TMT/Internet

• STAR CM Holdings (6698 HK), a variety program intellectual property creator and operator, was listed last December and promptly gained 475% by early August. All good so far.
• Shares cratered on the 18 August (-23.4%) and are currently 76% adrift from its recent high. The reason? A viral clip from late pop diva Coco Lee discussing unfair treatment.
• The music competition show, in which Coco appeared, pushed back on any impropriety; however, its broadcaster has temporarily suspended the program. This is no easy fix.

• Telkom Indonesia (TLKM IJ)‘s 1H2023 results looked solid but drilling down 2Q2023 looked a lot more encouraging in terms of growth and higher ARPUs for Telkomsel.  
• Ongoing digital initiatives are yielding positive results and Indihome continues to register positive results, with its merger with Telkomsel underlining convergence strategy. Data centre consolidation looks like a future spin-off. 
• Telkom continues to enrich its digital ecosystem with services and make it more accessible to less affluent subscribers. Valuations remain attractive at less than 5.0x forward EV/EBITDA

• Huawei’s new Mate 60 Pro phone has made many wonder if it has worked around U.S. technology restrictions to produce a 5G-capable chip domestically.
• Nvidia hits new all-time highs… Taiwan AI-supply chain stocks are surging again.
• Dell will report earnings — Look for PC upgrade cycle color and AI PC comments. SEMICON Taiwan is coming soon, we will attend.

• TSMC: 9.2% premium — Trending down, can consider shorting the ADR vs. the local.
• ASE: 10.5% premium is historically high — Short the ADR vs. the local.
• ChipMOS: -0.4% discount, ADRs have lagged Taiwan shares — Long ADR vs. local.

• We visited Yageo’s headquarters to learn more about the business and strategy. We expect revenue quality to improve, margins to rise through 2025E, and possible accretive acquisitions.
• The company is a heavily shorted stock based on our short model — This implies short squeeze potential we believe. The company has over US$1.5bn of dry powder for acquisitions.
• We rate Yageo as a Structural Long with a NT$690 target price. Potential upside catalysts outnumber downside catalysts in our view.

• Vietnamese tech start-up VNG (VinaGame) (VNG US) has filed for an IPO in the US and according to news media outlets, the company plans to raise proceeds of around US$300-400m.
• VNG’s business model resembles that of China’s Tencent (700 HK) with games accounting for most of VNG’s revenues. Other business segments are in early stages of monetisation.
• Our analysis suggests that VNG’s businesses have strong potential and the company could further reduce its operating losses with scale and further financial discipline.

• Keep Inc (3650 HK) , the largest online fitness platform in China, announced interim results for the six months ended Jun-23. The overall revenue growth is slowing down. 
• The company completed its Hong Kong IPO of ~10.8M shares at HK$28.92 (bottom of the range) and raised ~HK$192M (~$25M) of net proceeds. CICC led the offering.
• Keep appears well capitalized to outperform despite China’s temporary slowdown in fitness activities. I remain cautious on Keep stock after a downsized IPO, but I like the long-term fitness story. 

• It may take some time before shareholders can see how Kahoot’s significant investments in market share and business growth pay off in a positive bottom line.
• GS AM already has c.59% and the current extension lasts until 8 September. Spread is 2.9%/15.4% (gross/annualised, assuming settlement by 13 November).
• Taking a NOK 31.2 break, the last closing share price implies just 74% probability of deal completion, however I believe the spread will close following. I’d be long the shares.

• Elan is positioned to win from a coming PC upgrade cycle, which has been indicated by companies such as Micron, Microsoft, Intel, and Asustek among others.
• Elan is one of the institutionally most-underheld shares in our universe based on our analysis. Windows 11 adoption has been rising and will accelerate with a PC upgrade cycle.
• We’ve updated our Elan model, we continue to rate the shares Outperform and have a NT$142 target price. Moreover, the stock’s past all time remains 65% above current share price.

• CHOYS, a SaaS insurtech platform for corporate employees in Southeast Asia, has closed a US$1.1 million seed funding round with investors, including Wing Vasiksiri, Foremast, Antler, and Fintech Nation Fund. 
• The company will use the money for its go-to-market strategy across Southeast Asia and to bolster its product development initiatives.
• Founded by Sharon Li and Vanessa Chen, CHOYS aims to make work life more meaningful and humanised.

