TMT/Internet

• On June 24, Crowdstrike Holdings (CRWD US) will officially join the S&P 500, which follows strong financial results and guidance. Investors anticipated this inclusion, driven by improved profitability and operational efficiency.
• The volume traded has so far been on average 2x the 3-month daily average prior to the news. The enduring effect will be on liquidity (hedging basket for index exposure).
• CrowdStrike’s inclusion in the S&P 500 index increases the representation of pure cybersecurity stocks. Median IBES consensus PT is $400 (7.5% upside).

• Tianju Dihe Technology, a provider of integrated API-enabled data exchange services in China, set terms for an IPO and plans to raise ~HK$400M in June.
• The initial public offering is expected to be priced at HK$83.33 per H share, valuing the technology company at ~HK$4.2B or $535M based on 50.1M outstanding shares.  
• Cornerstone investors have agreed to acquire ~3.8M H shares, representing 80% of the offer shares or ~8% of the total outstanding shares.

• BCG is the leading online classified group in the Baltics with 14 portals across three countries
• Management team focused on improving monetization for high revenue growth
• Expected significant value per share growth with exposure to high-growth Baltic markets and plans to increase take-rates, presenting an intriguing opportunity for investors

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• Not much has changed since our latest Int’l Compass from May 31, 2024 titled “Buy the Pullback.” 
• We were buyers of the pullback in global equities (MSCI ACWI, ACWI ex-US, EAFE, EM, Europe, Japan, Taiwan, etc.) with important supports holding, combined with ongoing healthy market dynamics.
• Supports are holding, and our bullish outlook (since early-November 2023) remains intact. Continue to buy dips.

• Shin Etsu Chemical (4063 JP), owner of a 44% stake in Mimasu Semiconductor Industry (8155 JP), will launch the TOB to buy out Mimasu minority holders, as pre-announced 2mos ago.
• Not surprising. They bought in 19yrs ago, raised to 40+% 18yrs ago, then waited. Finally, we have a deal. It’s too cheap but in 18yrs, I recall zero activism here.
• Shin-Etsu starts with ~45%, and crossholders and the chairman get it to 53%. Then they need a bit to get them to 67% but it should be straightforward.

• SenseTime Group (20 HK)  aims to raise up to US$263m via selling around 4.5% stake.
• Sensetime hasn’t had the best of times since listing, however, the shares have rebounded recently on generative AI buzz around the stock.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Mimasu Semiconductor Industry (8155 JP) notes that the pre-condition for Shin Etsu Chemical (4063 JP)’s JPY3,700 tender offer has been satisfied. The tender runs from 21 June to 5 August.
• The share price has traded at or above the offer on 15 out of 38 trading days, partly due to expectations of a counteroffer. 
• While the offer is below the midpoint of the IFA DCF valuation range, it represents an all-time high. The lack of activists or competing offers suggests a done deal.

• On the 18th June, personal computer (PC) parts and accessories play PC Partner (1263 HK) announced a profit alert for 1H24. 
• That’s positive. What is also interesting is that the board is considering an SGX listing, by way of introduction, and applying for the withdrawal of the HKEx listing.
• Precedents are thin on the ground. And for good reason. The process is not straightforward.

• We hosted a conference call with Elan Microelectronics management; We view the company as a Structural Long position for the AI PC upgrade cycle.
• From the company’s perspective, significant impact from AI PC demand will come but not until 4Q24E or 1H25E. However, supply chain excess inventory improved and prepping for upcycle.
• An estimated 90% of AI PC models launched at CES 2024 use Elan’s products in their design; Elan well positioned for the upcycle and entrenching its position. Maintain Structural Long.

• Approaching a transformational phase – MIXI Inc. is a digital content company generating earnings from its ‘MONSTER STRIKE’ mobile gaming franchise.
• Operating in a mature domestic gaming market, the company has successfully diversified into lifestyle and sports, but to date has experienced limited earnings contribution.
• We believe this is about to change, driven by the new monetization strategy for the ‘FamilyAlbum’ video and photo- sharing service app in FY3/25. 

