TMT/Internet

• There will be 8 additions and 8 deletions for the KOSDAQ 150 Index (KOSDQ150 INDEX) at the next rebalance to be implemented at the close on 12 December.
• Most of the inclusions were forecast but there is a lot of variance among the list of deletions… index committee knows best!
• Fadu (440110 KS) was ignored for yet another rebalance, while Snh Inc (051980 KS) has also not been included in the index.

• Tuya Inc (TUYA US/2391 HK), a leading IoT cloud platform in China, was listed on the 18th March 2021 at US$21.00/ADS. The share price is currently down 92.5%. 
• Tuya subsequently established a primary dual-listing in Hong Kong on the 5th July 2022, priced at HK$19.30/share. Those shares are down ~23% 
• Temasek-Backed 65 Equity Partners has now acquired a 13% stake (equivalent to ~6.2% of the voting rights) in Tuya, with a view to establishing a secondary listing on the SGX.

• Hong Kong is again trading well below its historical multiple valuation levels after the October/November correction.  Mainland investors bought a record amount the day after Trump’s win.
• Kingsoft Corp (3888 HK) reported consensus beating results with its online game segment surging.  The company is benefiting from AI upgrades in its office SAAS business.
• Precision Tsugami China (1651 HK) posted blockbuster earnings for its 1H25 as the machine tool sector rebounds on the back of factories upgrading to intelligent manufacturing.

• On 18 November, it was announced that 65 Equity Partners (backed by Temasek) will invest US$100 million (S$134 million) for a 13% stake in Tuya Inc (TUYA US). 
• Net cash as a percentage of market cap is currently at 92%. Tuya’s sales growth and improvement in operating margin in 1Q-3Q 2024 have also been impressive this year.
• Comps are trading at average EV/EBITDA of 13.7x in 2025 versus 2.3x for for Tuya. If Tuya continues its turnaround, its valuation gap versus its peers could decrease further. 

• Qualcomm is aggressively pushing into the PC market, aiming to transform its identity from a mobile chip giant to a diversified computing powerhouse.
• At its recent investor day, Qualcomm announced bold revenue projections of $4 billion from PC chips by 2029, alongside significant strides in automotive, industrial IoT, and XR markets.
• This marks a pivotal moment as Qualcomm ventures beyond its traditional smartphone business, which currently accounts for 75% of its chip revenue.

• Xiaomi reported CY3Q24 revenue, non-IFRS EBIT and non-IFRS net income 4.7%, 7.8%, and 16.6% vs. consensus. 
• C4Q should be even stronger, as (1) appliance subsidy drive IoT revenue and margin improvement, (2) SU7 production output ~doubles
• We reiterate Xiaomi as our TOP BUY idea and raise Xiaomi’s TP to HK$ 33 to reflect the improved profit outlook. Our TP implies 26.6x CY25 P/E.

• Harmonic reported record results for the third quarter of 2024, with total company revenue and profitability exceeding expectations.
• The company’s Broadband and Video segments both contributed significantly to this performance, showcasing strong execution on business plans.
• The Broadband revenue reached $145.3 million, marking a 92% year-over-year increase and a 56% sequential increase.

• Hang Seng Index (HSI INDEX) implied volatility fell across the term structure and skew. The skew displays a smile favoring specific option strategies.
• The most traded HKEX traded tailor-made combinations are Call and Put Spreads. Straddles, Strangles and Butterflies have become less popular most recently.
• While three quarters of all strategies take a long volatility position, there is a balance in bullish, bearish, and market-neutral strategies.

• Ziff Davis reported its financial performance for the third quarter of 2024, highlighting several strategic advancements and financial outcomes.
• Total revenue grew by 3.7% compared to Q3 2023, reaching $353.6 million.
• Adjusted EBITDA increased more significantly, by 9.6%, reflecting a focus on operational efficiency and cost management that resulted in a higher adjusted EBITDA margin of 35.3%.

• Lightspeed Commerce Inc. reported its fiscal Q2 2025 earnings, showcasing robust performance with a 20% year-over-year increase in total revenue to $277.2 million, surpassing their projected range of $270-$275 million.
• This growth was driven by a significant rise in payment services penetration and effective cost control measures, resulting in a record adjusted EBITDA of $14 million, up from breakeven in the same quarter last year.
• Furthermore, Lightspeed’s trailing 12-month revenue exceeded $1 billion, demonstrating positive momentum for the company as it celebrates its 20th anniversary.

• The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
• The indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.
• In this insight, we take a look at our updated flow estimates for December 2024. Separately, we have also presented our latest March 2025 index review predictions.