• Vng (VNG US), Vietnam’s leading internet platform, aims to raise up to US$300m in its US IPO.
• VNG is Vietnam’s leading homegrown digital ecosystem, as per the company, with diverse product offerings across games, communications and media, fintech and other opportunities
• In this note, we talk about the positive aspects of the deal.

• Yesterday (28 August) software provider Energy One Ltd (EOL AU)  announced an indicative Offer, by way of a Scheme, from STG at A$5.85/share, a solid 44% premium to last close. 
• Energy One has granted STG due diligence on an exclusive basis and the board is supportive if terms are firmed. All looks good. However …
• … Vaughan Busby, a NED and founding CEO of Energy One, is not aligned with the board. And he holds ~14%. 

• Last week I wrote about another situation, noting Equity Offering Into TOPIX Inclusion is a standard construct. Here we have another. 
• DX and HR Support company Core Concept Technologies Inc (4371 JP) today announced a large (it ups Real World Float by 64%, and is 33 days of ADV) secondary offering.
• The “reason” for the offering mentions a desire to move to TSE Prime in future.

• Our NAV valuation of Zeus Co suggests an implied price target of 32,991 won, which is 13% lower than current share price. 
• Given the lack of upside, we would avoid Zeus shares at current prices.
• Currently, JET Co is listed on Tokyo PRO Market Exchange. JET Co is expected to switch its listing to the Tokyo Standard Market Exchange. 

• Zeus Co Ltd (079370 KS), a maker of semiconductor equipment, flat panel display equipment, and facility automation solutions, intends to spin off 95%-held J.E.T. Co (6228 JP) next month.
• J.E.T., a  semiconductor etching equipment play, will list on the 25 September. Pricing is expected around the 5 September. 
• Zeus’ share price has fallen 33% in the past month. That may be justified. 

• ARM Holdings (1822695D US) is the world’s most widely licensed and deployed processor. Softbank Group (9984 JP) seeks to raise about US$6-10 billion by listing ARM on Nasdaq.
• We previously discussed the IPO in ARM Holdings IPO: The Bull Case and ARM Holdings IPO: The Bear Case. 
• Our valuation analysis suggests that the rumoured target valuation of US$60-70 billion is unjustified. Our base-case DCF valuation is US$44.0 billion. 

• We analyze the most shorted stocks in Taiwan and highlight notable AI supply chain stocks who have have some of the highest short interest vs. float in the market.
• Gigabyte Technology (2376 TT) , Global Unichip (3443 TT) , Gold Circuit Electronics (2368 TT) , Inventec Corp (2356 TT) , Mitac Holdings (3706 TT) – high short squeeze risk.
• Some Apple (AAPL US) supply chain stocks, Display-related, and Memory-related stocks are also heavily shorted.

• In this insight, we take a look at the potential ADDs/DELs for Thailand’s SET50 index rebalance in December 2023.
• At present, I see JMT Network Services (JMT TB) as an expected ADD and Central Plaza Hotel (CENTEL TB) as an expected DEL.
• Separately, Delta Electronics Thai (DELTA TB) is two trading days away from skipping the MSM list in August 2023 and avoiding deletion in the December 2023 rebalance.

• VNG (VinaGame) (VNG US), Vietnam’s leading internet platform, aims to raise up to US$300m in its US IPO.
• VNG is Vietnam’s leading homegrown digital ecosystem, as per the company, with diverse product offerings across games, communications and media, fintech and other opportunities
• In this note, we talk about the not-so-positive aspects of the deal.

• We spoke to Gogoro (GGR US), a beaten-down and under-covered Taiwan EV play listed in the US — As part of a hunt for contrarian plays.
• The company has faced headwinds recently, with hardware sales relatively weak vs. its local market. The battery swapping business is compelling and steadily growing however.
• We find the company fairly valued unless it can show more growth — We value it as two parts, a EV 2-wheeler hardware business and an infrastructure-like battery swapping business. 

• Nearly US$20bn has flowed into mainland China listed ETFs since 18 July and could be driven by the National Team supporting the market.
• Most of the inflows have been focused on large cap indices including CSI 300, STAR50, CSI 500, SSE50, ChiNext and other sectoral and thematic ETFs.
• The largest impact has been on the SSE STAR50 (STAR50 INDEX) constituents, but that has not stopped the slide in the stocks.