• TYC Brother Industrial is set to dominate the NEV market with a US plant scheduled to be operational by the first quarter of 2025.
• Despite sanctions, a Russian company has introduced the MP21 SBC to rival the Raspberry Pi 5, showcasing the competitiveness of the technology market.
• Cerebras and Dell have joined forces to challenge Nvidia in the AI market, highlighting the growth of AI accelerator technology for servers. Taiwan’s carbon market is advancing with new initiatives and regulations, while the UK collaborates with Taiwan to lead in semiconductors at Semi-Impact forum. India is ramping up cobalt supply efforts to meet growing demand.

• Perfect Corp. provides an AI and machine learning based B2B SaaS platform for virtual try on and marketing of beauty and fashion products as well as six mobile apps sold B2C for makeup suggestions, try-on, tutorials, photo and video editing and most recently, Gen AI creation and editing.
• It is expanding its offering to new verticals and has strong IP as well as the largest database for AI training in the industry.
• It has a dominant market share and serves almost all the major beauty brands worldwide.

• Apple announced Apple intelligence, integrating AI in a feature-centric way for on-device use
• The approach focused on useful features rather than spotlighting AI technology
• Apple’s implementation of AI on iPhone 15 Pro and newer devices showcases their focus on personal intelligence and user-centric design

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• Fujitsu launches GenAI platform for advanced AI capabilities, enhancing customization options for users.
• CuspAI receives US$30M funding, partners with Geoffrey Hinton to address climate change using advanced materials.
• Global IC fab capacity expected to grow by 6% in 2024 and 7% in 2025, with Taiwan playing a key role in AI innovation.

• Money Forward’s share price has declined by around 16% since reporting Q1 results.
• The company will report Q2 results in early July. We expect continued solid momentum
• We believe the stock price has around 30% upside potential to our target price of ¥6,600

• Black Sesame Technologies (BLACKSES HK) is looking to raise around US$300m in its upcoming Hong Kong IPO.
• Black Sesame International Holdings (BSIH) is an automotive-grade computing SoC and SoC-based intelligent vehicle solution provider.
• In our previous note we looked at the company’s past performance. In this note, we discuss Black Sesame’s PHIP updates.

• Power Integrations (POWI) is facing persistently low earnings quality over the past five quarters due to a channel inventory adjustment, which they claim is almost complete
• Revenues have dropped by 37% since 2021, casting doubt on whether the adjustment fully explains the decline
• Financial performance in 2024 could lead to a shift in the investment narrative towards normalized revenues below recent peaks and increased competition from Chinese semiconductor vendors, potentially affecting earnings and forward multiples

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• 15 weeks ago, a specialised media outlet suggested Teijin Ltd (3401 JP) was in process to sell its stake in Infocom Corp (4348 JP). 
• I caught up later, after the stock had run up significantly, but writing bullishly here and here. Since then, the stock is up another 33-35%.
• Today we finally got the announced deal. Blackstone will buy the stock at a valuation of ¥280bn, paying ¥6,060/share for the minority stake, and buying back Teijin’s stake at ¥4,340/share.

• Following months of press speculation, Infocom Corp (4348 JP) announced a Blackstone (BX US) tender offer at JPY6,060 per share, a 177.3% premium to the undisturbed price. 
• After the share consolidation, Infocom will repurchase Teijin Ltd (3401 JP)’s stake at a share repurchase price of JPY4,231. The process is expected to be completed in early October.
• The offer is a knockout bid helped by auction. This is a done deal with payment commencing from 7 August. At the last close, the gross spread was 0.5%.

• Taiwan’s wafer foundry industry set to expand in Q2 2024 with potential government and financial support.
• London Tech Week 2024 showcases AI, semiconductors, deep tech, startups, and global tech partnerships.
• Quanta sees profits double despite workforce reduction, while Intel invests in Luxshare in China to boost market presence.

• Webtoon announced that it is targeting a valuation of up to US$2.7 billion in the upcoming IPO. The IPO price range is from US$18 to US$21 per share. 
• The company is aiming to raise as much as US$315 million in this IPO. Blackrock Asset Management has indicated interest of purchasing up to US$50 million in this IPO.
• Our base case valuation of Webtoon is market cap of US$3.6 billion or target price of US$27.9 per share (33% higher than the high end of the IPO price range). 