• 3Q25 (Oct-25) 5% above Consensus, Hopper growing incl H200, no Blackwell revenue. 4Q25 (Jan-25) guidance inline with Consensus but Nvidia has beat guidance for 8 quarters.
• Jan-25: Blackwell revenue “several billion dollars”. Supply keeps to increase but supply constraints. GM will moderate to low-70% during Blackwell ramp due  but will stabilize at mid-70%.
• The stock is not expensive, trading at its average multiples since 2019: 51x trailing EPS, 34x forward EPS. These multiples are high in an absolute sense, but average for NVDA.

• Both online marketing and “other revenues” grew strongly in 3Q24.
• Both the gross margin and the operating margin improved over the same period last year.
• We believe total revenue will accelerate when live streaming is not significant and margins will rise when e-commerce makes profit.

• QCOM estimates ~5% Android revenues growth Cagr to FY29, Automotive 22%, IoT 21%. If QCOM keeps Apple business, revenue Cagr will be 9% to FY29. If QCOM loses it: 6%.
• Mngt forecasts high Opex control, target at 22% of revenue, which looks aggressive. Opex reached 31% in FY23-24 . At 22% Opex, Operating Profit would grow ~13% Cagr to FY29.
• Android growth looks low, Opex control demanding. As such, we could conclude that 10% Operating Profit Cagr is more likely than 13%. Even with lower growth, the stock is cheap. 

• Freee KK (4478 JP) offers cloud-based online accounting and HR/Payroll software to small and medium businesses (SMBs) in Japan. The company operates a subscription-based revenue model.
• Freee reported its first-ever profits recently and we expect continued improvement in freee’s profitability driven by its strong business model vs MF whose business model has started to breakdown.
• Freee’s current valuation multiples are cheap and there is significant upside to the current share price, hence we recommend making an entry.

• NetEase reported C3Q24 revenue, GAAP operating profit and GAAP net income in line, (3.6%) and (5.3%) vs. our estimates, and in line, (4.4%) and (5.0%) vs. consensus. 
• Mobile game revenue decline is less a concern due to imminent pipeline launches, but PC game’s significantly beat is a positive surprise. 
• We raised the TP to US$118 for the better outlook of new game launches.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Health and Happiness (H&H), Yinson Production, Xiaomi Corp, ReNew Energy
• In the US, October housing starts declined 3.1% m-o-m to an annualised 1.31 mn units (-1.5% e / -1.9% revised p), the slowest pace in three months as builders put off projects in the wake of hurricanes Helene and Milton.
• Meanwhile, October building permits (a proxy for future construction) eased 0.6% m-o-m to an annualised 1.42 mn units.

• Dynatrace reported a strong performance in its second quarter of fiscal 2025, showcasing solid financial results and effective execution of its strategic initiatives.
• The company posted an annual recurring revenue (ARR) increase of 19% year-over-year to $1.62 billion, propelled by robust expansion bookings, especially in Europe, and an improvement in booking seasonality related to a switch to 6-month sales compensation cycles.
• Subscription revenues grew by 20% year-over-year, further supporting the company’s financial momentum.

• EPAM Systems, Inc., a global leader in software development and digital platform engineering services, reported its third-quarter 2024 results, which were stronger than analysts anticipated.
• The company demonstrated revenue growth on both a year-over-year and sequential basis, signaling potential stabilization in the market.
• This growth was primarily fueled by increased customer engagement across various verticals, notably in life sciences and healthcare, financial services, software, and biotech.

• Datadog’s third quarter 2024 financial results indicate continued growth and expansion in their operations, though there are a mix of positive and challenging elements to consider.
• Revenue for the quarter was $690 million, representing a 26% increase year-over-year and surpassing the high end of the company’s guidance.
• The company added about 2,400 customers over the past year, reaching a total of approximately 29,200.

• HKBN Ltd (1310 HK), a Hong Kong broadband play, is never short on privatisation rumours. China Mobile (941 HK) is reportedly (again) holding talks with HKBN’s major shareholders. 
• China Mobile is a logical suitor. I highly doubt a non-PRC (government-affiliated) corporation would be permitted to take HKBN private.
• Previous takeover rumours over the years came to nought. It may be different this time. HKBN was suspended this morning pursuant to the Takeovers Code.

• With the review period nearly complete, there could be one change for the S&P/ASX 50 Index and one change for the S&P/ASX 200 (AS51 INDEX) in December.
• Both deletes are also deletions from a global index next week and there could be short-term buying/covering opportunities on a drop in the stock price.
• There has been a buildup of cumulative excess volume in all stocks over the last few months. There has been no increase in positioning in CAR Group (CAR AU) recently.

• Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 December.
• With no increase in the number of index constituents this calendar year, there could be inclusions in December. The process of getting to 100 index constituents could drag into 2026.
• Short interest is especially large in Sinotruk, Giant Biogene, Kuaishou Technology, ASMPT and JD Logistics and inclusion could set off some short covering.

• Amid Samsung Electronics announcing a huge buyback of 10 trillion won, one of the issues that has resurfaced is the potential sale of Samsung Electronics by Samsung Life Insurance.
• The total amount of Samsung Electronics that could be sold by Samsung Life Insurance and Samsung F&M Insurance is 25.6 trillion won (at current prices). 
• We remain Positive on Samsung Electronics. The 10 trillion won buyback program is a positive sign on the company’s willingness to provide higher shareholder returns.

• It has been a relatively quiet week.
• Bitcoin has outperformed much of the market, resulting in an increase in its dominance, as highlighted in Thursday’s Crypto Moves #52.
• This was most likely driven by the intense buying pressure from MicroStrategy over the past week.

• Nagarro SE (NA9 GR) is in discussions for a potential delisting and takeover, with private equity firm Warburg Pincus reportedly considering a buyout.
• Strong Financial Growth: Q3 2024 revenue rose by 3.7% to €242.9M, with a 5.6% constant currency growth, adjusted EBITDA improving to €34.6M (14.3% of revenue).
• Nagarro trades at a P/E ratio below peers, suggesting undervaluation despite financial resilience, strong liquid assets, and 14% stock price growth over the last eight trading days.

• Spotify Technology S.A. delivered a mixed set of results for the third quarter of 2024, showcasing both achievements and continued challenges as the company navigates through its business strategy.
• On one hand, it marked a milestone by delivering strong growth metrics in both subscribers (net addition of 6 million to reach a total of 252 million) and monthly active users (MAU, rising by 14 million to 640 million).
• These metrics exceeded Spotify’s guidance and reflect its dual focus on product innovation and marketing efficiency.

• NVIDIA, the undisputed leader in AI-driven GPUs, is currently navigating turbulent waters with its latest Blackwell architecture chips.
• While the company has been riding high on record-breaking revenues and a surging demand for AI compute power, reports of overheating issues in Blackwell chips have cast a shadow over its otherwise stellar growth trajectory.
• According to recent disclosures, these state-of-the-art GPUs face severe thermal management challenges when configured in server racks holding up to 72 units.

• Soitec is a leading supplier of specialty engineered wafers for semiconductor manufacturing, particularly in smartphone RF applications.
• The company experienced a downturn in the smartphone market and covid-related inventory corrections but is poised for growth as chip complexity and demand for their products increase.
• Soitec is expanding their market with silicon carbide (SiC) wafers for EVs, which could significantly boost earnings by 2025/2026, with a price target of €175 over 1.75 years and a 70% upside potential for investors.

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 delay of a major contract inevitably has an impact on short-term profitability. Solid State has a strong balance sheet and a growth strategy to develop into a higher value-added electronics components and systems business, as witnessed by the two recent small acquisitions. Post the current hiatus we expect this to drive growth and value creation.

• The market’s reaction to Samsung Fire’s stake sale seems overhyped. Given past share sales, Life may outperform Fire as this momentum unfolds.
• I don’t see SDS merging with Samsung Electronics. It lacks synergy and could stir up PR issues. If Sammy’s stock stalls, Lee Jae-yong might sell more of his SDS stake.
• I’m still bullish on Sammy prefs. If the tax reform passes, a special dividend, not a buyback, will be the cleanest way for Samsung to address inheritance tax.

• There are 15 changes for the TIP Taiwan Value High Dividend Index in November. The Yuanta Taiwan Value High Dividend ETF (00940 TT) has an AUM of US$5bn.
• Estimated one-way turnover is 26% and there are 16 stocks with over 4 days of ADV left to trade. The rebalance commenced yesterday and will end on Friday.
• An equal weighted basket of inclusions has outperformed an equal weighted basket of deletions since July. That could continue over the week as the ETF continues to rebalance their portfolio.

• In this insight, we take a look at our final expectations for index changes for ASX200, 100, 50, and 20 in the run-up to the December 2024 index rebal event.
• We do not see any index changes for ASX 20 and ASX 100.
• We expect one change for ASX 50 and one change for ASX 200.

• Bloomberg reports that China Mobile (941 HK) is exploring a buyout of HKBN Ltd (1310 HK) and is willing to pay at least HK$5.00, a 16.0% premium to last close.  
• HKBN has been the subject of numerous bid rumours, which seemingly came to nothing due to the challenge of meeting the largest shareholders’ (TPG and MBK) price expectations. 
• The rumoured offer price will struggle to gain TPG/MBK’s backing. The current valuation is unappealing, as HKBN trades at a premium multiple compared to peers at the last close. 

