TMT/Internet

• Alibaba (ADR) (BABA US)‘s 1QFY24 revenue and OP beat consensus by RMB 9.2bn and RMB 14.4bn respectively, possibly on the back of a successful 6.18 shopping festival.
• It looks like Alibaba Group Holding (9988 HK) has decided to abandon its New Retail Strategy and instead, put more effort into e-commerce, especially on popular platforms like Taobao and Tmall.
• Although this is a good-sign and could rally the stock short-term, we would still steer clear of Alibaba as we remain skeptical about the overall health of the Chinese economy.

• SmartRent’s 2Q was a bit of a head-scratcher. The significant growth in sales from 1Q didn’t carryover into 2Q, with top-line decelerating from ~74% YoY in Q1 to 26% YoY in 2Q.
• Trends of key KPIs suggest deterioration in the underlying business is continuing and in fact worsening, as we have seen from industry peers recently.
• The exact cause of such is unclear given management’s hesitance to provide clear commentary.

• SS&C delivered mixed results for the previous quarter, with revenues above the analyst consensus.
• The company’s strength was evident in its alternative business, particularly private markets, which saw a significant growth of over 20%, as well as in its Intralinks and retirement businesses.
• SS&C plans to focus on expense management, prioritize innovation, and continue product rollouts.

• XPER reported second quarter results underscoring the progress the Company has made in securing new design wins and revenue opportunities for its connected car and media platform segments
• Simultaneous with the second quarter results, XPER announced Sharp would use TiVo operating system for smart TVs starting in 2024
• New design wins for DTS AutoSense and DTS AutoStage are expected to translate into revenue towards the end of 2024

• Focus maintained on growth, experiencing temporary headwinds – Q1 FY3/2024 results showcased the company’s strong execution in driving growth, with sales increasing by 6.2% YoY.
• Although there was a major improvement in profitability in the Environmental Energy segment, the core Semiconductor and Electronics Components experienced a negative of persistent demand weakness in China.
• There was also reduced spot demand, negative FX translation impact YoY and on inventory valuation, and allowance for doubtful debt related to a key customer. 

• NTT reports a Q1 which looks like KDDI where the business looks like KDDI and a bit better than that where it doesn’t. Good. Not great. 
• But NTT announced a ¥200bn buyback. Again good. Not great. 
• And on Sunday, LDP politician Amari spoke on a Sunday news show about the possible govt selldown of NTT shares. 20yrs is a long time. So no overhang.

• Today, the personal holding company of Kyoden Co Ltd (6881 JP) founder Hashimoto-san announced a Tender Offer to take the company private. 
• Together with his company, he owns 64.75%. He only needs 1.93% to tender. The combination of Shokochukin, SMBC, and Yokohama Bank get him over the line. 
• This is small, illiquid, and will trade tight, but it’s a done deal. 

• AMD reported Q2’23 revenues of $5.4 billion, $100 million above the guided midpoint, flat sequentially but down 18% YoY, largely attributable to weakness in their client segment revenues.
• Q3’23 revenue of $5.7 billion at the midpoint,  a modest 5.5% increase sequentially and ~2.5% YoY.
• AMD has a lot riding on its MI300 launch but can it really take a bite from NVIDIA’s lunch?

• Softbank and the Vision Fund’s exposure to WeWork – estimated at USD1.8bn – look increasingly to be at risk of being written off
• Masa’s debts to SoftBank stand at USD5.1bn at 1QFY23 end and we believe that private company valuations are vulnerable, especially in the light of the recent Union Square Ventures write-downs
• Softbank shares trade at a 36% discount to the stated NAV; with Alibaba gone, the potential Arm IPO valuation is critical but SVF1 and 2 private company valuations remain questionable

• KPIT reported a strong Q1FY24 with 7.1% constant-currency (CC) revenue growth and EBIDTA growth of 13.3% QoQ. EBITDA margin expanded by 90bp QoQ to end at 20%.
• KPIT is upbeat about the demand environment. OEMs are continuing to spend heavily on new technologies. KPIT itself is investing significantly in R&D, especially Generative AI.
• Deal wins was healthy at $190mm vs typical run-rate of $150mm+. The pipeline is also healthy across practices.