• Computex showed how Micron has successfully leap-frogged SK Hynix and Samsung in HBM DRAM for AI Servers.
• Now, older ‘boring’ DRAM prices could surge as HBM DRAM production is voraciously consuming memory fab capacity.
• Why Nanya Tech shares could surge higher — A DRAM memory trade for those who don’t want to chase steep 52-week highs in Micron and SK Hynix.

• HBM revenue on track to jump from a few hundred million in 2024 to “multiple” billions in 2025
• Micron expects to become FCF positive in the second half of their fiscal 2024 and to have a record revenue year in their fiscal 2025. 
• Micron’s is doing custom work on their HBM solutions. Customers are signing LTAs with defined pricing. This could easily spread to Micron’s non-HBM products also. 

• Globalfoundries Inc. is an American semiconductor foundry spun out of Advanced Micro Devices in 2009.
• The company operates four fabs in the US, Germany, and Singapore, making it the only scaled pure-play outside of China and Taiwan.
• In 2018, Globalfoundries shifted its focus to producing lagging-edge, feature-rich semiconductors after halting investment in leading-edge chip development.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Coherent Corp. reported a solid third-quarter performance for Fiscal Year 2024, signaling strong underlying business dynamics despite some operational hitches.
• The company emphasized a noteworthy sequential revenue increase of almost 7% and an almost 50% rise in non-GAAP EPS which marked significant growth.
• Operating cash flow stood robust at $117 million, with a substantial portion directed towards capital investments and debt repayment.

• Based on the first quarter 2024 earnings of Qualys, the company has evidenced a progressive trajectory with significant developments in its strategic sectors, specifically cybersecurity asset management.
• The introduction of enhanced enterprise solutions such as VMDR with TruRisk and TotalCloud CNAPP reflects Qualys’ adaptation to evolving market needs and emphasizes the ever growing complexity of cybersecurity threats.
• These initiatives have notably increased product adoption across diverse verticals including healthcare, technology, retail, and financial services, suggesting robust demand and profitability potential.

• In Q1 2024, ON Semiconductor Corporation reported revenue of $1.86 billion, with a non-GAAP gross margin of 45.9% and non-GAAP earnings per share of $1.08, exceeding the midpoint of the guidance.
• These figures demonstrate the company’s adeptness at navigating market dynamics, supported by a 30% increase in new design wins and growth in silicon and silicon carbide market share due to its innovative power and sensing technologies.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• TSMC’s 3nm Shortage: Capacity Filled Until 2026 Amid Surging Demand; Strategic Price Hikes Coming Soon
• Top Gainers/Losers: Taiwan Tech Rallies Alongside TSMC, Apple, Nvidia, ARM Strength
• Samsung Unveils Pathway to Catch Up With TSMC in the AI Foundry Race

• Miroku Jyoho Service (TSE:9928) , which offers on-premises, hybrid (IaaS) and cloud accounting software to Japanese enterprises of various sizes.
• Our purchase is centred around the business achieving further transition to the cloud, allowing for substantial margin improvement through the accumulation of high gross margin SaaS revenue.
• This transition has impacted firm profitability in the short term due to the shift in revenue recognition as quoted below by the company

• H3C and Foxconn partner in Malaysia for data center investment; Tsinghua Unigroup continues acquisitions in the tech industry.
• Chinese automakers urged to invest in cleaner technologies, form strategic partnerships, and comply with EU regulations under new EV tariffs.
• Microsoft & Qualcomm exceed pre-orders with AI-powered Copilot+ PC; Hyundai plans to list Indian arm; SEMICON India to showcase advancements in semiconductor industry.

• Avant was founded in 1997 by the current CEO Tetsuji Morikawa and is a Japanese holding company of financial and non-financial software which have the collective goal of assisting its clientele to increase corporate value.
• This includes ‘Diva’ as Japan’s foremost (43% market share) consolidated accounting software and board meetings platform in addition to ‘Avant’, a management system for corporate value enhancement through consolidation of information (Avant Cruise) , charting (Avant Chart) , and corporate value enhancement (Avant Compass).
• Lastly, there is ‘Zeal’ which includes several non-financial platforms that help organise and integrate (with Avant Cruise) from external sources. And interestingly, Avant also owns and operates Internet Disclosure Co, which runs Kaijinet, a site I have frequently visited over the years.