• Vietnam’s tech giant, VNG, filed for US listing last week (valuation TBC).
• Given the country’s current foreign ownership restriction, the listing will be done via an offshore entity that effectively controls the company through contractual agreements.
• Investors should be aware of the risk, esp. after previous market concerns surrounding Chinese tech companies’ VIE structure.

• NVIDIA Q2’CY23 revenues of $13.51 billion, up 88% QoQ, up 101% YoY, blowing way past the $11 billion guidance midpoint.
• Current quarter revenue is expected to be $16.00 billion. This will be a roughly 2.7x increase YoY 
• Are we in the middle of witnessing a bubble of dot.com era proportions?

• EQT offers €16/share to delist SUSE (SUSE GR) (split into consideration and interim dividend) and merge it into a Luxembourg SA. On 24 August, EQT published the offer document.
• There will be no squeeze-out. The multiples offered (4.8x EV/NTM Fwd Revenue, 14x EV/Fwd NTM EBITDA, source: IBES) are generally consistent with European software companies.
• With the stock trading at a 3% gross spread, I see limited upside from here and no interloper risk. Annualised spread is 33.4%. Long and tender.

• Following takeover rumors surrounding New Relic Inc (NEWR US) , private equity firms finally agreed to acquire a US-based low-cost observability provider for ~$6.5B.
• American private equity firm Francisco Partners and global alternative asset manager TPG offered $87 per New Relic Inc (NEWR US) share in an all-cash transaction.
• The New Relic Inc (NEWR US) Board of Directors approved the buyout deal, and is expected to close in late 2023 or early 2024.

• Paycom Software managed to exceed analyst expectations in terms of revenue and earnings.
• The company’s initiative to simplify clients’ experiences was evident by introducing tools like Everyday and the Client Action Center.
• As Paycom continues to execute its strategies and capitalize on its expanding market opportunities, its potential for sustained success remains promising.

• Pinterest delivered an all-around beat in the most recent quarterly result.
• The company’s strategic focus on core differentiators and visual discovery led to increased user engagement and expansion of the user base.
• Despite challenges in the advertising environment, Pinterest achieved consistent year-on-year revenue growth and margin expansion.

• Amidst whispers of significant financial moves, BlackBerry Ltd, the erstwhile leader in business mobile technology, has become a focal point for Veritas Capital, a major private equity player.
• This frenzy was not entirely unpredictable; BlackBerry had hinted at major strategic shifts in May, even suggesting possible diversification of its business segments.
• The company, once synonymous with smartphones, ceased its phone production and even pondered over selling its iconic mobile patents.

• Comms Group Ltd (ASX:CCG) has reported FY23 earnings and provided a more detailed and narrower range for both revenue and EBITDA guidance in FY24.
• The result was largely in-line with expectations and with guidance already provided.
• Revenue increased 27% and adjusted EBITDA ~17% as the onPlatinum acquisition contributed for a full 12-months and investment was made in the Global business for future growth. 

• Forrest Li: “Look How They Massacred My Boy” When CEO Forrest Li announced SEA Ltd’s Q2 results in mid-August, he was probably expecting a pat on the back.
• After all, the team at SEA Ltd had slogged through fire and brimstone over the past year trying to bring the company back to profitability.
• After all, the team at SEA Ltd had slogged through fire and brimstone over the past year trying to bring the company back to profitability.

• As expected, the index committee has used a 6-month minimum listing history and that results in two changes to the SSE STAR50 (STAR50 INDEX) in September.
• Piotech (688072 CH) and Hwatsing Technology (688120 CH) will replace Suzhou Nanomicro Technology (688690 CH) and Zhuhai CosMX Battery (688772 CH) in the index.
• One-Way turnover is estimated at 2.83% and will result in a one-way trade of CNY 3,562m. There does not appear to be a lot of pre-positioning on the stocks.

• ARM Holdings (1822695D US) is the world’s most widely licensed and deployed processor. Softbank Group (9984 JP) seeks to raise about US$6-10 billion by listing ARM on Nasdaq.
• In ARM Holdings IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on the deteriorating annualized contract value trajectory, declining ARM-powered chip shipments and revenue, ARM China overhang and red flag transactions involving SoftBank.