• Kyoden Co Ltd (6881 JP) has recommended the founder’s tender offer of JPY600 per share, a 32.5% premium to the undisturbed price (9 August).
• The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 1.91% ownership ratio.
• The minimum acceptance condition (lower limit) requires an undemanding 5.4% minority acceptance rate. The tender offer is reasonable. 

• U.S. has announced new bans on PE and VC investment into key Chinese tech industries.
• Elan Microelectronics, ChipMOS reported good results, two longs to consider as we still see upside.
• Apple earnings short-term trades update — We’re closing out both trades, one at a loss and one roughly flat.

• FUJIFILM Holdings (4901 JP) reported 1QFY03/24 results today. Both revenue and OP increased 5.6% and 5.2% YoY to ¥660.8bn (vs consensus ¥649bn) and ¥52.2bn (vs consensus ¥52.1bn) respectively.
• Materials segment’s earnings were negatively impacted during the quarter due to a stagnant semiconductor market, however, we expect segment’s earnings to improve with the completion of Entegris acquisition.
• Despite the company successfully transitioning into a healthcare player, Fujifilm is still trading in line with imaging/photocopy players and there is significant upside to the company’s current share price.

• Charter Communications delivered a disappointing set of results as the company was unable to meet the revenue and earnings expectations of Wall Street.
• The company attracted 77,000 new Internet users in the second quarter, and its Spectrum One product and network development plans continue to pay off.
• The overall number of mobile lines was over 6.6 million at the end of the second quarter.

• The Tenth Annual JPX Nikkei 400 Index Review was announced on Monday 7 August. There are 38 Inclusions, 36 Deletions. They are mostly in line with Janaghan Jeyakumar, CFA‘s predictions.
• The BIG SELL is T&D Holdings (8795 JP), which surprised me. The top BUY is ROHM Co Ltd (6963 JP) which was not on the Quiddity Leaderboard.
• Otherwise, the ADDs and DELETEs are 1.8-2.0 days of ADV, there are several NEW CAPs and some RECAPS among LARGE CAPS

• On 8 August, Nikkei Asia reported that Arm plans to complete its IPO on NASDAQ in September in a deal expected to be worth more US$60 billion or more.
• Global tech giants including Apple, Samsung Electronics, NVIDIA, and Intel are expected to invest in Arm once the company is listed on the market.
• The IPO offering amount is expected to be between $8 billion and $10 billion.

• PayPal stock has fallen dramatically on speculations regarding the near-term future.
• The market is now pricing-in significant deterioration of the company’s top or bottom line.
• The management is making the right moves to secure long-term competitive advantages, while also rewarding shareholders, according to the report.

CLIQ Digital delivered robust growth in H123, with 37% year-on-year growth in both revenue and EBITDA at a maintained margin of 15.8%. Growth continues to be driven by growing marketing spend and investment into evolving the bundled content offering. Given a more competitive bidding market, management is focusing on acquiring customers with a higher lifetime value to create a more profitable subscriber base. Management has reiterated both its FY23 and mid-term FY25 guidance and our headline forecasts remain unchanged. Despite CLIQ’s share price performance faring better than the peer average valuation, it remains at a significant discount to peers on both EV/sales and EV/EBITDA multiples. In our view there continues to be significant upside to the current share price on our current estimates.

• There are 38 adds/36 deletes for the JPX Nikkei 400 Index to bring the number of index constituents back to 400. There are stocks with multiple days ADV to trade.
• Based on the adds, deletes and capping changes, we estimate one way turnover of 4.35% and a two-way trade of JPY 461bn (US$3.24bn).
• There are a few stocks that will have same way flow from other index trackers within a few weeks of the JPX Nikkei 400 Index rebalance.