• This is the first blog post on the Hurdle Rate website, a series of blog posts which I intend to cover specific topics rather than unit trust investments.
• From time to time I may consider company deep dives, but predominately I want to make these posts more specific in nature around the global landscape in professional and financial services.
• Today’s post is going to talk about the recent bombshell that is Xero’s price hikes, a controversial topic here in Australia for the accounting industry, and a perfect start to the blogroll given my background and focus.

• PCI Holdings, Inc. (hereafter, the Company) is an IT provider of IT-related services and hardware, mainly focusing on embedded system technology such as embedded software, embedded computers, and the like.
• Though it is a relatively young company, born in 2005, it has grown up to be large enough to have net sales of ¥28,500 mn for FY2023/9 with approximately 1,600 employees along with organic growth and acquisition of many companies.
• Going forward, it will change the corporate structure and make it more profitable by investing its cashflow from its core businesses, the Engineering Business and the Product/Device Business, into the ICT Solutions Business, which has considerable potential growth fields such as solution development using AI, IoT platform and the like.

• Commvault recently wrapped up an impressive Fiscal Year 2024, demonstrating robust financial health and strategic progress.
• Their fourth-quarter earnings highlighted a 10% increase in total revenue, reaching $223 million.
• This growth was significantly propelled by a 27% rise in subscription revenue, which now constitutes over half of the total revenue stream.

• Comscore underwent recapitalization in 2021, issuing $204M in convertible preferred stock
• Decline in equity capitalization led to removal from major market indexes, but recent improvements in fundamentals have created significant equity value
• Preferred holders may convert stock into common stock at a discount, and have the option to request a one-time special dividend valued at $45M, declining annually if specific borrowing conditions are met.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• JFrog’s First Quarter 2024 financial report showcases a strong financial position with notable overall growth and a positive outlook, marked by significant developments and strategic initiatives across the company.
• Total revenue reached $100.3 million, reflecting a 26% year-over-year increase, driven by robust cloud revenue and growing enterprise subscriptions.
• Cloud revenue notably increased to $36.9 million, marking a 47% growth from the previous year.

• Plexus Corp recently reported fiscal second quarter 2024 results which showcased the company’s capacity to maintain a robust growth trajectory and strong operational performance amidst a mixed business environment.
• Plexus announced fiscal second quarter revenue of $967 million, which sat at the top end of the company’s guidance, with a non-GAAP EPS of $0.94.
• The non-GAAP operating margin was reported at 4.2%.

• The yearly growth target could approach 25% YoY in 2024.
• TSMC’s CoWoS demand continues to rise, with capacity expected to increase by approximately another 5% in 2024.
• TSMC’s stock price has risen by 55% in Taiwan and by 66.3% in US markets this year. We believe it has the potential to continue increasing further.

• ARM Holdings (ARM US) will replace Sirius Xm Holdings (SIRI US) in the Nasdaq-100 Stock Index (NDX INDEX) after the close of trading on 21 June.
• Passive trackers will need to buy just over US$500m of ARM Holdings (ARM US) while the estimated selling in Sirius Xm Holdings (SIRI US) is smaller.
• There could be passive selling in NVIDIA Corp (NVDA US), but this will be a lot smaller than the expected buying from the Technology Select Sector SPDR (XLK US) ETF.

• Mediatek Inc (2454 TT)’s 3Q24 is expected to experience a quarter-on-quarter increase of about 5%.  
• MediaTek is currently developing new processors based on Arm architecture and natively supporting the Microsoft Windows operating system.
• It is believed that MediaTek will tape out with TSMC 3nm technology, targeting the 1H25 market.

• 4Paradigm, China’s AI software company with focus on enterprise-level solutions, performed well and achieved solid growth in 2023 and Q1 2024. 
• In my insight, I discuss valuation framework for comparable company analysis and set a new 12-month PT for 4Paradigm.
• The company’s management has set a clear goal of profitability. I like 4Paradigm’s leadership position and hyper-growth in revenue from the Sage AI Platform.

