Category

TMT/Internet

Dec 28
0

Daily Brief TMT/Internet: Hollysys Automation Technologies, SK Inc, Datamatics Global Services, Whispir Ltd, XL Axiata and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Hollysys (HOLI US): Dazheng Consortium “Trumps” Ascendent’s Bid
  • Updated NAV on SK Inc Post 660 Billion Pre-IPO Investment in SK Pharmteco
  • Datamatics Global Services Ltd: Forensic Analysis
  • Whispir (WSP AU) Backs Soprano’s Bump
  • XL Axiata (EXCL IJ) – Riding the Wave of Price Reparation and Convergence

Hollysys (HOLI US): Dazheng Consortium “Trumps” Ascendent’s Bid

By David Blennerhassett

  • On the 13 December, Bloomberg reported that the Recco-led group consortium was weighing a revised Offer to be “significantly higher than the $26.50-a-share cash offer from Ascendent Capital”
  • On the 24 December, a buyer consortium led by Dazheng Group announced an all-cash proposal of US$29.00/share, a 9.4% premium to Ascendent’s Offer. “Credible” financing is in place.
  • “The Consortium stands ready to engage with the Board“.  The Board should engage. The one curious aspect of this latest Offer is the apparent absence of Recco’s involvement. 

Updated NAV on SK Inc Post 660 Billion Pre-IPO Investment in SK Pharmteco

By Douglas Kim

  • It was reported today that SK Pharmteco completed a 660 billion won in pre-IPO funding valuing the company at 4 trillion won.
  • Prior to this investment, SK Inc owned a 100% stake in SK Pharmteco. After this investment, it is estimated that SK Inc will own about 83.5% stake in SK Pharmteco. 
  • Our base case valuation of SK Inc is NAV of 19.0 trillion won (NAV per share of 258,967 won), representing a 47% upside from current levels.

Datamatics Global Services Ltd: Forensic Analysis

By Nitin Mangal

  • Datamatics Global Services (DATA IN) or DGSL has seen a good operational performance especially since F23, on the back of a difficult IT macro environment. 
  • Yet there are some discomforts on the forensic side, especially related to cash component. Low cash yield due to significant current account balances in subsidiaries raises alarm bells. 
  • We find opaqueness regarding some important disclosures including Ind AS 115- Revenues and Ind AS 116- Leases. Decision to increase remuneration cap size also leaves us perplexed.

Whispir (WSP AU) Backs Soprano’s Bump

By David Blennerhassett

  • Soprano has upped its Offer for Whispir Ltd (WSP AU) to A$0.55/share, and has secured board support. 
  • Pendula has a higher (indicative) Offer of A$0.60/share; however Whispir sees Soprano’s terms as superior due to the “conditionality, uncertainty and timing of progressing to a binding transaction with Pendula”.
  • Soprano’s Offer for Whispir closes on the 10 January – unless extended. 

XL Axiata (EXCL IJ) – Riding the Wave of Price Reparation and Convergence

By Angus Mackintosh

  • XL Axiata (EXCL IJ) continues to stand as the most direct way to play the data demand in Indonesia as well as being the most convergent of the listed telcos.
  • Although it saw some seasonal slowdown in 3Q, the solid growth trajectory remains intact for this year with the completion of the Link Net restructuring driving convergence growth.
  • XL Axiata (EXCL IJ) raised data prices again in November and will continue to ride the wave of price reparation over the coming quarters in a more rational pricing environment. 

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Dec 27
0

Daily Brief TMT/Internet: Taiwan Semiconductor (TSMC), Taiwan Semiconductor (TSMC) – ADR and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • TSMC (2330.TT; TSM.US): The 1Q24F Revenue Outlook and the Progress for Intel, MediaTek and Samsung.
  • Taiwan Tech Weekly: PC Shares Clearly On Santa’s Nice List; Soaring After AI PC Releases; Dell Trade

TSMC (2330.TT; TSM.US): The 1Q24F Revenue Outlook and the Progress for Intel, MediaTek and Samsung.

