services under the brand ‘Airtel’. BH relies on a robust network infrastructure with a mix of owned and leased assets.

• The review period for a global index and a bunch of local indices ended last week. The announcement of the changes will be made in 1 week to 4 weeks.
• Strike Energy (STX AU) will replace Costa Group Holdings (CGC AU) in the S&P/ASX 200 (AS51 INDEX) at the close on 8 February.
• The inflows to mainland China ETFs continue for another week. There were big inflows to iShares India ETF (INDA US) and Ishares India Small-Cap (SMIN US). 

• Singapore-based AI automation software company Bluesheets today announced that it has secured US$6.5 million in a Series A funding round led by Illuminate Financial, a UK-based financial-services-focused VC fund that is backed by BNY Mellon, J.P Morgan, Citi, SGX, Barclays, Euroclear, S&P Global, Jefferies and Deutsche Börse Group.
• The company’s early investors, such as 1982 Ventures and Insignia Ventures Partners, and new investor Antler Elevate Fund also participated in the round.
• In a press statement, Bluesheets said that the funding will play a crucial role in advancing its exclusive AI capabilities, enabling them to assist a broader range of clients in digitalising and automating their processes, ensuring competitiveness in the AI-driven era.

• Alphabet Inc.’s fourth quarter results for 2023 reflect signs of solid growth and sustained technological innovation as the company maintains a strong trajectory for 2023.
• An investor would focus on Alphabet’s robust earnings performance, demonstrated by substantial revenues of $307 billion, an increase of 9% from 2022.
• Take the case of Alphabet’s primary business.

• A bad week for HK and Chinese shares. National Team buying seems lighter into the waning days of the Year of the Rabbit. 
• Net SOUTHBOUND selling was HK$9.4bn on the week, with net selling every day as the market fell hard – both in HK and the mainland.
• Remarkable this past week was the tendency to net sell names which were down hard, and net buy names which have been performing well. 

• Texas Instruments, an American multinational company, has shared their Q4 2023 earnings release.
• The financial results indicated a downturn in revenue, decreased by 10% sequentially and 13% year-on-year to $4.1 billion.
• This decrease was largely due to declining sales in the Analog segment (12% YoY), the Embedded Processing segment (10% YoY), and the Other segment (25% YoY).

• Verizon released its most recent results which were fairly good though we can develop a more balanced investment thesis for this telecommunications giant consists of highlighting several positives and negatives from the results of the fourth quarter of 2023.
• Of the uplifting notes, Verizon saw a 3.2% YoY growth in wireless service revenue, hitting $76.7 billion in 2023.
• The fourth quarter saw a strong finish with significant increases in customers embracing the offerings.

• Back on the 26th January, proxy advisor Glass Lewis issued a report recommending Hollysys Automation (HOLI US) shareholders vote against Ascendent’s merger. Two days later, ISS shared a similar view.
• Both proxy advisors should read HOLI’s latest proxy statements. Negotiating with Dazheng is like something out of the wild west. The Special Committee gave the consortium considerable latitude. 
• Passive investors will follow GL/ISS, which could jeopardize the vote on the 8th Feb. It should not come to this. 

• Mesh Bio Co-Founders Andrew Wu and Arsen Batagov Singapore-based chronic disease management startup Mesh Bio has raised US$3.5 million in Series A financing led by East Ventures.
• Elev8, Seed Capital, and other existing shareholders also co-invested.
• The funding will allow Mesh Bio to offer its digital twin technologies to healthcare providers and scale the deployment of these solutions across Hong Kong and Southeast Asia, mainly Indonesia and the Philippines.

• 1P revenue grew HSD and Amazon’s revenue ex 1P increased by high-teens last quarter.
• Since I continue to rate Amazon retail to be relatively overlooked driver for Amazon, let me start with margin discussions on retail.
• North America’s operating margin bottomed at -2.3% 1Q’22 and has since then increased by more than 800 bps to reach 6.1% in 4Q’23, just shy of the pre-pandemic high of 6.4% in 1Q’19.

• Continuing DX tailwinds and developmental hurdles – Q1-2 FY6/2024 results highlighted continued demand for DX solutions, combined with a stable uptick for Consolidated Financial Solutions driven by outsourcing.
• With 11.6% sales growth YoY and operating profit growth YoY at a slower pace of 5.4%, the company is maintaining its course by investing in a software-driven strategy.
• A fundamental element is the development of the Management Solutions segment which currently faces challenges in building up a pipeline, and the company has identified some necessary changes in sales activity. 