• Over the last year, the discount of Samsung Electronics Pref Shares (005935 KS) to Samsung Electronics (005930 KS) has increased from 5% to 17%.
• The preferred shares have adequate liquidity, a large issue market cap, and now trade at a much higher dividend yield. A special dividend will further increase the dividend yield differential.
• Breaking from history, the preferred shares discount has continued to increase as the stock has moved higher. With the preferred shares trading near its widest discount, that could change.

• 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.
• Plus Alpha Consulting (4071 JP) will be included in TOPIX at the end of August 2023 and so far the stock has performed negatively as expected (see link).
• Our long-term TOPIX pre-event name CELSYS (3663 JP) has seen its share price decline sharply in the last few weeks which raises some important questions.

• KT Corp (030200 KS)’s shares were up 4.1% today to 32,000 won driven by better than expected results in 2Q 2023 and the nomination of a new CEO. 
• KT has nominated Kim Young-Seop, the former CEO of LG CNS as the new CEO of the company.
• KT Corp has attractive valuations. It is trading at only 2.6x EV/EBITDA, 6.7x P/E, and 0.5x P/B in 2023. These valuation multiples are much cheaper than SK Telecom.

• ACMR reported C2Q23 top-line, non-GAAP EBIT, and non-GAAP net profit 22%, 130%, and 209% vs. our est., and 25%, 228%, and 248%, respectively. 
• As FY guidance was unchanged, we suggest that the revenue beat was due to tool delivery faster than expected (i.e., order pull-in).
• We maintain our FY23 revenue estimate, but raise our net margin estimate to reflect the better-than-expected impact of USD appreciation on profitability. 

• First Solar delivered an all-around beat in the most recent quarterly results.
• Driven by supportive industrial and trade policies, compelling market fundamentals, and robust customer demand, First Solar continued investing and expanding in U.S. domestic manufacturing.
• First Solar purchases Evolar AB in the search for next-generation solar cells.

• VeriSign managed to exceed analyst expectations in terms of revenue as well as earnings.
• The quarter included solid financial results and renewing the.net registry agreement with ICANN.
• The financial results in the quarter showed continued strength of its business during the uncertain macroeconomic period.

• We believe that Kuaishou’s outsized bottom-line beat for 1H23 was driven by stronger advertising and e-commerce business and cost reduction than the street expected.
• However, the market’s muted response suggests that investors are looking beyond 1H23 or even FY23 to price in a mature growth outlook.
• Kuaishou is trading at ~40x our FY23 estimate against 24% earnings CAGR from 2023 to 2025 which represents a hefty valuation premium over other China tech giants.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• In the IPO space, Concord Biotech Ltd (658823Z IN) and  SBFC Finance Limited (1547353D IN) opened their respective IPO bookbuilds this week.
• On the Placements front, India began picking up steam post-earnings seasons.

• ZHD reported F1Q/C2Q23 top-line, non-GAAP operating profit and non-GAAP net profit in-line, in-line and (32%) vs. consensus, respectively. Earnings miss was driven by wider tax expense.  
• ZHD’s B2C e-commerce platform GMV continued to decline, which we suspect is due to the continued impact of STAT, especially Shein.
• We maintain SELL and raise TP to JPY 340 due to improved ads-spending, but we expect the transient ad spend increase to be offset by loss of ecommerce customers. 

• Net of HKT Ltd (6823 HK), PCCW Ltd (8 HK) recorded negative EBITDA of HK$378mn in the 1H23.
• This is the largest six-month negative EBITDA figure since the EBITDA loss of HK$427mn in 2H22, and the third largest in the past decade. 
• PCCWs current discount to NAV is at an unsustainable 5%.

• In a surprising move, SK Inc confirmed the interim dividend amount (₩1,500) on July 26, and the ex-dividend date is set for August 10.
• As a result, this enables risk-free dividend arb trading in Korea as SK Inc carries single-stock futures, whose liquidity level is around 70% of the spot since July 26.
• The backwardation level has not yet pushed this arbitrage to a profitable level. Nevertheless, it’s still possible to observe the basis spread moving to a meaningful extent before the ex-date.