By Patrick Liao

Taiwan Tech Weekly: PC Shares Clearly On Santa’s Nice List; Soaring After AI PC Releases; Dell Trade

By Vincent Fernando, CFA

  • PC Shares Soaring — After 1) Intel’s AI Everywhere AI chip launch, 2) Launch of First AI PCs, 3) Micron’s positive outlook for PCs in its latest results
  • Micron Analysis, Industry Takeaways: Memory Market TAM New Highs into 2025; SK Hynix Trade
  • Taiwan Dual-Listings Monitor: TSMC Premium at a Decent Short Level; ASE Short Interest Declining

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Dec 26
0

Daily Brief TMT/Internet: Gumi Inc, King Yuan Electronics Co, Ltd., Symbio Holdings, NetEase , Mediatek Inc, Hollysys Automation Technologies, uPI Semiconductor Corp, Taiwan Semiconductor (TSMC) – ADR and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • SBI To Buy Gumi (3903) Shares To Up Stake to Near 30% (And Try To Avoid Impairment)
  • KYEC (2449.TT): The Revenue Outlook Will Be an Upward Pickup in 2024F.
  • ABB’s Offer For Symbio (SYM AU): 7th Feb Shareholder Vote
  • Tencent/Netease: Netease Tops ’23 League Table with Most Games Approved
  • MediaTek (2454.TT): The Revenue Is Likely Upside Around 10% QoQ in 1Q24F.
  • Hollysys (HOLI US): Dazheng Ups the Ante with a US$29.00 Competing Offer
  • Power Semiconductor Specialist Will Benefit from AI Yet Lagging Key Customers’ Share Price Rallies
  • Taiwan Dual-Listings Monitor: TSMC Premium at a Decent Short Level; ASE Short Interest Declining

SBI To Buy Gumi (3903) Shares To Up Stake to Near 30% (And Try To Avoid Impairment)

By Travis Lundy

  • Today after the close, SBI Holdings (8473 JP) made an announcement it would buy (up to) 3.0mm shares of Gumi Inc (3903 JP) shares between tomorrow and end-March 2024.
  • SBI already owns 8.8mm shares, and this would bring them close to 30.0%. 
  • SBI did not specifically say they would buy on market, but the next 400,000 shares would require a large shareholder filing amendment. 

KYEC (2449.TT): The Revenue Outlook Will Be an Upward Pickup in 2024F.

By Patrick Liao

  • It’s a greater chance that there will be an upward pickup in 2024F revenue for King Yuan Electronics Co, Ltd. (2449 TT), but the magnitude is hard to predict in 1H24.  
  • It is expected the revenue to decline by approximately -5% in 1Q24F.
  • However, the demand for CoWoS at a corporate level is expected to increase by about 10% in 2024F .

ABB’s Offer For Symbio (SYM AU): 7th Feb Shareholder Vote

By David Blennerhassett

  • On the 1st November, cloud communication software outfit Symbio Holdings (SYM AU) backed Aussie Broadband Pty Ltd (ABB AU)‘s reduced cash/scrip Offer of A$2.99-$3.04/share, and entered into a Scheme agreement.
  • Superloop Ltd (SLC AU), which had previously made two cash/scrip Offers for Symbio, promptly walked.
  • Symbio’s Scheme Meeting has now been tabled for the 7 Feb, with implementation expected on the 28 February. The IE is supportive. This is done – and trading tight.

Tencent/Netease: Netease Tops ’23 League Table with Most Games Approved

By Ke Yan, CFA, FRM

  • China announced game approval for the December batch. The number of games approved has increased compared to recent months.
  • The pace of China game approval appears to be accelerating, to the same level as pre-tightening.
  • Netease scored two approvals while Tencent scored one. Netease finished the year with the most games approved.

MediaTek (2454.TT): The Revenue Is Likely Upside Around 10% QoQ in 1Q24F.

By Patrick Liao

  • For the upcoming revenue outlook, MediaTek Inc (2454 TT) is likely to reach an upside of around 10% QoQ in 1Q24F.
  • MediaTek plans to release 12 million units of the Dimensity 9000 series in 2024F.
  • Mediatek’s target markets include China, India, and Southeast Asia, with China remaining the primary market of focus.

Hollysys (HOLI US): Dazheng Ups the Ante with a US$29.00 Competing Offer

By Arun George

  • Dazheng (without Recco) has returned with a revised US$29.00 offer for Hollysys Automation Technologies (HOLI US), 9.4% higher than Ascendent Capital’s US$26.50 binding offer.
  • While Dazheng’s proposal represents an all-time high, it would likely not be a superior proposal based on the Ascendent merger agreement due to the clauses on financing and due diligence.
  • Nevertheless, to avoid the high risk that shareholders vote down the Ascendent offer and/or there are substantial dissenting shareholders, the Board will likely ask Ascendent to match Dazheng’s offer.  