• Korea Exchange (KRX) plans to make special changes to the Korea Value-Up Index constituents on 20 December.
• We believe that following five stocks are likely inclusions in the Korea Value Up index rebalance on 20 December (KB Financial, Hana Financial, SK Telecom, KT Corp, and LG Electronics).
• The new companies that will be included in the Korea Value-Up Index include companies that provide detailed corporate value up plans by 6 December.

• Nvidia’s Blackwell rack design overheating issues causing potential shipment delays
• AMD leading server market in 3Q24, Intel fighting back in PC market
• Trump’s tariff changes impacting Chinese EV makers, with 4 strategies to navigate the changes. Huawei and Xiaomi dominate China’s AI smartphone market with over 50% market share.

• Fortinet’s third-quarter financial results for 2024 showcase robust performance and a strategic focus on growth markets in the cybersecurity landscape.
• The company’s total revenue grew by 13%, a return to product revenue growth bolstered by strong service revenue expansion.
• Fortinet’s strong execution led to record gross and operating margins, with the latter increasing by 830 basis points to over 36%.

• Hong Kong market sectors outperforming since the stimulus in September are Consumer Discretionary and Healthcare as Utilities, Telecom and Energy lag.
• CRRC Corp Ltd H (1766 HK) gets BUY recommendations as its results point to continued strength in the rail equipment sector with passenger volume surging.
• Tencent Music Entertainment Group (1698 HK) reported solid results as it shifts to a pay-to-stream subscription model. Xiaomi Corp (1810 HK) had a blowout quarter with EV sales surging.

• IonQ, Inc., a leading company in the quantum computing space, reported its results for the third quarter of 2024, showing considerable progress both financially and operationally.
• The company recognized $12.4 million in revenue for the quarter, surpassing its guidance range of $9 million to $12 million.
• This marks a year-over-year doubling of third-quarter revenue, highlighting robust growth and demand for IonQ’s quantum computing services.

• Rapid7’s financial performance in the third quarter of 2024 demonstrates both strengths and challenges in its business operations, as outlined during their earnings call.
• Starting with the positive aspects, Rapid7 ended the quarter with an annual recurring revenue (ARR) of $823 million, representing a 6% year-over-year growth.
• This ARR growth was primarily driven by their threat detection and response sector, which continued to show robust double-digit growth.

• On Friday 15 November, KKR announced it would launch KKR Tender2 to buy the rest of FujiSoft not purchased in KKR Tender1. Their new price is ¥1 higher than Bain’s.
• Fuji Soft Inc (9749 JP) announced (J) it supported the KKR2 Tender and rejected the Bain TOB Proposal. KKR1 shareholders are “made whole” at ¥9,451/share. Minimum is 53.22%.
• The document, however, is a Governance Disaster – an absolute shambles, effectively gaslighting investors at every turn. And now investors can see it was problematic from the start.

• TSMC cash dividend has increased by 65% in 2 years or NT$2.75 in 4Q22 to NT$4.50 in 3Q24. It will keep increasing.
• TSMC is spinning cash. 2nm-16A could increase Capex intensity but still we estimate that quarterly dividend can increase to NT$5.50 in 2025 and NT$6.00 in 2026.
• Consensus forecasts similar EPS growth for TSMC and ASML: 30% in 2025, 20% in 2026. TSMC is 50% cheaper than ASML. 2025 PEx: TSMC 18x and ASML 28x.

• TSMC: +16.7% Premium; Further Market Weakness Could Soon Open Up Good Long Level
• UMC: -2.1% Discount; Good Level to Go Long the ADR Spread
• ASE: -0.1% Discount; Premium Completely Broken Down & Local Short Interest Continues to Surge

• Hon Hai, Pegatron, and Quanta Gear Up for Potential U.S. Investment Surge Amid Trump Policy Speculation
• PC Monitor: Asustek & Lenovo Signal Strong PC Growth, AI PC Expansion in Process
• Semiconductor Memory Q324 Revenue Close To Historic Highs Even As Decoupling Intensifies 

• TSMC: more restrictions on export to China. TSMC can’t make 2nm in US before 2028-29. Lawsuit in Arizona.
• Korea: special chips act to give chipmakers subsidies and an exemption from a national cap on working hours. Korean engineers only work 52 hours / week. That’s a problem.
• Amazon more in-house AI chips. Super Micro trying to avoid delisting. Smartphone ASP keep increasing because chip prices are increasing (ie Mediatek, Qualcomm). AI PC reaching 20% in 3Q214. 