• Fadu (440110 KS) raised US$151m in its Korean IPO, after the deal was priced at KRW31,000/share, the top end of its IPO price range.
• Fadu is a South Korean fabless semiconductor maker mainly engaged in flash storage technology innovation. Its core products are Enterprise Solid State Drive (SSD) and Enterprise SSDs. 
• In this note, we will talk about the demand for the deal and other trading dynamics.

• Naver Corp (035420 KS) is planning to complete an IPO of Naver Webtoon on NASDAQ in 2024.
• Naver Webtoon generated sales of 548.9 billion won (up 54.5% YoY) and net profit of 68.6 billion won (up 17.1% YoY) in 2022.
• Naver Corp’s Contents unit which includes the Naver Webtoon business posted solid revenue growth of 40.1% YoY to reach 420.4 billion won in 2Q 2023.

• 3P, subscription, and AWS grew by mid to high teen while ad segment increased by 20%+
• The mix-shift from product to services in Amazon continues as services mix increased from ~40% in 2018 to ~60% in 2023.
• Let’s start more segment level discussion with AWS.

• Ideanomics had a strong quarter.
• Solectrac and Energica, in particular, demonstrated strong growth and demand in the agriculture and motorcycle markets.
• Ideanomics remains committed to its capital investment for future profitability, with an optimistic outlook driven by the increasing demand for the company’s products and services.

• Salmon, a consumer fintech company based in the Philippines, has secured a US$20 million debt facility from US emerging-markets specialist investment firm Argentem Creek Partners.
• This will allow Salmon to scale its lending operations across the country further.
• The fintech firm will expand its loan book, leveraging its existing point-of-sale and cash loan lending, and launch new products in the second half of 2023.

• The recent rally in growth stocks has supported the share price, but this trend may not last for long.
• In spite of the company’s strong pricing power, margins are under pressure and risks related to capital allocation remain.
• The company’s stock has performed well but this is not reflective of its actual business performance.

• SHEN Continued to add subscribers to the Glo Fiber service. The rate of subscriber growth has steadily increased with the expansion in the number of homes passed
• We are upgrading our rating to Neutral in reflection of the progress SHEN has made 
• SHEN is planning to reach approximately 500 thousand homes passed by 2026 from approximately 183 thousand currently

• Gimo, an earned-wage access player in Vietnam, has raised US$17.1 million in its series A round led by TNB Aura.
• Participating investors also include Y Combinator, Integra Partners, ThinkZone Ventures, AlteriQ Global, among others. 
• This series A round was closed just five months after the company secured US$5.1 million in the first tranche.

• Bringing yields from real-world assets on-chain is one of the major themes for DeFi, given the high interest rate environment.
• The natural extension to that would be bringing yields from real-world risks on-chain, a space that has not been explored extensively yet. 
• DeFi options protocols could look to cover these real-world risks as they seek further growth. 

• Intel Corporation delivered a positive result and managed an all-around beat last quarter, demonstrating ongoing financial improvement and validating its market approach.
• As per the management, Intel’s ability to successfully implement all of its process and product roadmaps is restoring consumer trust in the company.
• We give Intel Corporation a ‘Hold’ rating with a revised target price.

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.

• Singapore-headquartered climate-tech startup Zuno Carbon has secured US$2.5 million in seed funding led by Wavemaker Partners. SEEDS Capital and Blue InCube Ventures also participated.
• This brings the total funds raised by Zuno Carbon in the past 12 months to over US$3 million and follows a pre-seed round in June last year.
• The money will be used to ramp up Zuno Carbon’s sales and marketing efforts, launch new features to simplify compliance and catalyse decarbonisation with real, tangible actions.