Power Semiconductor Specialist Will Benefit from AI Yet Lagging Key Customers’ Share Price Rallies

By Vincent Fernando, CFA

  • UPI Semi is a specialist designer of electronic components and semiconductors for power management. Power management is a key performance factor for AI devices.
  • UPI’s clients include most of the world’s largest leading technology companies for semiconductor distribution and AI products.
  • UPI shares have lagged the strong performance of its clients — We see opportunity for UPI to now Outperform.

Taiwan Dual-Listings Monitor: TSMC Premium at a Decent Short Level; ASE Short Interest Declining

By Vincent Fernando, CFA

  • TSMC: 10.5% Premium — Still a Good Level to Short the Spread
  • UMC: Trading at -1.1% Discount — Uncompelling, Wait for Deeper Discount
  • ASE: 8.8% Premium — Still Wait for Lower Levels Before Going Long

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Dec 25
0

Daily Brief TMT/Internet: Posco DX, Apple , Quantum Solutions Co Ltd, Tencent and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Index Rebalance & ETF Flow Recap: STAR50, SET50, AMFI, KOSDAQ150
  • 2024 High Conviction: Apple’s AI Foray & Services to Power Its Journey to USD 4 Trillion Valuation
  • Quantum Solutions (2338 JP): Look Again at Small Cap Play on AI Servers and Web-3.0 Gaming
  • China Consumption Weekly (25 Dec 2023): Tencent, NetEase, NIO, Xpeng, Alibaba, Meituan, Douyin

Index Rebalance & ETF Flow Recap: STAR50, SET50, AMFI, KOSDAQ150

By Brian Freitas

2024 High Conviction: Apple’s AI Foray & Services to Power Its Journey to USD 4 Trillion Valuation

By Srinidhi Raghavendra

  • Despite being a hated stock among the Super Sevens, Apple shares are up >51% YTD this year. Apple has had little to claim for within captivating AI hype.
  • Apple is not a first mover. Its reputation is of a late comer. But its superior products with mind bending experiences blows competition out of the water.
  • Outperformance of iPhone 15, deepening services penetration, and roll out of AI-features will propel Apple to a USD 4 trillion market cap in 2024.

Quantum Solutions (2338 JP): Look Again at Small Cap Play on AI Servers and Web-3.0 Gaming

By Scott Foster

  • Quantum Solutions has given up 63% of its recent gain but has more NVIDIA GPU related orders in the pipeline. Keep an eye on the stock and the news flow.
  • The recent upward revision to sales and profit guidance has been followed by the announcement of a capital and business tie-up with Hajime Tabata’s JP Games.
  • The addition of Web-3.0 gaming to distribution of AI servers and Arm-based edge computing hardware could change the nature of the investment.

China Consumption Weekly (25 Dec 2023): Tencent, NetEase, NIO, Xpeng, Alibaba, Meituan, Douyin

By Ming Lu

  • Tencent and NetEase’s stock prices plunged after the release of the new law about online game.
  • China Passenger Car Association expects NEV will grow by 37% for 2023.
  • NIO got US2.2 billion investment from CYVN Holdings based in Abu Dahbi.

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Dec 24
0

Daily Brief TMT/Internet: Tencent and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • HK Connect SOUTHBOUND Flows (To 22Dec23); CNOOC/Energy To The Buy Side; Tencent Heavily Sold, Again.

HK Connect SOUTHBOUND Flows (To 22Dec23); CNOOC/Energy To The Buy Side; Tencent Heavily Sold, Again.

By Travis Lundy

  • SOUTHBOUND flows showing reversion tendencies still. Hs up vs As only slightly. Liquid Hs were down vs As. 
  • SOUTHBOUND saw HK$144bn of net INflows on the week to 22 Dec, which was HK$4bn of Tencent net sales and net buying of a bunch of ETFs.
  • Some banks and energy names were top net inflows as a percentage of ADV. This week was heavy for SOUTHBOUND, quiet for foreigners, next week may be quiet for both.

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Dec 23
0

Daily Brief TMT/Internet: Tencent, Micron Technology, Samsung Electronics and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • China Gaming Restrictions 2.0
  • Micron Analysis, Industry Takeaways: Memory Market TAM New Highs into 2025; SK Hynix Trade
  • Upgrading Mexico to Overweight; Technology Remains Global Leadership; Overall Bullish Outlook Intact

China Gaming Restrictions 2.0

By Mio Kato

  • China has tightened restrictions on online games again driving significant falls in names such as Tencent and NetEase. 
  • While the move may surprise some given prior moves to restart approvals in our view the overall trend of regulation is not especially surprising. 
  • In particular, the tightened regulations appear to target the most important drivers of mobile gaming profitability and today’s large drops may actually be underreactions.