• Asustek Guides for 20%+ YoY PC Revenue Growth in 4Q24E;  Lenovo Delivers 17% YoY PC Revenue Growth in CY3Q24
• AI PCs: A Multi-Year Upgrade Cycle with Rising Average Selling Prices; AI PCs 80% of the PC Market by 2027E
• Maintain Structural Long View for AI PC Up-Cycle; Asustek, Acer, & Lenovo Well-Positioned Through 2025E

• Cuscal (1229Z AU) is looking to raise A$337m (US$218m) in its Australia IPO.
• Cuscal is an authorized deposit-taking institution (ADI) in Australia that primarily provides financial infrastructure and payment services in Australia.
• In this note, we look at the updates since our last look-through and share our thoughts on valuation.

• Pony AI (PONY US), an autonomous mobility solutions provider, is looking to raise up to US$195m in its US IPO.
• As per Frost & Sullivan, Pony AI was among the first companies in China to obtain licenses to operate fully driverless robotaxis in all four Tier-1 cities in China.
• We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

• In 3Q2024, Sea Ltd demonstrated its ability to turn a profit at Shopee, whilst booking strong growth, with sales & marketing kept well in check and active users increasing substantially.
• E-Commerce registered higher take rates, through higher commissions, more paid advertising, and increasing levels of self-fulfilment through SPX Express, whilst Digital Financial Services saw a rapid acceleration in loan growth.
• Digital Entertainment was back on form with strong growth in bookings, active users, ARPU, and adjusted EBITDA. Management remains confident about 4Q2024 and the outlook for 2025.

• KKR & Co (KKR US) has secured the Fuji Soft Inc (9749 JP) Board’s unanimous support by bumping its second tender offer to JPY9,451, a JPY1 premium to Bain’s JPY9,450 offer. 
• The Board is claiming a “fiduciary duty” win as it has secured a higher offer from KKR but paradoxically signalling that it will not negotiate a bump from Bain.  
• Bain will likely walk rather than try to win the Board’s support by revising terms. At the last close, the gross spread to KKR’s offer is 3.7%.

• I tally 48 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Six new deals this week! TOs for Agro Kanesho (4955 JP), Nishimoto (9260 JP), Chita Kogyo (5993 JP), Macromill (3978 JP). Also Silk Logistics (SLH AU) and Avarga (AVARGA SP).
• Key updates took place on: Pacific Smiles (PSQ AU), ASMPT (522 HK), Nec Networks & System Integr (1973 JP), Seven & I (3382 JP), and Malaysia Airports Holdings (MAHB MK).

• Tencent reported C3Q24 revenue, IFRS operating profit, and IFRS net income in-line, in-line, 11% vs. our estimates and in-line, in-line, 18% vs. consensus. 
• The bright spot is fintech transaction volume grew 10% YoY showing gain in market share, which coupled with rebound in consumption since October should rive recovery.
• We raise TP by 2% to HK$518. Tencent is still our TOP PICK in an uncertain geopolitical environment with an upswing fundamental story.

• The December review will use closing prices from 18 November to determine the list of stocks that will be included into and excluded from the ETFs.
• As of the close on 15 November, we see NAURA Technology Group (002371 CH) replacing Huaneng Lancang River Hydropow (600025 CH) in the ETFs.
• NAURA Technology has doubled in price this year, while Huaneng Lancang has corrected from its highs and could be deleted from the ETF in just one quarter.

• Pony AI, a China’s robotaxi operator and self-driving technology company, plans to raise up to $360M in upcoming IPO and concurrent private placements.
• Pony AI is expected to IPO next week. The company’s amended F-1 puts the price range per ADS at $11.00-$13.00, implying a market cap of ~$4.2B at the midpoint.
• I believe Pony AI may price its IPO at the bottom of a range after WeRide’s mixed debut. IPO valuation suggests a drop from last round valuation of ~$8.5B.

• Fabrinet’s first-quarter results for fiscal year 2025 reveal both promising growth and challenges.
• With a revenue of $804 million, the company surpassed the upper end of its guidance range, representing a 17% year-over-year increase and a 7% sequential rise from the previous quarter.
• This growth was driven by significant performances in its major operating segments, particularly in optical communications.

• In the most recent financial results, HubSpot, Inc. reported several positives and negatives that are important for investors to consider when evaluating the company’s investment potential.
• On the positive side, HubSpot achieved a 20% year-over-year revenue growth in constant currency, demonstrating robust financial performance.
• The company’s operating margin grew by over 200 basis points, reaching 19%, showcasing a strong emphasis on operational efficiency.

• Lattice Semiconductor provided a detailed overview of its financial performance and strategic outlook for the third quarter of 2024.
• The company’s results were generally in line with internal expectations, marking distinct progress in specific segments despite facing notable industry-wide headwinds.
• Revenue for the quarter was reported at $127.1 million, maintaining alignment with previously provided guidance.