• NVIDIA deploys a three-pronged strategy to support the rapidly growing AI ecosystem. First, Corporate Investments. Second, NVentures. Third, NVIDIA Inception.
• NVentures supports innovators who are deeply relevant to NVIDIA. NVentures aims to produce solid financial returns while growing the ecosystem.
• NVIDIA participated in 35 deals in 2023 (6x more than in 2022). It has been more active than firm like Andreessen Horowitz and Sequoia.

• Short Rumble with a price target of $0.90 per share, representing an 88% downside
• Despite recent partnerships and market cap boost, company faces challenges like negative cash flow, declining user numbers, and inexperienced management
• Investment is risky due to technical factors like limited available shares and high borrowing costs, advises monitoring stock performance and adjusting position sizes based on upcoming election结果

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• There are no constituent changes for the VanEck Vectors Semiconductor (SMH US) ETF in June but there are a lot of float and capping changes.
• There is US$1bn to sell in NVIDIA Corp (NVDA US) while there will be passive buying in Advanced Micro Devices (AMD US) and Intel Corp (INTC US). 
• The selling in NVIDIA Corp (NVDA US) will offset part of the potential passive buying from Technology Select Sector SPDR (XLK US) and other similar ETFs.

• Avnet delivered mixed financial results in its third quarter of fiscal year 2024.
• While the company met the strategic objectives and forecasts laid out for the period, several nuances within the report reveal the complex environment in which the company is currently operating.
• Avnet reported a revenue of $5.7 billion for the quarter, a figure that aligns with company projections but represents a significant decline compared to the previous year’s figures.

• Guidewire recently disclosed its results for the third quarter of fiscal year 2024, which exhibited a strong operational performance and positive strategic developments.
• The company, which provides insurance software, expressed confidence in its cloud-based offerings and reported significant progress in both customer traction and financial metrics.
• During this quarter, Guidewire saw substantial customer adoption, evidenced by the closure of eight InsuranceSuite Cloud deals, bringing the year-to-date tally to 24—an increase of 33% year-over-year.

• Littelfuse, a global leader in circuit protection, reported its first quarter 2024 results which reflect a balanced narrative of progressing through challenges while capitalizing on long-term growth opportunities.
• The company continues to execute its strategies amid an evolving macroeconomic context, emphasizing diversification and operational efficiency which has been pivotal in navigating high inflation and uncertain market conditions.
• Littelfuse reported a drop in revenue by 12% year-over-year, attributing much of this decline to ongoing inventory adjustments across its channels and weaker end-market demands particularly noted in the Electronics and Industrial segments.

• MACOM’s financial results for the second fiscal quarter of 2024 reflect a healthy and profitable business environment, with continuing investments aimed at future growth opportunities.
• The company reported a revenue of $181.2 million, a 15.3% sequential increase, and adjusted EPS of $0.59 per diluted share.
• These figures are indicative of MACOM’s robust performance, particularly in the Industrial and Defense (I&D) and telecom sectors, demonstrating strong existing operations and the added financial benefits from the recent acquisition of an RF business.

• Smartsheet has reported a strong start to the fiscal year 2025 with a number of positive developments, though there are areas that warrant close observation as the company moves forward with its new initiatives.
• Smartsheet’s growth narrative continues to strengthen with a reported annualized recurring revenue (ARR) of $1.056 billion, marking an increase of 19% year-over-year.
• This growth has been buoyed by a significant increase in the number of customers contributing more than $100,000 to Smartsheet’s ARR, indicating robust customer expansion and deeper penetration within existing accounts.

• Shift Up (462870 KS) plans to raise up to US$320m in its South Korean IPO.
• Shift Up is a South Korean games developer, which as released three games so far for the global markets.
• We have looked at the company’s performance, undertaken a peer comparison and talked about valuations in our past notes. In this note, we talk about the refiling and other updates.