• Q1-3 FY3/2024 results were in line with unchanged FY company guidance, with the company displaying 1) sustained growth in Strategic/DX Consulting demand and System Integration, 2) ongoing successful business expansion into new market sectors, and 3) management achieving a delicate equilibrium between actively generating current growth and investing for the long-term success of the business.
• Although DX will remain a structural tailwind for some time to come, the company’s growth potential will be underpinned by access to high-caliber hires at both graduate and mid-career levels.
• We believe the announcement of a business and capital partnership with CIRCULATION (7379) points in the right direction in establishing a channel to a quality talent pool.

• Revenue declined by a single-digit percentage quarter over quarter. However, it is expected to improve in the following quarters. 
• Automotive applications are currently undergoing inventory adjustments, while consumer applications are entering the low season. Electric Vehicle components are expected to continue growing.
• It will still maintain the previous payout level of NTD$4.5.

Vection Technologies’ H124 activity report shows sustained momentum, with the group delivering 37% y-o-y revenue growth to A$11.9m. Total contract value (TCV) of A$16.7m was up 67% y-o-y, providing strong revenue visibility for the rest of FY24. As with Q1, we believe growth has been driven by the expansion of existing low-margin, one-off transactions into large multi-year deals. Expanding deals, rather than relying on new wins, underpin the opportunity for operationally geared growth, with management expecting to see the benefits of recent cost reduction measures in H2.

• Q1-3 FY3/2024 results were ahead of FY company guidance which remained unchanged, positioning the company for a robust year-end in our view.
• The key earnings drivers remain DX-related, having a positive impact on sales growth and profitability improvements in Cybersecurity, Consulting and Training, and IT Infrastructure segments.
• ID Holdings’ objectives of strengthening its DX-related offerings, developing effective vendor partnerships, optimizing administrative operations, and shifting human resources to profit centers continue to yield positive results. 

• Take a look at the Facebook’s DAU or MAU number for the last time because Meta will stop reporting them from next quarter.
• Investors usually assume the worst when any important KPI gets deprecated by the company.
• Thankfully, along with Family “Daily Active People” (DAP), Meta will report YoY changes in ad impressions and average price per ad by region.

• Hollysys Automation Technologies (HOLI US) and Dazheng have traded barbs since Glass Lewis and ISS recommended voting against Ascendent’s US$26.50 offer at the EGM on 8 February.  
• While Dazheng may have been held to a higher standard than Ascendent, the proxy statement shows that the impasse was mainly due to Dazheng’s inability to get its act together. 
• The simple majority voting threshold and no shareholder publicly backing Dazheng’s call to vote NO will help the vote get up. The gross/annualised spread for an end-March close is 7.1%/52.1%.

Key points (machine generated)

• 111 Inc’s privatization process has been ongoing for 14 months, but no definitive agreement has been reached, leading to investor fatigue and a significant drop in stock price.
• Chinese companies listed in the US typically have long privatization timelines, with some taking over 2 years to finalize the process.
• The extended timeline in 111 Inc’s case may be causing concern among investors, resulting in a wider spread between the offer price and the stock price, but relisting the company in China could potentially lead to a higher valuation.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Microchip used to be the bellwether for semiconductor demand After many semis guided weaknesses in automotive, industrial, and digital consumer much earlier, Microchip’s 19% miss in 1Q24 gives no surprise.
• Why the worst among all? We attributed Microchip to over 85% of its products on automotive, industrial, and digital consumer. Other semis have higher exposure on PC and comm.
• Priced in? We estimate over 20% y/y decline in 2024 sales vs. Bloomberg’s -8% y/y. 2024E EPS of US$2.94 is likely below US$1. Price is only 10% below historical peak.

• ASEH expects inventory adjustments to be completed in 1H24 and the growth to accelerate in 2H24. ASEH also expects IC-ATM to grow similarly to the semiconductor logic market in 2024H.
• The 1Q24F guidance is looking at sales and GM levels for both IC ATM and EMS to be similar to 1Q23 levels.
• Most customers will be back on the recovery path by at least 3Q24F.  