• Match Group, a leading company in the online dating industry, has presented mixed results in their third-quarter financial performance for 2024.
• The results reflect both opportunities and challenges across different brands within the company’s portfolio, particularly in flagship products such as Tinder and Hinge.On the positive side, Match Group continues to see strong momentum with Hinge, which has delivered impressive user growth and revenue achievements.
• Hinge reported a 36% year-over-year increase in direct revenue, supported by a 21% rise in users willing to pay for the app, and a 12% increase in Revenue Per Payer (RPP).

• Samsung Electronics (005930 KS) announced a massive share buyback program worth 10 trillion won which represents 3.1% of its market cap.
• Of this total amount, about 3 trillion won will be purchased and cancelled in the next three months. This will include 50,144,628 common shares and 6,912,036 preferred shares.
• We believe that this massive share buyback and cancellation is likely to boost Samsung Electronics’ share price resulting in a strong outperformance relative to KOSPI in the next 6-12 months. 

• The stock’s still below 1x PBR. But with Samsung’s tech gaps and slowdowns, going all-in on an outright long here off the back of this buyback feels way too early
• The key is whether pref discounts tighten like 2015, but with a more balanced buyback this time and narrowing pref discounts, making a pref rally harder to predict short-term.
• The goal’s the same as 2015—boosting the family’s control. If the remaining buyback leans pref-heavy, it could further tighten pref discounts, creating a potential opportunity to play the compression.

• Fidelity National Information Services, Inc. (FIS) reported mixed results for the third quarter of 2024, demonstrating both strengths and potential challenges in their operations.
• The company experienced a steady growth in adjusted revenue, which increased by 4% year-over-year.
• This growth was primarily driven by an acceleration in recurring revenue across its segments, notably in Banking and Capital Markets, with both segments achieving margin expansion.

• With Trump becoming the next President of the United States, we explain why the rechargeable battery sector in Korea is likely to get further battered in the coming months. 
• Trump administration could eliminate or significantly slash the $7,500 consumer tax credit for electric vehicle (EV) purchases, which is one of the key provisions of the Inflation Reduction Act (IRA).
• We expect the sell-side to further cut their earnings estimates on the key key names in the Korean rechargeable battery sector in the coming months.

• Compal and Nvidia form partnership for AI server collaboration in 2025, expanding capabilities in the tech industry.
• Taiwan’s upcoming AI Basic Act in 2025 prompts consideration of four competing versions, highlighting the significance of AI regulation.
• Foxlink launches Taiwan’s largest AI supercomputing hub for SMEs, showcasing the country’s advancements in technology for small businesses.

• The latest update from United States Cellular Corporation, reflected in their third-quarter 2024 earnings, provides key insights into the company’s current standing and strategic direction.
• Several highlights from the reporting period illustrate a combination of potential opportunities and inherent challenges impacting the company’s operations and future outlook.
• On the positive side, United States Cellular Corporation showed substantial progress in monetizing its spectrum assets, despite the broader market challenges.

• Sales decreased by 6.3% YoY, with operating profit down 24.4% and recurring profit down 55.5% YoY.
• Net income attributable to owners increased 470.0% YoY due to a gain on negative goodwill from Iwatsu Electric acquisition.
• Segment sales varied: Design increased 11.7% YoY, while Others decreased 12.5% YoY with profit down 55.9%.

PVA TePla (PVA) reported a 2.3% y-o-y decrease in sales in Q324 and management has set guidance at the lower end of the range for both sales (€270–90m) and EBITDA (€47–51m). Metrology sales held up nicely in the quarter, while sales in the other activities in the semiconductor division showed a decrease. We have lowered our estimates modestly for both FY24 and FY25 given a more challenging expected market environment in wafer fabrication for the semiconductor industry. On our new estimates, PVA trades at an EV/EBITDA FY25e multiple of 3.7x, which we believe is very undemanding.

• In Q2 FY03/25, revenue was JPY559mn (-12.4% YoY), with a gross profit of JPY156mn (-25.5% YoY).
• Full-year FY03/25 forecast: revenue JPY1.2bn (-7.4% YoY), operating loss JPY605mn, recurring loss JPY592mn, net loss JPY596mn.
• FY03/27 forecast: revenue JPY1.9bn, operating profit JPY7mn, recurring profit JPY4mn, net income JPY0mn.