• Strategic shifts continue to reap rewards–IDHoldings’Q1 FY3/2024 performance demonstrated a continuation of the robust results experienced in FY3/2023, with DX remaining the core demand driver.
• Business segment sales in System Management, IT Infrastructure, and Cybersecurity, Consulting, and Training grew strongly YoY, demonstrating that the company’s efforts to remodel its business have been successful to better support and serve its customers.
• We have kept our earnings estimates unchanged for FY3/2024 and beyond, with the expectation that high-margin DX demand will continue, driving continued profitability improvements in the business.

• Mastercard managed to exceed analyst expectations in terms of revenue and earnings.
• The broader labor market is still robust, with pay growth included, and credit and savings continue to support consumers.
• They introduced Mastercard Receivables Manager with Billtrust on the supplier side and MasterCard Multi-Token Network in the blockchain.

• T-Mobile delivered a mixed set of results for the previous quarter, with revenues below the analyst consensus.
• Additionally, free cash flow increased and the free cash flow to service revenue margin was the greatest among their competitors year to date.
• The company also enjoyed a significant quarter for T-Mobile for Business, with its lowest phone churn and best-ever phone net additions.

• Itochu Corp (8001 JP) today announced it had agreed with 61%-owned Itochu Techno Solutions (4739 JP) sub to take over CTC and squeeze out minorities. 
• The stock released earnings mid-day, somehow, but not on TDNet until post-close. The stock jumped in the last two hours. The Tender Offer is at a 10% premium to close.
• Growth will be up, and there are lots of financial assets and net receivables so this is 8+x March 2025. Itochu is not overpaying. But there will be no counter.

• Itochu Techno Solutions (4739 JP) has recommended Itochu Corp (8001 JP)’s tender offer of JPY4,325 per share, an 18.7% premium to the undisturbed price (1 August).
• The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 5.43% ownership ratio.
• The minimum acceptance condition requires a 14% minority acceptance rate. This is doable as the tender price is attractive and equals the 20-year share price high.

• E Guardian Inc (6050 JP) has announced a partial tender offer and third-party allotment with Change Inc (3962 JP). CHANGE will subscribe for 1.5 million shares at JPY2,099 per share.
• The tender offer is for a minimum of 3.7 million and a maximum of 4.3 million shares at JPY3,000 per share, a 42.9% premium to the undisturbed price.
• The tender offer is reasonable. The minimum acceptance condition requires a 37% minority acceptance rate. A 100% minority participation rate implies a minimum proration is 42.39%. 

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
• Stocks mentioned in this regular insight include Flat Glass (6865 HK), Arts Optical Intl Hldgs (1120 HK), and Sky Light Holdings Ltd (3882 HK).

• We expect Hua Hong to report C1Q23 top-line and non-IFRS net income in-line and (24%) vs. cons., respectively, missing mainly due to one-time costs. 
• Hua Hong’s post-A share IPO valuation is cheap at 0.7x P/B, but we expect that weakening industrials demand and a slow recovery to hamper shipments.
• We maintain BUY but cut Hua Hong’s TP to HK$ 34 reflecting lowered wafer shipments estimates for FY24/25. Our TP implies 15x FY24 PE.

• Halodoc, the Indonesia-based healthtech firm, raked in US$100 million in series D funding in a round led by returning investor Astra Digital International, according to a statement.
• This boosts Astra’s total investments in the company to US$135 million. In 2021, the local conglomerate also led the US$80 million series C round of Halodoc.
• With the new capital, Halodoc has raised at least US$258 million, according to Tech in Asia data.

• Today, Change Inc (3962 JP) (30%-owned by SBI Holdings (8473 JP)) announced a Tender Offer to buy 32-36.9% of E-Guardian, followed by a third-party placement to get them to 45-49%.
• Small cap E-Guardian does internet services support, ad processing, cyber security (their fastest growing segment) and top line has been growing.
• The partial offer is big enough to matter, and up 50%. It is worth a look for people who like small cap special sits.