• NTGR is making a CEO change just as the business has stabilized. Patrick Lo has retired and is being replaced by CJ Prober 
• NTGR has also issued updated fourth quarter results with the business achieving positive non-GAAP operating margin
• NTGR is forecasting revenue of between $179 million and $189 million. We were already projecting revenue of $187.3 million and are keeping our estimate unchanged

• The BlokID team BlokID, a next-generation developer of privacy protection solutions for the digital advertising industry, has completed its US$1.25 million seed round of financing led by Ascend Vietnam Ventures and AppWorks.
• The Vietnamese startup will use the capital to accelerate product development, focus on user acquisition, and initiate market expansion, with an outlook to launch by Q2 2024. The company plans to roll out Google Analytics plug-ins and Financial Identity features to empower users further and safeguard their information.
• Also Read: Bitcoin and Ethereum simplified for a five-year-old Founded in July 2023, BlokID leverages blockchain technology to bring an independent, immutable source of truth to digital advertising.

• Q423 revenues of $6.2 billion, $100 million above the guided midpoint, up 6% QoQ and up 10% YoY
• Q124 guidance was for $5.4 billion at the midpoint, down 13% QoQ and flat YoY.
• We forecast 2024 Data Center growth of >70% YoY with potential for further upside

• Advantest reported strong Q3 results, driven by robust demand for memory testers
• The company raised its full-year guidance for revenue and operating profit to inline with analyst estimates
• Advantest’s stock price remains overvalued on AI-hype. We remain bearish with a potential downside of 25%.

• The Nikkei 225 data for the March 2024 rebalance is a wrap. The names are the same as before but there is likely less DISCO Corp (6146 JP) to buy.
• It’s still big, but smaller than before because of the difference between performance and the change in PAF required to be below 1%. A 4:1 share split would be optimal.
• I recommend a few positioning changes from before, and the Fast Retailing trade loses one short-term option but the longer-term one stays in place.

• JPX-Nikkei 400 is composed of common stocks listed on the Tokyo Stock Exchange. It is a free-float-adjusted market-value-weighted (capped) index composed of 400 constituents.
• A periodic review is conducted by the Index providers, the JPX Group and Nikkei Inc, in August every year. We look at the rankings of the potential ADDs/DELs every month.
• Below is a look at potential ADDs/DELs for the JPX-Nikkei 400 index rebal event to come in August 2024 based on trading data as of end-January 2024.

• The review period for the March rebalance ended 31 January. We expect the changes to be announced 23 February with the implementation taking place after the close on 8 March.
• We expect the index committee to continue using a 6-month minimum listing history resulting in three changes to the index.
• The potential inclusions have dropped but there has been significant outperformance versus the potential deletions. That could continue as positioning continues for the high expected impact on the stocks.

• Samsung’s earnings was recently reported, with memory revenues up nearly 50% in the fourth quarter
• This gain has been driven by very strong growth in AI and a normalization of inventory levels
• The memory business is approaching positive margins once again, and SK hynix is already profitable

• The review period for the March rebalance ended yesterday, the changes will be announced early March and implemented at the close of trading on 14 March.
• We forecast one change for each of the Secondary Battery, Bio, Internet and Game indices. There could be two changes for the BBIG Index.
• Douzone Bizon (012510 KS) is up 65.5% in the last month and we’d look to lighten positions on this move higher.

• MediaTek expects a reduced DOI level in 2024F while maintaining operating expenses and pricing discipline in 2023.
• The upgrade cycle has begun for devices equipped with AI functions. The Dimensity 9300 is just the first edge AI product for smartphones. 
• MediaTek does not predict a significant increase in demand and expects a steady demand for smartphones. 

• Mediatek’s results for 4Q23 exceeded expectations; Forward guidance also suggests that consensus forecasts for 2024 may need to be revised upward.
• Foresees the start of its “next growth phase” in 2024, with AI influencing mobile upgrades and the introduction of new products in late 2025, indicating potential growth through 2026E.
• Mediatek indicated that AI interest will drive high-end mobile devices to gain market share in 2024E.

• The 1Q24F guidance is expected to decrease by 2-3% QoQ. However, we believe there is a good chance of achieving a flat QoQ performance.
• Production is expected to be ready by 2027F, with the process likely to be prepared by 2025F and enter pilot run in 2026F.  
• The semiconductor market is expected to grow at a high single-digit rate, while the foundry market is expected to grow close to 10% YoY in 2024F.  

• UMC delivered full-year net income roughly in line with consensus forecasts, though reported a capacity utilization drop sequentially.
• Capacity utilization fell during the latest quarter despite strength from UMC’s 22nm & 28nm offerings due to older capacity weighing down performance.
• UMC’s latest US$3.3bn capex budget contrasted with the rising cost of advanced fabs shows how Intel’s Foundry business will be increasingly needed by the industry.