• Nvidia blew the doors off Street expectations last week, but the market reacted with semiconductor stocks turning red on the day. Is the relief rally over?
• We conclude from our review of technical conditions that while breadth indicators argue for a deeper correction, that day may not have arrived just yet.
• Sentiment is too bearish and should put a floor on stock prices in the short term. The relief rally probably has further room to run.

• NetEase’s 2Q rev. miss cons. by (3.08%) and non-GAAP net income beat cons by 50.6%.
• We anticipate that former legacies will continue to be under pressure. However, the 3Q23 is expected to show strong performance with new titles like “Justice Mobile” and “Racing Master.”
• We have raised our annual revenue expectations for “Justice Mobile” and maintain an optimistic view of NetEase’s upcoming pipeline. We increased to TP US$ 105, implying 17x PE in 2023

• The JPX Nikkei 400 index rebalance will take place on Wednesday, MSIC on Thursday and HSI, HSCEI, HSTECH and HSCI on Friday.
• There are review cutoffs for the MVIS family of indices, and multiple announcements of changes to various indices during the week.
• There were inflows to mainland China ETFs, iShares India ETF (INDA), Ishares India Small-Cap (SMIN) and iShares EmergingMarkets ex China (EMXC) while there were outflows for iShares Emerging Markets (EEM).

• Why is JSR Corp (4185 JP) trading wide? FUD and Flows.
• Intouch Holdings (INTUCH TB) plumbs new 12-month lows for its implied stub, and NAV discount as the former PM returns from exile. 
• You would NOT want to short M&A Research Institute (9552 JP)  into the inclusion. But the ascension to TOPIX is not a surprise.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• ARM Holdings finally made its IPO filings public, while Doosan Robotics too kicked of its much awaited listing.
• In the placement space, Union Bank Of India (UNBK IN) managed to upsize its offering, while APA Group (APA AU) pulled off a non-accretive acquisiton.

• Gartner delivered a strong result and managed an all-around beat in the last quarter, marked by double-digit growth in revenue, along with high single-digit growth in contract value.
• Additionally, Gartner reported excellent free cash flow during the quarter.
• The company’s focus on research as its primary revenue segment was highlighted, with significant growth in research revenue during the quarter.

• Zebra Technologies’ results were a major disappointment as the company failed to meet Wall Street’s revenue and earnings expectations.
• Weaker demand and cautious consumer spending patterns throughout Zebra’s end markets impacted its second-quarter performance.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

AAC Technologies’ results were weak as expected, with the top line and gross margin both lower. Overall revenue fell 2% y-o-y to CNY 9.22 bn for H1/23. Gross profit declined 27.2% to CNY 1.3 bn, with the gross margin down 4.8 ppts to 14.1%. This was largely due to market competition for the optics and acoustics business, as well as changes in the product mix. Despite the muted sales performance, the company deleveraged further and achieved strong FCF, driven by increased CFO and reduced capex. Liquidity appears to be sound, with 4.4x LTM Cash/ST Debt. Management guided for the optical lens gross margin to be positive in Q4.

• Electronic Arts delivered a mixed set of results in the last quarter, with revenues below the analyst consensus.
• The company achieved net bookings of $1.6 billion, up 21% yearly, due to continued growth across the EA SPORTS FIFA ecosystem and the release of Star Wars Jedi: Survivor.
• Electronic Arts executed across its business during the quarter, introducing 5 new high-quality titles and offering over 145 content upgrades across 37 titles.

• Despite the uncertain financial situation around the world, Global Payments managed to exceed analyst expectations in terms of revenue as well as earnings.
• The company once again produced excellent organic growth in the Merchant Solutions business, driven by the continuous success of their companies that use technology.
• This quarter, they again achieved significant revenues, outpacing the impressive results of the previous quarter.

• SolarEdge Technologies delivered mixed results in the quarter, with revenues failing to meet analysts’ expectations but above-par earnings.
• SolarEdge’s solar business generated $947 million in revenue, while its non-solar businesses generated $44 million.
• Their solar business revenue increased due to significant revenues in Europe.

• Revu Corporation is the number one influencer platform company in Korea with the largest number of influencer members in the industry.
• The IPO price range is from 11,500 won to 13,200 won. The maximum total offering amount is 29.5 billion won. 
• The bankers used three companies including DearU, Silicon2, and Connectwave as comparable companies for Revu Corp. The average P/E of the comps is 32.6x.