• We expect strong 30-35% YoY earnings growth in Plover Bay Technologies (1523 HK) for its earnings to be released in July for H1 FY24. 
• We expect the company to continue its 80% dividend payout ratio, which will result in a 4% semi-annual yield (8% annualized). 
• Trading at 12.2x with >50% ROEs and net cash of >30 mn USD, we expect the strong results to catalyze a further multiple rerate.

• Nokia and Foxconn are collaborating to manufacture 5G products in northern Vietnam, potentially boosting the country’s tech industry.
• Huawei’s entry into the automotive tier-1 market raises questions about its impact on traditional car manufacturers.
• The UK semiconductor industry and Taiwan Semiconductor Manufacturing Company (TSMC) are highlighted at London Tech Week, showcasing their importance in the tech world.

• Intel’s 2023 10K includes two new risk sections relating to its foundry plans and Smart Capital approach to funding them. 
• It labels its foundry plan as “Highly Risky” and rates its chances of success as “highly uncertain”
• They also helpfully warn that they have “limited experience” with the third party foundry business, just FYI

• Revenue for 1H FY10/24 was JPY85.9bn, up 35.5% YoY, with a business profit of JPY2.2bn, up 146.1% YoY.
• RENOSY Marketplace business revenue was JPY83.6bn, up 35.3% YoY, and ITANDI business revenue was JPY2.1bn, up 34.1% YoY.
• FY10/24 company forecast revised to JPY185.0bn in revenue and JPY3.7bn in business profit, with EPS unchanged at JPY45.90.

• Severe cyclical downturn impacting broadband/optical telecom equipment vendors
• Author believes ADTN has significant upside potential of 2.5x-5x from current price
• Expectation for ADTN to reach $1-$1.50 EPS power over next two years, confident in company’s ability to manage tight liquidity situation without diluting shareholders

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• The Technology Select Sector SPDR (XLK US) ETF tracks the Technology Select Sector Index and has an AUM of over US$70bn.
• NVIDIA Corp (NVDA US) has broken through the US$3tn market cap barrier and is very close to Apple (AAPL US) in terms of free float market cap.
• If NVIDIA ranks higher than Apple on free float market cap at the close on Friday, there could be huge inflows to NVIDIA and outflows from Apple a week later.

• TSMC: +21.3% Premium; Trading at New +15-25% Range This Year
• ASE: +12.7% Premium; We Continue to View 14%+ as Fresh Short Level
• CHT: +1.2% Premium; Good Level to Short Relative to History

• Crucial Vote: Shareholders are voting on Musk’s $56 billion compensation deal and Tesla’s reincorporation in Texas, pivotal decisions for the company’s direction.
• High Stakes: The outcome will determine Musk’s commitment to Tesla, potentially shifting his focus to other ventures and impacting Tesla’s operations.
• Institutional Opposition: Significant resistance from institutional investors and logistical issues for global shareholders create uncertainty. Abstaining from voting counts as a vote against, hindering Elon-supporting retail investors.

• AEM (AEM SP) announced a new CEO as of 30th of May 2024. The new CEO officially starts 1st of July 2024.
• Amy Leong will take over from Chandran Nair as she leaves her Chief Commercial Officer role at Formfactor Inc (FORM US). 
• Given the weak business results and inventory management issues it should be expected that Mrs Leong would want to clean the proverbial house before she starts in her new role.

• India is limiting Chinese participation in Indian subsidiaries while seeking investments from Taiwan, diversifying its economic ties.
• AWS is committing significant funds to establish data centers in Taiwan, anticipating obstacles in securing renewable energy sources.
• Elephantech is seeking collaborators to scale up their eco-friendly PCB manufacturing operations to meet the escalating demand. Join the sustainable production movement.

• Revenue was JPY954mn (+32.5% YoY), with subscription-based recurring revenue at JPY837mn (+23.6% YoY), accounting for 87.8% of total revenue.
• Operating profit was JPY315mn (+94.2% YoY), with operating expenses at JPY638mn (+14.5% YoY), and OPM at 33.1% (+10.5pp YoY).
• Companywide ARR totaled JPY3.4bn (+22.7% YoY), with user count at 1,292 companies (+6.2% YoY) and churn rate at 1.05% (+0.01pp YoY).