• Singapore-based startup Bunker, which provides a modern financial analytics platform for SMEs, has secured over US$5 million over two funding rounds.
• The investors include January Capital, Alpha JWC, GFC, Northstar Group, Money Forward, Alpine Ventures, and Patamar Capital.
• Angel investors, namely Chris Lin, Rosemary DeAaragon, Tiger Fang, Gaurav Gupta, Christian Sutardi, Warren Tseng, Jonathan Wong, Nakul Malhotra, and Shaun Hon, also participated.

• Q2’23 revenues of $12.9 billion, down 15% YoY but up ~10% QoQ and handily beating the guided midpoint of $12 billion.
• Q3 outlook for $13.4 billion at the midpoint, up 3.8% sequentially
• Mr Gelsinger envisages a centrino-like era of AI-enabled PCs, starting with Meteor Lake in H2’23. Is this realistic?

• Teradyne delivered an all-around beat in the previous quarter.
• The company’s performance met expectations, but segment-wise, the test business showed more strength, while robotics faced challenges with softer demand.
• Teradyne also recently introduced the Teradyne Archimedes analytics solution, an open architecture that brings real-time analytics to semiconductor testing.

• Broadband provider Superloop Ltd (SLC AU)  has made an indicative Offer, by way of a Scheme, for cloud communication software outfit Symbio Holdings (SYM AU).
• Under the proposal, Symbio shareholders would receive A$1.425 (cash) and 2.14 new Superloop shares for each Symbio share held, for an implied price of A$2.85/share, a 20% premium to undisturbed.
• A four-week period of reciprocal exclusivity has been agreed to further progress the proposal.

• Symbio Holdings (SYM AU) has disclosed a non-binding indicative proposal from Superloop Ltd (SLC AU) at A$1.425 cash per share and 2.14 SLC shares per SYM share. 
• The implied offer price of A$2.85 per share is a 19.7% premium to the undisturbed price of A$2.38 per share. A 4-week reciprocal exclusivity period starts on 1 August.
• The offer is not close to being a knockout bid. Superloop states that it will progress the transaction on “a disciplined basis“, suggesting some risk towards a binding proposal.

• ATNI is in the last stretch of its capital expenditure spending plan and subscriber count is beginning to support the larger and faster network
• ATNI has grown the number of high-speed broadband and mobile customers, which is fueling the efficiency in the operating model.
• The transition away from wholesale wireless roaming to network management should further improve the operating structure of the business.

• Lam Research delivered a positive result and managed an all-around beat in the last quarter.
• Additionally, Lam Research experienced a decline in memory spending, particularly in the NAND segment, impacting its revenue concentration.
• Lam Research also announced its plans to advance India’s semiconductor workforce development goals.

• Fiserv delivered a positive result and managed an all-around beat in the last quarter.
• With the continued success of their market-leading cloud-based operating system, Clover, and the unified commerce offering, Carat, Fiserv expects future growth acceleration.
• Other growth areas include digital payments and digital banking, expansion in Latin America, and opportunities presented by the cloud-native core banking system, Finxact.

• Last week the best show in semiconductors was the Maxlinear and SIMO merger news. I will catalog the entire saga and outline my thoughts on where things go.
• Before we talk about SIMO, let’s talk about Maxlinear’s acquisitions. MaxLinear acquired an asset in April 2020 that was almost the perfect fit.
• As Intel shed assets, they sold their home gateway platform, which makes the semiconductors that go in-home modems and routers.

• MicroStrategy is currently overvalued and has a potential downside of up to 75%, making it an unwise investment for Bitcoin exposure.
• Analyst at TD Cohen makes a bullish call on MicroStrategy as a Bitcoin play, but author disagrees.
• MicroStrategy (NASDAQ:MSTR) is set to release its second quarter earnings.

• PingSafe, a Singapore-based cybersecurity firm, has raised US$3.3 million in a seed funding round led by Surge, the scale-up program of Peak XV Partners (formerly Sequoia Capital India & SEA). The round also saw participation from Tanglin Ventures and several angel investors.
• The company will use the fresh funds to expand its business across Southeast Asia and North America.
• Founded in 2022 by CEO Anand Prakash and CTO Nishant Mittal, PingSafe provides a cloud security platform that protects companies’ data and apps from cyber attacks.