• One of the emerging trends in the Korean equity markets in the past several weeks has been the shift out of high beta, high P/E stocks to deep value stocks.
• In this insight, we will discuss about the top 10 stocks in Korea with highest net cash as percentage of market cap. 
• These 10 stocks are up on average 2.9% YTD, outperforming KOSPI which is down 5.9% in the same period.

• Canon Inc (7751 JP) announced 2023 full-year results on 30 January. Results were mixed. Revenues did OK. Net Profit underperformed expectations. 2024 Net Profit Guidance is 1% higher than consensus.
• Canon has a 15yr history of one kind of buyback. ¥50bn every time. 19 times in a row. Short (10 weeks max), sharp, executions (executed in 3-5 weeks). Every time. 
• This time offers a new buyback. ¥100bn. Over the space of a year. That’s only 3% of ADV but the shareholder structure is different than you think it is.

• Q423 revenues of $2.49 billion, marginally above the guided midpoint, up 3.6% QoQ but down 15.6% YoY. Net income was $583 million, down $158 million QoQ.
• Current quarter guidance of $2.3 billion, down 8% QoQ and also down around 5% YoY
• Interesting Q&A discussion on backlog. KLAC’s order book is risker than their peers due to their shorter lead times. Something to watch…

• TSMC: +13.5% ADR Premium, Historically High Spread Represents Short Opportunity
• UMC: -0.9% ADR Discount, Results Tomorrow Could Open Up Trade Opportunity
• ASE: +9.1% Premium, Historically High But Likely Best to Wait for Higher Levels

• UMC & Mediatek Results Today in Taiwan, Samsung Also Reporting; Taiwan AI Names Flying; Himax & Novatek Top Losers Ahead of Results.
• Semiconductor Surge: Southeast Asia Taking Center Stage Amid Taiwan’s Geopolitical Shift
• First Run of Tech/Semis’ Guidance Tells Us What Industries and Companies to Avoid

• This is our first report on web-based social media management solution provider, Sprout Social.
• In its most recent quarter, a comprehensive social media management software company, delivered positive Q3 results reflecting good progress in meeting their objectives.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• This is our first report on Rapid7, a renowned cybersecurity solutions provider.
• The company posted its third quarter 2023 financial results, highlighting an Annual Recurring Revenue (ARR) of $777 million and a growth of 14% over the previous year.
• Rapid7 also showcased strong demand for its integrated security operations solutions, particularly its consolidated offerings.

• This is our first report on mobile satellite services provider, Globalstar.
• 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.
• We have added reasonable forecasts of the annualized income statement and cash flows and carried out a DCF valuation of the company using its Weighted Average Cost of Capital (WACC) to determine a forecasted share price.

• This is our first report on DevOps platform provider, JFrog.
• Most importantly, the year-over-year growth of JFrog’s cloud business rose by 46%, contributing $30.6 million to the total revenue.
• Non-GAAP profit stood at $16.6 million, generating a free cash flow of $25.4 million.

• This is our first report on Cogent Communications Holdings.
• The company had a decent performance in the third quarter of 2023 highlighting the recent acquisition of the Sprint business on May 1, 2023, which expanded Cogent’s network and customer base and materially increased the scope and scale of their business.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Two months ago, Macnica Holdings Inc (3132 JP) launched a tender on semiconductor trading house Glosel (9995 JP). OK, but… it was too cheap at 0.71x book. Why?  
• Glosel is special because it has three main assets. 1) 61% of net assets are inventory (<3mos), 2) 34% of net assets are net receivables (<3mos), 3) 8+% is securities.
• It took two months to get approvals in place and two months of trading well through terms, and so now the terms have been bumped 16%. Thank Murakami-san.

• On the 26th January, proxy advisor Glass Lewis issued a report recommending Hollysys (HOLI US) shareholders vote against Ascendent’s merger. Two days later, ISS issued a similar opinion.  
• Both reports targeted HOLI’s efforts to maximize an Offer price. Elsewhere, some salient points were raised. But overall, there exists an air of naivety in their conclusions.
• HOLI’s EGM is scheduled for February 8th. The merger consideration of US$26.50/share is in line with, or above, the estimated values of Deutsche Bank’s fairness opinion.

• LRCX reported Q423 revenues of $3.76 billion, marginally ahead of the guided midpoint, up 8% QoQ but down 29% YoY
• Looking ahead, LRCX forecasted Q124 revenues of $3.7 billion, essentially flat sequentially.
• The memory recovery is happening, but only for HBM and node transitions. No spending on memory capacity additions means limited upside for LRCX. 