• SoftBank group (SBG) relies mainly on Arm re-rating further for NAV growth, yet Arm’s valuation already discounts, in our view, much growth potential; SBG and Arm shares are highly correlated
• JPY-USD FX has weakened recently, but the potential for BoJ monetary tightening could reverse this trend impacting SBG, given the high skew of USD assets relative to USD liabilities
• The Vision Funds are hampered by few private company exits; SBG’s NAV discount remains high, but its dependence on Arm is a major risk; we turn negative on SBG

• On 29-October, NEC Corp (6701 JP) announced a low-ball TOB to buy out subsidiary Nec Networks & System Integr (1973 JP). It deserved activism, but finding an activist was tough.
• On 7 November, it got an activist, and I wrote on 8-November the Landscape Had Changed that they might have bought 6mm shares more in 5 days. They bought 8.4mm.
• The Landscape Has FULLY Changed. The details now matter quite a bit. NEC has two basic choices. Neither are that palatable. But Target Advisor DCF was ¥3,073-4,688 without synergies.

• A Democratic Party insider noted some proposals need legal tweaks, so the December 10 deadline may slip, but they’re set on passing the expanded director loyalty duty.
• FKI analyzed top conglomerates’ shareholder structures and found four of the top 10 facing substantial risks.
• We need more clarity before jumping in, but with MBK driving Korea’s hostile M&A scene and the Commercial Act amendments, local chaebols facing control battles are a key KOSPI theme.

• Grab booked an impressive performance in 3Q2024, with strong evidence of its high-value products such as advance bookings gaining traction along with increasing monthly transacting users through its Saver offering. 
• The company’s delivery business benefitted from strong performance from GrabMart and GrabFood. Its Grab Unlimited subscription hit record new highs, with users transacting four times as frequently as non-users.
• Grab also saw a strong performance from GrabFin and its digital banks, which all started lending in November plus rapid deposit growth. Guidance increased reflecting a more positive outlook. 

• After the market close on 14 November, SBI Fintech Solutions announced that the Japanese financial group SBI is pushing for a tender offer and delisting of SBI Fintech Solutions.
• The tender offer price is 5,000 won per share, which is 36% higher than the closing price on 14 November. The tender offer size amount is about 26 billion won.
• Given the relatively solid upside, we believe SBI Holdings is likely to successfully complete this tender offer and take the company private. 

• In Q3 FY24, Appier achieved record-breaking revenue, reaching JPY 9.1 billion, marking a 28% year-over-year growth.
• Operating income for Q3 surged by 2.5 times YoY to JPY 788 million, with the operating margin improving by 4.3 percentage points to 8.7%.
• At less than 4x EV/Sales and 16x FY25 EBITDA the stock does not appear expensive.

• Blackbuck (1355652D IN) is looking to raise about US$130m in its India IPO.
• Zinka Logistics (Blackbuck) is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators transacting on its platform in FY24, as per Redseer.
• Previously, we talked about the company’s historical performance. In this note, we share our quick thoughts on peer comparison and valuation.

• AEM (AEM SP) released 3Q24 numbers and bumped its guidance higher as its key customer pulled forward some orders.
• In 2025 it will be the first year where customers outside of Intel will make up the majority of AEM’s revenues. This is a big milestone for AEM.
• Continued business from Intel and growth in new key accounts means we should expect FY25 revenue growth. Guidance for FY25 will come by February 2025. 

• ASML maintains its 2030 targets: revenue EUR44-60bn, Gross Margin 56-60%. But the narrative has changed, again. In 2022, it was Mature nodes (DUV) and EUV. In 2024, it’s AI. 
• What’s changed? Lower growth in Smartphone, PC, Auto. AI bigger than expected. Server DRAM and HBM is the major positive change. NAND is revised down sharply. It’s actually believable. 
• The guidance implies Operating Profits growing between 9.5-17.5% Cagr over 2024-2030. That’s pretty good but the stock is trading at 27x 2025 EPS, 22x 2026. No room for disappointment. 

• Freee KK (4478 JP) reported 1QFY06/2025 results which saw the company generating its first-ever Adj. operating profit, earlier than we expected.
• The company has begun capitalising its software assets (decline in R&D costs as % of revenue) and this coupled with fall in S&M costs have contributed to profits.
• The corporate paying customers surpassed more than 200k for the first time and we expect freee’s earnings to continue to improve going forward.

• CCC Intelligent Solutions’ third-quarter fiscal 2024 performance highlighted both consistent financial growth and evolving challenges within the insurance and vehicle repair industries.
• The company reported a total revenue of $238 million, reflecting an 8% increase year-over-year, slightly exceeding their guidance range.
• Adjusted EBITDA was $102 million, a 9% improvement from the previous year, supporting a strengthened adjusted EBITDA margin of 43%.

• In 3Q24, game revenue increased by 13% YoY, higher than our estimate, 9% YoY.
• The gross margins of all business lines improve in 3Q24, especially “others”.
• We set the upside at 50% and the price target at HK$605 for the end of 2025. Buy.