• AT&T delivered a mixed set of results for the previous quarter, with revenues well below analyst expectations but managed an earnings beat.
• The last quarter for AT&T showcased the company’s strong execution of its strategic vision, resulting in continued growth and progress toward its objectives.
• Their fiber business has also succeeded, substantially increasing AT&T Fiber net adds, driving higher penetration rates and broadband revenues.

• The 2023 Version of JAPAN PASSIVE: Who Owns What? where we break down the major (and minor) passive tracking indices and which category of investor owns how much of each. 
• Even if you do not “play” index changes, understanding impact is important. Advantest is up 100% in 3mos. Existing passive ownership and new passive buying were crucial to that performance.
• Understanding the nature of the ownership and flows is crucial to understanding how to trade certain stocks in Japan. 

• The review period for the Nikkei 225 (NKY) September rebalance ended yesterday. There should be three index changes, potential stepwise inclusion, no Fast Retailing capping and a big funding trade.
• There appears to be decent positioning on the potential adds, while it is the close adds that are spiking along with a big increase in traded volumes.
• If the three changes are on expected lines, estimated one-way turnover at the rebalance is 2.01% resulting in a one-way trade of JPY 461bn (US$3.24bn). 

• Apple will report its earnings on August 3rd, 14:00 PDT. We highlight two potential trades into the Apple earnings event.
• Quanta Computer has massively outperformed Apple due to investors latching on to its AI-server growth story. One can consider to Long Apple / Short Quanta into the Apple earnings event.
• Hon Hai, Flexium, and Zhen Ding have all lagged Apple’s shares yet generate significant revenue from Apple. One can Long a basket of the three into Apple’s earnings.

• Wave of earnings this week — AMD, Qualcomm, Apple internationally… and Delta, Advantech, Innolux, Winbond, Realtek, plus others in Taiwan.
• We visited Micron’s A3 fab in Taiwan; SK Hynix gives strongest comments yet on Memory turn-around; Long Nanya Tech on DRAM turn-around.
• Intel results readthrough: PC cycle improving and could be accelerated by AI-demand… We continue to see Elan Micro as a laggard play on rallying PC names.

• We expect SMIC to report C1Q23 top-line and non-IFRS net income 2% and 16% vs. consensus, respectively.
• We suggest SMIC’s ability to supply sanctioned firms with 14/7nm nodes provides it with significant pricing power. We expect the decline in SMIC’s wafer ASP to slow.
• We expect overall 2H demand to improve due to (1) normalizing fabless inventory levels, and (2) stabilized smartphone demand. We maintain BUY rating and raise our TP to HK$ 26.

• High earnings visibility – Q1 FY3/2024 results indicate a robust start to the year with record-high quarterly sales, orders, and backlog.
• We believe the company exhibits robust earnings visibility, which can be attributed to its adeptness in delivering high-value-added services within a highly competitive market, with its high-quality workforce and sufficient capacity.

• Aiming for long-term sustainable growth –whilst strong results are appealing, we are encouraged by the following which we believe will allow the business the sustain long-term growth

MotorK reported double-digit H123 revenue growth, with committed annual recurring revenue (ARR) and a pipeline of contracts providing visibility for H223. The migration of acquired Dapda customers to the SparK platform drove a substantial rise in average contract value (ACV) and creates opportunities if this success can be replicated with other acquisitions. Short-term cost impacts drove higher year-on-year losses in the period, which has affected our FY23 profit forecasts, but not our FY24 assumptions.

• About a year ago, right as crypto trade volumes started to slump in the aftermath of the Celsius and Terra collapses, Binance vastly expanded its zero-fee trading promotions to 13 BTC pairs.
• This practice, though not new, had never been implemented on such a large scale.
• However, just nine months later the exchange decided to reverse this strategy and adopt a more selective approach.