Micron Analysis, Industry Takeaways: Memory Market TAM New Highs into 2025; SK Hynix Trade

By Vincent Fernando, CFA

  • Relative Value Trade in Micron Has Worked Since Our Last Piece; Results Blow Away Expectations
  • Memory Pricing Improvement Continues, Management Expects Pricing Increases Through Calendar Year 2024 and 2025
  • We Remain Structurally Long Memory; Now See Relative Value in SK Hynix

Upgrading Mexico to Overweight; Technology Remains Global Leadership; Overall Bullish Outlook Intact

By Joe Jasper

  • Recent developments have continued to reinforce our bullish outlook on global equities (MSCI ACWI).
  • There is no reason to fight this bullish trend, and we continue to expect more upside into the early part of 2024.
  • Upgrading Mexico to Overweight; Technology Remains Global Leadership; Actionable Themes: 44 individual stock buy recommendations within Technology, Services, Consumer Discretionary, Financials, and Materials

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Dec 22
0

Daily Brief TMT/Internet: Plover Bay Technologies, Posco DX, Intel Corp, UBTech Robotics, Telefonica SA, Japan System Techniques Co, Carta Holdings, Inc. and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Plover Bay (1523 HK): Interesting Net Cash /8% Dividend Yield Play/ With ROEs Above 50%
  • KOSDAQ150 Adhoc Index Rebalance: TEMC Added; Short Covering Expected in PoscoDX
  • Intel’s AI Everywhere In New York
  • UBTech Robotics IPO – Quick Thoughts on Valuation – Too Hefty a Premium for Slowing Growth
  • SEPI/Telefonica: Acquisition of a 10% Stake
  • 2Q Follow-Up – Japan System Techniques (4323 JP)
  • 3Q FOLLOW-UP – Carta Holdings (3688 JP)

Plover Bay (1523 HK): Interesting Net Cash /8% Dividend Yield Play/ With ROEs Above 50%

By Sameer Taneja

  • Plover Bay Technologies (1523 HK) is another exciting play from the stable of net cash (12% of market cap) and high dividend yield (8% FY22) companies.  
  • The company develops networking technologies that enable supercharged connectivity. Users can build always-on networks anywhere by combining fixed, mobile, and satellite connectivity. Its major brands are Peplink and Pepwave.
  • Plover Bay is a high net margin (25%) and high ROE (>50%) business that has 9-10% CAGR revenue growth (trading at 11x PE) with catalysts up ahead. 

KOSDAQ150 Adhoc Index Rebalance: TEMC Added; Short Covering Expected in PoscoDX

By Brian Freitas

Intel’s AI Everywhere In New York

By William Keating

  • Intel’s “AI Everywhere” event turned out to be little more than last minute launches client and server products promised for 2023
  • While these products have little new in the way of ground-breaking AI hardware, the entire event was infused with AI marketing to the highest degree
  • Ostensibly Intel’s great hope in AI hardware acceleration, Gaudi, featured solely as a last minute gimmick announcing that Gaudi3 was “out of the fab and into the lab”. Yawn!

UBTech Robotics IPO – Quick Thoughts on Valuation – Too Hefty a Premium for Slowing Growth

By Ethan Aw

  • UBTech Robotics (9880 HK) is looking to raise about US$168m in its upcoming HK IPO, after downsizing from an earlier reported float of up to US$700m.
  • UBTech Robotics is engaged in artificial intelligence (AI)-empowered robotics in China, dedicated to the innovation of humanoid robots and development and sales of smart service robotic solutions.
  • In our previous note, we looked at the company’s performance and its PHIP updates. In this note, we share our quick thoughts on valuation.

SEPI/Telefonica: Acquisition of a 10% Stake

By Jesus Rodriguez Aguilar

  • The Spanish Cabinet has agreed on the acquisition of up to 10% of the share capital of Telefonica SA (TEF SM) (c.€2.2 billion), higher than the 5% initially mentioned.
  • This should move the market as it represents 48 trading days. This also means that the Government will likely authorise the purchase of up to 9.9% by STC.
  • The Kingdom of Spain 10-y benchmark bond yield is 2.9%, while the 24e dividend yield of Telefonica is 8% (source: IBES), therefore the operation makes financial sense.