• Last night Bloomberg’s Mark Gurman reported that in exchange for OpenAI’s position in MacOS, IOS, and iPadOS, Apple would pay OpenAI nothing. 
• To level set, earlier this week, Apple unveiled their implementation of artificial intelligence, branded “Apple Intelligence”.
• Apple Intelligence separates itself from Google’s Gemini and OpenAI’s ChatGPT by identifying and addressing user queries that contain personal information, but for capabilities it isn’t capable of performing, asking for user permission, and outsourcing the request to OpenAI’s ChatGPT, anonymously. 

• Revenue increased by 10.6% YoY to JPY4.0bn, with cloud services revenue up 79.3% YoY due to subscription growth.
• Operating loss was JPY109mn, pre-tax loss JPY42mn, and loss attributable to owners JPY35mn, all improved from Q1 FY12/23.
• Revised 1H FY12/24 forecast: revenue JPY8.2bn, operating loss JPY500mn, pre-tax loss JPY500mn, and loss attributable to owners JPY400mn.

• In FY12/23, CSC reported revenue of JPY3.1bn (+34.5% YoY), operating profit of JPY550mn (+42.5% YoY), recurring profit of JPY560mn (+41.5% YoY), and net income attributable to owners of the parent of JPY427mn (+39.4% YoY).
• Revenue expanded on improved annual recurring revenue (ARR) and user count of Shadankun, WafCharm, and SIDfm products.
• The company released its new product, CloudFastener, in October 2023.

• Sales rose by JPY1.9bn (+5.3% YoY) due to growth in Security Equipment, Peripheral Computer Equipment, and Others segments.
• Recurring profit increased by JPY6.1bn (+76.2% YoY) due to equity method investment gain from Iwatsu Electric Co., Ltd.
• Ai Holdings revised full-year earnings forecast for FY06/24: Recurring profit JPY18.6bn, net income JPY15.6bn, sales JPY53.0bn.

• A8 New Media (800 HK) disclosed a Cayman scheme privatisation offer from Mr Liu Xiaosong (Founder, Chairman, CEO) at HK$0.36 per share, a 162.8% premium to the last close price. 
• The massive premium is unsurprising, as A8’s EV has been negative since April 2023 due to headwinds from the weak Chinese leasing sector and uncertainty about cash use.  
• The high takeover premium, no shareholder holding a blocking stake, and low AGM minority participation rate point to a done deal. However, this is a small-cap illiquid stock.  

• On 12 June, SK Telecom (017670 KS) confirmed that its affiliate Sapeon plans to merge with its competitor Rebellions by end of this year.
• Sapeon and Rebellions’ largest global competitor is Nvidia. A key aim of the merger is to challenge Nvidia and try to take away its global dominance in AI chips.
• If the combined Sapeon and Rebellion can take away just 1% market share resulting in 1% of Nvidia’s market cap, this would suggest valuation of US$31 billion.

• Transsion is the global No. 4 largest smartphone producer according to IDC.
• In 1Q24, shipments increased by 34% YoY and revenue increased by 88% YoY.
• We see the stock’s upside at 17% and the price target at RMB100.00.

• Sony plans to achieve profitability in car camera business by 2026, aiming for 6x growth in the sector.
• Samsung cancels anniversary events to focus on new management plan in response to crisis within the company.
• Taiwan’s passive component makers like Yageo and Ample flourish in AI boom, indicating growth potential in semiconductor industry.

• Following a suspension on the 28th May, property rental play A8 New Media (800 HK) has now announced an Offer by way of a Scheme from chairman/founder/major shareholder Liu Xiaosong.
• The Cancellation price is $0.36, a whopping 162.77% to last close. The price is final.
• This is a done deal. But A8 is an illiquid micro cap. 

• i-mobile reported cumulative Q3 FY07/24 revenue of JPY16.3bn (+14.3% YoY), operating profit of JPY3.7bn (+9.2% YoY).
• Consumer Service business cumulative Q3 revenue was JPY14.2bn (+19.4% YoY), with segment profit of JPY3.5bn (+18.9% YoY).
• Online Advertising business cumulative Q3 revenue was JPY2.1bn (-11.8% YoY), with segment profit of JPY316mn (-39.3% YoY).