• Glosel (9995 JP) has recommended Macnica Holdings Inc (3132 JP)’s revised tender offer of JPY750 per share, a 16.3% premium to the previous JPY645 offer. 
• Murakami’s clever manoeuvring to build a 12.67% stake and propose a JPY750 competing offer has forced Macnica to bump its offer. 
• The minimum acceptance condition requires a 66.7% minority acceptance rate. This acceptance rate is achievable because the offer is attractive and Murakami is supportive. 

• On the 17th of January, we published an insight flagging an opportunity to put on a pairs trade long Naspers, short Prosus.
• Since the start of the year, Naspers’ underperformance relative to Prosus was, in our view, overdone.
• Naspers has outperformed Prosus by 3.98% over the last 8 trading days. We suggest closing out at current levels.

• Intel reported earnings last week. Intel was one of my favorite stocks last year, and I wrote about it here in “Is This the Intel Inflection”, where I successfully called the bottom in the stock.
• It’s worked pretty well, even against the SOXX index since then.
• I’ll summarize my thesis back then, update you now on what I think about Intel, and write about results and read-throughs.

Key points (machine generated)

• Mitek specializes in mobile image capture and digital identity verification solutions, with approximately 60% of its business in mobile image capture and 40% in digital identity verification.
• The company has experienced strong revenue growth, with a compound annual growth rate of 18% to 22% over the past one, three, and five years, reaching approximately $170 million as of September 2023.
• Mitek has focused on using profits from its mature mobile image capture business to build its identity verification segment, but the mobile deposit business has also grown at a similar rate, limiting portfolio rebalancing in recent years.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Team Internet’s FY23 trading update confirmed that trading has remained robust with double-digit sales growth across Online Marketing and Online Presence. The total revenue and EBITDA margin were slightly ahead of market consensus and our forecasts, both of which were upgraded in November 2023. Estimated FY23 net debt of US$74m was lower than our US$80.9m forecast, with operating cash conversion reverting to close to 100%. We maintain our FY24 estimates, but these could prove conservative, especially if advertising spend recovers. At 4.8x FY24e EV/EBITDA and 6.4x FY24e P/E, Team Internet’s rating looks low given the company’s growth profile, diversity and growing track record.

• A better week for HK stocks as A-shares rebound on National Team buying, a PBOC RRR cut, and potentially other measures to boost the market. Foreigners stopped selling; that helped.
• Southbound saw decent net buying on ETFs late in the week, but otherwise the week was pretty flat in single-stock land – net buying of SOEs, selling of tech.
• Net SOUTHBOUND buying was HK$4.5bn on the week, mostly through Shanghai (interestingly, 90+% of the decent NORTHBOUND buy was also through Shanghai). 

• The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc. 
• SOUTHBOUND flows were small positive and NORTHBOUND flows a decent buy. AH premia stopped rising. Chinese shares bounced. SOEs being bought. Tech being sold. Tencent seeing SB outflows, still. 
• New article in China Securities Journal hints at new measures on SOEs. Watch this space. Wouldn’t be short SOEs vs Privates on H/A basis. 

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads – Hollysys Automation Technologies (HOLI US), Probiotec Ltd (PBP AU), Shinko Electric Industries (6967 JP), Genetron Holdings Ltd (GTH US), JSR Corp (4185 JP).
• Lowest spreads – Tietto Minerals Ltd (TIE AU), Orecorp Ltd (ORR AU), Pact Group Holdings (PGH AU), Benefit One Inc (2412 JP), Benesse Holdings (9783 JP), T&K Toka. 

• SK Hynix reported Q423 revenues of 11.31 trillion won, up 25% QoQ and up 47% YoY
• Operating profit of 346 billion won, marking the first quarter of profit following four straight quarters of losses.
• SK Hynix is investing heavily in custom memory solutions driven by AI-related demand. It’s a far better and more profitable business model than the mainstream commodity one.

• Great Wall Motor’s revenue increased by 26%, but its profit increased by less than 5% in 2023.
• Huawei’s shipments increased 36% YoY in 4Q23 and was the only company to witness an increase among the top five sellers.
• Jack Ma, the founder, and Mr. Joe Tsai, the chairman, purchased Alibaba’s shares.

• This is our first report on SaaS solutions provider, Lightspeed POS Inc.
• The focus of the company’s management during the previous earnings was on projected future growth, a steady performance in its fiscal Q2 2024, and its key goals for the year.
• The company reported revenues of $230.3m, representing a 25% increase YoY, exceeding the projected revenue outlook of $210m-$215m.