2Q Follow-Up – Japan System Techniques (4323 JP)

By Sessa Investment Research

  • Fully independent DX provider: Japan System Techniques (JAST) is an independent system integrator that develops and sells software and systems, which celebrated its 50th anniversary.
  • The company develops systems for customers in a variety of industries and sectors, including finance, manufacturing, distribution, services, public services, telecommunications, transportation, and science and technology.
  • Furthermore, as a developer, the company has three main JAST-branded software offerings for its customers, namely GAKUEN for the education industry, BankNeo for the financial industry, and JMICS (JAST Medical Insurance Checking System) for the medical industry and the profitability of these own-brand businesses is very high.

3Q FOLLOW-UP – Carta Holdings (3688 JP)

By Sessa Investment Research

  • In 2023, the first year of CARTA Holdings’ new medium-term management plan, the company made a solid push to reform its business and organizational structure with the aim of executing a sharp recovery in business performance.
  • It moved forward with narrowing its focus, integrating four direct sales subsidiaries in the digital marketing business, and withdrawing from the low-profit game and hometown tax payment business in the internet-related services business.
  • In addition, the company announced and implemented additional measures to reduce fixed costs to the tune of ¥1 bn, including by calling for voluntary retirement during FY23/12, as its earnings may fall further than initially expected before bottoming out, mainly for reservation-based ads. 

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Dec 21
0

Daily Brief TMT/Internet: LG Display, Whispir Ltd, SiteMinder, Nexchip Semiconductor , Tencent, Viva Republica, Micron Technology and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Arb Trading with Stock Rights in Korea: A Basic Guide Featuring LG Display Offering
  • Whispir (WSP AU): Soprano & Pendula Jostle for Control
  • Quiddity Leaderboard ASX Mar 24: Allkem, Newmont, Costa, and Many More
  • STAR50 Index Rebalance Preview: Four High Impact Changes in March
  • [Blue Lotus Sector Update]: Latest Developments in Short Video Point to Possibilities
  • Key Beneficiaries of a Potential Viva Republica IPO in 2024
  • The First Semi Micron to Guide 1Q24; Conservative Now but Likely Raise Later

Arb Trading with Stock Rights in Korea: A Basic Guide Featuring LG Display Offering

By Sanghyun Park

  • Unlike typical Korean stock rights arbitrage, LG Display’s significant equity offering and active stock futures trading anticipate a spread opening, akin to the recent Hanwha Ocean scenario.
  • In contrast to Hanwha Ocean, the absence of major sellers, like KDB, sets this event apart. LG Electronics, the major shareholder with a 37.9% stake, intends to participate.
  • Despite differences from Hanwha Ocean, LG Display’s high retail shareholder presence implies a substantial likelihood of stock rights overhang, even without players like KDB.

Whispir (WSP AU): Soprano & Pendula Jostle for Control

By David Blennerhassett

  • On the 6 November, cloud communication outfit Whispir (WSP AU)  announced a A$0.46/share unconditional Offer, in cash, from mobile messaging software play Soprano Design.
  • The Offer price was a 92% premium to Whispir’s recent private placement, and a 60% premium to the undisturbed price. Whispir rejected the Offer.
  • Pendula subsequently emerged with a A$0.57/share NBIO. Soprano “countered” with A$0.52/share. Pendula upped its indicative Offer to A$0.60/share. An independent expert’s fair value is between A$0.486/share-A$0.565/share.

Quiddity Leaderboard ASX Mar 24: Allkem, Newmont, Costa, and Many More

By Janaghan Jeyakumar, CFA

  • In this insight, we take a look at the potential index changes for ASX 300, 200, 100, 50, and 20 in the run-up to the March 2024 index review.
  • I expect one change for ASX 20, one change for ASX 100, and four changes for ASX 200 during the March 2024 index rebal event.
  • Separately, there could also be one intra-review change for ASX 200 in February 2024.

STAR50 Index Rebalance Preview: Four High Impact Changes in March

By Brian Freitas

  • The review period for the March rebalance ends 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 four changes to the index.
  • One way turnover is estimated at 3.3% resulting in a one-way trade of CNY 4,717m. The impact on the deletions will be much larger than that on the inclusions.

[Blue Lotus Sector Update]: Latest Developments in Short Video Point to Possibilities

By Ying Pan

  • We view both Weixin Video Account (WVA) and Douyin China as secondary assets to their respective parents, which in our view, may lead to them forming…(TBC)
  • However, rising competition in the short-play (短剧) market may put the two businesses in more direct confrontation, which may delay or diminish the chance for two to work together;
  • We view Tencent as the likely winner in the continuing evolution of short video as it considers various options to maximize the value of WVA traffic.