• Last week (Aug. 18) we discussed the 10-year Treasury yield and DXY testing respective resistance (4.3%-4.35% and $103.50-$103.70).
• As long as no decisive breakouts in the 10-year yield or DXY, we were buyers on the pullback to $93 on MSCI ACWI (ACWI-US).
• Outside of our overweight countries (Japan, India, Taiwan, Greece), defensive Sectors continue to lag. We highlight buys in Technology, Services, Consumer Discretionary, Industrials, Materials/Energy, and Financials.

• Local press states that Samsung Electronics Pref Shares (005935 KS)sold shares as they look to invest in their future capex
• The capex amount for 2023 will be around 40-50 trillion KRW and it doesn’t seem like W3 trillion is a needle mover
• With a new 3 year shareholder return plan, I would think maybe cash is needed to secure ammunition for M&A

• Intouch Holdings (INTUCH TB) plumbs new 12-month lows for its implied stub, and NAV discount as the former PM returns from exile. 
• Preceding my comments on Intouch are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Softbank Group (9984 JP) aims to raise around US$8-10bn via selling some of its stake in ARM Holdings’ US IPO.
• ARM develops and licences 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 compare its recent performance versus its performance prior to its privatisation and discuss the changes since then.

• ARM Holdings (1822695D US) is the world’s most widely licensed and deployed processor. Softbank Group (9984 JP) is seeking to raise about US$6-10 billion by listing ARM on Nasdaq.   
• Softbank Privatised ARM for US$32bn in 2016 and unsuccessfully tried to sell it to NVIDIA Corp (NVDA US) for US$40bn in 2022. In August, Softbank acquired Vision Fund’s ARM stake.
• The bull case rests on the growth in licensees, high customer switching costs, rising royalty rates, strong revenue visibility and a highly profitable and cash-generative business model.

• Nvidia, in characteristic fashion, murdered EPS estimates.
• Revenue was $2 billion ahead of the guide, and the guide was another $4 billion ahead of consensus for the next quarter.
• Going into the print, many people were concerned that positioning was bad, i.e., everyone was bullish and expectations were too high. Well, they did not disappoint.

• Western Digital Corporation delivered an all-around beat in the quarter, with total revenue of $2.7 billion.
• In the fourth quarter, cloud comprised 37% of all revenue at $1 billion, down 18% from the previous quarter and 53% from the previous year.
• Shipments of nearline bits were 59 exabytes, a 26% sequential decline driven by persistent difficulties among cloud clients.

• IQ reported 2Q23 revenue and non-GAAP net income 0.2%/28.5% vs cons.
• We cut our projections for 3Q23’s membership services revenue, but increased estimations for online ads services revenue, and raised margin forecasts for 2023.  
• We maintain our US$ 6.25 TP, implying 16.2X PE in 2023.

• Major memory names have fallen with the recent market concerns and only staged a small reboound due to Nvidia’s bullish results.
• NAND and DRAM price declines have stabilized. Demand for DRAM from servers is expected to exceed that from mobile devices, driven by AI usage.
• We see relative value in Micron vs. Nanya Technology and SK Hynix. SK Hynix is ahead of the game for AI, and Nanya offers focused DRAM exposure however.

• Monolithic Power Systems managed to exceed the revenue expectations as well as the earnings expectations of Wall Street.
• Storage and computing revenue increased in the quarter.
• Industrial revenue for the second quarter of 2023 also increased due to higher equipment sales for power sources and industrial meter applications.

• Market depth is a widely used measure of liquidity, commonly calculated across the order books of cryptocurrency pairs on centralized exchanges (CEXes).
• It provides the amount of bids and asks at varying distances from the mid-price, encompassing a range from -0.1% to 10%.
• This chart shows cumulative ETH-USDT bid and ask volumes at various levels on the ten largest CEXes.

• Nvidia will report its earnings today U.S.-time, we outline the key Taiwan AI supply chain names to watch around the earnings.
• TSMC has maintained its full-year revenue guidance despite media reports questioning whether a further downgrade was coming.
• Hon Hai produces over 50% of Nvidia’s AI hardware according to media reports.

• Baring aims to raise around US$900m by selling its remaining 26.6% stake in Coforge (COFORGE IN) .
• Baring has been paring down its stake since 2020 and hence, the selldown is somewhat well flagged.
• In this note, we run the deal through our ECM framework and talk about the deal dynamics.