Key Beneficiaries of a Potential Viva Republica IPO in 2024

By Douglas Kim

  • It was reported in numerous local media that Viva Republica has sent several RFPs to several large domestic securities companies to be underwriters of a potential IPO in 2024. 
  • Viva Republica is one of the largest Korean fintech companies. Market value of Viva Republica is estimated at more than 9 trillion won.
  • E World, Hanwha Securities, Hana Financial, and Korea Electronic Certification Co are major public companies that should benefit from the listing of Viva Republica. 

The First Semi Micron to Guide 1Q24; Conservative Now but Likely Raise Later

By Andrew Lu

  • Driven by stronger PC/networking DRAM sales, Micron reports 5% stronger 4Q23 sales, 10-13ppts q/q margin improvement and 34% y/y decline in MOI to 5.2 months;
  • Micron guides 1Q24 sales growth 8-16% q/q and 38-49% y/y and gross margin of 12%, beating Bloomberg consensus estimates by 6ppts;
  • Rooms to raise: 1. 1Q24 sales of 18% q/q likely; 2. Turning profits sooner than expected; 3. +Free cash flow in 2024; 4. HBM3E for GH200/H200 to improve mix, margin. 

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Dec 20
0

Daily Brief TMT/Internet: Taiwan Semiconductor (TSMC), Gaia and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • TSMC Chairman to Retire, + or — Impacts to Shareholders
  • Gaia, Inc. – Good Momentum Going into 2024

TSMC Chairman to Retire, + or — Impacts to Shareholders

By Andrew Lu

  • Chairman 69 years old Dr. Liu will retire and 70 years old CEO Dr. Wei will step up. What story do we believe? Will TSMC to regain its strong outperperformance?
  • Positive impacts: we expect Arizona fab equipment move-in and ramp up might be further delayed if no subsidies are granted; two teams competing to one voice/team/direction.
  • Three risks: 1. Dr. Wei at his age of 70 without a strong management backup; 2. Dr. Wei might make a wrong decision deeply; 3. absolute power corrupts.

Gaia, Inc. – Good Momentum Going into 2024

By Water Tower Research

  • We recently caught up with management to congratulate James Colquhoun on his promotion to CEO.
  • We also got a good update on the business as well as some early indications of trends and management focus for 2024.
  • As indicated on the 3Q23 earnings call, new member growth is continuing at a healthy clip and management expects to close 2023 at around 800k members.

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Dec 19
0

Daily Brief TMT/Internet: Link Administration, LG Display and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Link Admin (LNK AU): Mitsubishi UFJ’s Bittersweet Scheme
  • LG Display: Announces a Rights Offering Capital Raise of 1.36 Trillion Won
  • Link Admin (LNK AU): MUFG’s Underwhelming Binding Offer

Link Admin (LNK AU): Mitsubishi UFJ’s Bittersweet Scheme

By David Blennerhassett

  • Link Administration (LNK AU), the largest provider of services in Australia’s superannuation administration industry, has entered into a Scheme with Mitsubishi UFJ Financial Group.
  • MUFJ is offering long-suffering Link shareholders A$2.10/share (in cash) plus a A$0.16/share dividend (25% franked), or a 32.9% premium, all-in, to the undisturbed price. It has not been declared final. 
  • The Offer has the board’s backing. A Scheme Meeting is expected to be held in May with possible completion in June 2024. 

LG Display: Announces a Rights Offering Capital Raise of 1.36 Trillion Won

By Douglas Kim

  • LG Display announced today that it will conduct a rights offering capital raise worth 1.36 trillion won. 
  • The rights offering capital raise involves 142 million shares, which represent 39.7% of its existing outstanding shares. 
  • We believe this rights offering will have a negative impact on LG Display’s share price as it will significantly dilute existing shareholders. 

Link Admin (LNK AU): MUFG’s Underwhelming Binding Offer

By Arun George

  • Link Administration (LNK AU) has entered a SID with Mitsubishi UFJ Financial (MUFG) (8306 JP) at A$2.26 (A$2.10 scheme consideration + A$0.16 dividend), a 32.9% premium to the undisturbed price.
  • The presence of several substantial shareholders, lack of irrevocables, a light offer, recent derisking of the business and a long-dated offer pose a challenge for the scheme to get up. 
  • MUFG’s offer could spark a rival offer, but Link’s long-suffering shareholders have endured a history of failed bids. At the last close, the risk/reward is unfavourable.

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