• Alibaba (ADR) (BABA US)‘s New Retail strategy stumbled, prompting the company to revert to its e-commerce origins with a renewed emphasis on social commerce.
• Creating a social media platform could be relatively simple, yet turning it into a prosperous venture amid established social media giants could be challenging.
• Branching out from social media to e-commerce might be straightforward, but Alibaba Group Holding (9988 HK)‘s unprecedented reverse path could present unique challenges.

• Five plus years ago, Toshiba Corp (6502 JP) sold down a 26% stake in small cap Shibaura Mechatronics (6590 JP) to get to a consolidated 13%-ish stake. 
• This was discussed in Toshiba Selldown of Shibaura Mechatronics (6590) back then. Yesterday, we got news Toshiba would sell out its remaining stake. And there’s a buyback. Maybe.
• The stock has reacted badly on Day 1, despite a lack of dilution. Shareholder structure matters. 

• While Softbank is trying to complete the IPO of Arm in the next several weeks, many investors are likely to have concerns about valuations. 
• Arm Holdings generated sales of US$2.7 billion (down 0.9% YoY) and net profit of US$524 million (down 22.5% YoY) in FY 2023.
• In order for the valuation of Arm to reach US$60 billion, this would imply a significant premium multiple to the comps. 

• Kuaishou Technology (1024 HK) reported 2Q2023 results yesterday which beat consensus estimates. The company reported an OPM of 4.7% with net profits for the first time.
• The company’s domestic business continues to see improvement in operating profits while losses of the overseas business have reduced significantly over the last few quarters.
• Though livestreaming growth has decelerated, the company’s online marketing and e-commerce businesses continue to expand driving Kuaishou’s earnings.

• Softbank Group (9984 JP) aims to raise around US$8-10bn via selling some of its stake in ARM Holdings ’ US IPO.
• ARM develops and licences 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 not-so-positive aspects of the deal.

• Doosan Robotics is getting ready to complete its IPO in Korea in September. The expected IPO price range is 21,000 won to 26,000 won.
• The company estimates its sales to surge from 67 billion won in 2023 to 766.3 billion won in 2027, representing 83.9% CAGR from 2023 to 2027.
• One of the major reasons why local investors will have a positive view of Doosan Robotics is due to Samsung’s investment in Rainbow Robotics whose share price increased 232% YTD. 

Sunny Optical has released H1/23 numbers that were worse than expected in our view, with revenues and earnings below street estimates. Revenues declined 15.9% y-o-y to CNY 14.3 bn. Meanwhile, gross profit dropped 39.5% to CNY 2.1 bn, with a margin of 14.9%. Net profit plunged 68% to CNY 437 mn. A detailed cash-flow statement was not provided. Positively, the financial risk profile and liquidity remain healthy, supported by a large net cash position. Gross Debt/EBITDA rose to 3.9x, which is too high for a Baa1 credit in our view. We note that this has crossed Moody’s 2.0x negative rating trigger, which should cause downgrade pressure to build up.

• Baidu reported 2Q23 revenue/non-GAAP net income 2.3%/38.1% vs cons., Baidu core’s online marketing revenues and other revenues grew 7.1%/13.0% YoY, respectively. 
• We expect that Baidu’s ads growth will continue into 2H23, supported by recovery of key advertisers. 
• We slightly increase FY23 EPS estimates and maintain our TP of US$162, which implies 17.8X PE.

• Softbank Group (9984 JP) aims to raise around US$8-10bn via selling some of its stake in ARM Holdings ’ US IPO.
• ARM develops and licences 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 positive aspects of the deal.

• The total revenue growth rate accelerated significantly to 28% YoY in 2Q23.
• The high-margin businesses grew more rapidly than the low margin business.
• Gross Merchandise Value and Active user base still increased strongly.

• In this insight, we take a look at the names leading the race to become ADDs/DELs for the DAX, MDAX, and SDAX Indices in the September 2023 Rebalance.
• Software AG (SOW GR) was deleted from the MDAX index triggering a couple of interim changes in the last week of July 2023.
• Currently, I do not expect any changes for the DAX or MDAX indices in September 2023 but I expect one change for the SDAX index.

• The review period for the September rebalance of the KOSPI Size Indices started 1 June and will end 31 August. The changes will be implemented at the close 7 September.
• We see 7 migrations from MidCap to LargeCap, 6 migrations from LargeCap to MidCap, 7 new adds to MidCap, and 17 migrations from SmallCap to MidCap.
• Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.

• IQiyi failed to give its share price a lift with  stronger-than-expected 2Q results except for slight miss in paying subscribers .
• We believe that investors are expecting the end of its remarkable turnaround story and embracing a stable and moderate growth stage.
• While iQiyi trades at ~10x our FY23 earnings, the cheap valuation by itself doesn’t stand out among China internet peers as a group. We would wait for better entry points.

• Activation Group (9919 HK) unveiled its first-half financial results for 2023 on August 10th, 2023.
• In this article, we will provide an overview of Activation’s performance during this period and share thoughts on its future prospects.
• The Experiential Marketing segment recorded a full recovery, reaching RMB 280 million, surpassing the 2021 H1 level of RMB 276 million.

• Arista Networks managed to surpass the revenue and earnings expectations of Wall Street.
• The company generated $1.46 billion in revenue for the quarter and $1.58 in non-GAAP earnings per share.
• Arista is adjusting to these developments and increasing its investments in AI as its biggest cloud customers reassess their conventional cloud and AI networking plans.

• When this was launched, it traded more volume than expected on the first day, then again on the second day. Since then it has traded cheap vs initial estimates.
• A week after the launch, two separate Large Shareholder Filings came out. Those bear scrutiny.
• The back end trade is still an interesting one in my opinion.

• There should be 4 changes to the Yuanta/​P-Shares Taiwan Top 50 ETF and 1 deletion for the Yuanta/​P-Shares Taiwan Dividend Plus ETF in September.
• The potential adds are driven by the AI-frenzy that has swept the market for the last few months. Most potential deletions are shipping stocks that are way off their highs.
• Short interest on the potential deletions is high in terms of days of ADV and free float. The rise in shorts on the potential adds is being rapidly covered.

• The local market is increasingly convinced that Samsung Electronics’ quarterly dividends for the latter half of this year will experience a reduction.
• Samsung Electronics plans to apply the updated regulations from the 2024 1st quarter dividends, following the conclusion of the capital market law revision at the end of this year.
• It might be prudent to refrain from trading that bets on a reduction in the 1P discount in the first half of this year.

• Taobao and Tmall have implemented two major reforms: 1) The launch of the Wanxiangtai Platform Unlimited Edition; 2) Changing the rules for displaying merchant sales volume from monthly to annual.
• Although the new Wanxiangtai differs from PDD’s “Fangxintui” and “Quanzhantui” , the idea is to simplify and automate merchant promotion. We anticipate that this change will boost the take rate.
• We increased our core e-commerce take rate estimate for BABA in FY24/FY25 to 3.85%/4.0%, respectively, and raised our TP to US$ 127.

• Infineon’s big news is that they, too, will be building one of the largest Silicon Carbide fabs in the world. This makes Wolfspeed’s Siler City look puny in comparison.

• Infineon is now looking to be number three in the Silicon Carbide device game, targeting ~500 million in 2023.
• So given the impressive growth, Infineon is a bit late but plans to spend 5 billion dollars over five years for the factory in Kulim.

• Dynatrace Inc. delivered a strong result and managed an all-around beat in the quarter.
• With a new CRO and a strong vision for the future, Dynatrace is in a good position in the cloud-based software landscape.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Unity Software Inc. delivered a mixed set of results in its most recent result, with revenues above Wall Street expectations but below-par earnings.
• The company ended the quarter with a strong acceleration in revenue growth, impressive margin improvements, and positive cash flow generation.
• The company’s core subscription growth is robust, and its product portfolio continues to expand with new offerings, such as Unity 2022 LTS, Unity PolySpatial, and Unity Cloud.

• I remain bullish on the stock and reiterate a $37 PT. Confluent (CFLT US) delivered upside to total revenue, gross margin, and non-GAAP operating margin estimates.
• The company raised guidance for CY23 total revenue and profitability. There were plenty of positives, including cloud momentum and customer demand.
• The US-based data streaming pioneer appears well positioned to outperform my estimates, and I see a path to profitability (non-GAAP) in CY24 at the earliest.