• Sea (SE US) ‘s management expects all three business segments – ecommerce, financial services and entertainment – to deliver high growth and profitability in 2025, supported by strong macro-eceonomic tailwind.
• It’s GAAP revenue was US$4.3 billion, up 30.8% year-on-year and net income was US$153.3 million, as compared to total net loss of US$(144.0) million for 3Q2023.
• Its e-commerce business achieved positive adjusted EBITDA in 3Q 2024 in both Asia markets and Brazil.

• Blackbuck (1355652D IN) is looking to raise around US$130m in its India IPO.
• Zinka Logistics (Blackbuck) is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators transacting on its platform in FY24, as per Redseer.
• In this note, we talk about the company’s historical performance.

• ARM reported good numbers with steady guidance for the coming quarter.
• Qualcomm’s earnings performed well, but concerns exist over rising costs and potential loss of customers.
• Uncertainty surrounds US government policies on semiconductor manufacturing and trade with China, impacting industry players like Intel and Nvidia.

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• Foxconn’s reforms at Sharp result in significant profit growth in 2Q24.
• Taiwan supply chains brace for impact of Trump’s imminent global tariffs.
• Apple to boost iPhone production in India following Trump victory, taking advantage of evolving global trade dynamics.

• In the 3rd quarter of 2024, revenue was NT$4,284 million, the gross margin (GM) was 55%, the operating profit margin (OPM) was 24%, and the net margin was 15%.  
• The Gen-4 product line is ramping up and is expected to contribute around 4% of total revenue by the end of 2025. 
• Chinese current economic stimulus programs may impact demand in the Consumer segment.  

• Nexon’s 3Q24 earnings report saw its stock dip -17% as revenue missed guidance and foreign exchange losses weighed on the bottom line.
• Nexon’s operating profit rose +11% y/y to ¥51 billion, with an operating margin of 38%
• The stock is trading at 8.5x EBITDA, which makes it very attractive versus the sector

• Vontier Corporation delivered a strong performance in the third quarter of 2024, with notable achievements in sales growth and operational improvements.
• The company reported a 3% increase in core sales, exceeding the high end of their guidance range, indicative of robust momentum across their convenience retail and fueling end markets.
• This success was bolstered by the increased adoption of their market-leading technologies, particularly in the Environmental & Fueling and Mobility Technologies segments.

• Peloton’s earnings for the first quarter of fiscal 2025 demonstrate a balanced perspective of challenges and opportunities as the company maneuvers through a critical phase marked by leadership transitions and strategic realignment.
• The announcement that Peter Stern will assume the role of CEO and President starting January 1, 2025, heralds a potentially transformative phase for Peloton.
• Peter Stern brings substantial experience from previous roles at major corporations, likely setting a strong foundation for leadership and strategic direction.

• In 1H FY03/25, the company reported revenue of JPY1.12tn, operating profit of JPY313.9bn, and net income of JPY243.9bn.
• The revised full-year forecast for FY03/25 includes revenue of JPY2.40tn and operating profit of JPY680.0bn.
• The company announced a JPY70.0bn share buyback plan, acquiring up to 3.5mn shares, representing 0.8% of outstanding shares.

• We’re starting to see some local market players getting ready and setting up trades that bet on a potential split for Samsung Electronics.
• Samsung could leverage the buzz around spinning off its foundry business to split key units—foundry, memory chips, and others—into two or three separate companies at the shareholder meeting.
• Additionally, the valuation gap between Samsung Electronics and Biologics has narrowed more than it has in the last decade, making it an even more attractive opportunity.

• Pony AI (PONY US)  an autonomous mobility solutions provider, is looking to raise up to US$300m in its US IPO. 
• As per Frost & Sullivan, Pony AI was among the first companies in China to obtain licenses to operate fully driverless robotaxis in all four Tier-1 cities in China.
• In this note, we talk about the positive aspects of the deal.

• Horizon Robotics (9660 HK) raised around US$800m, including over-allocation, in its Hong Kong IPO. 
• Horizon Robotics (HR) is a provider of advanced driver assistance systems (ADAS) and autonomous driving (AD) solutions for passenger vehicles, empowered by its proprietary software and hardware technologies.
• We have looked at the company’s past performance and valuations in our previous notes. In this note, we will talk about the trading updates.

• TXN reported 3Q24 last night: EPS 7% above Consensus, small beat. However, 4Q guidance shows a delayed / tepid recovery: revenue to decline -6% YoY, EPS to decline -21% YoY.
• Industrial demand is still declining steeply -23% YoY, “hovering at the bottom”. Auto revenue -2% YoY with growth in China but rest of world is declining. 
• The stock is trading at 31x 2025 and 25x 2026 Consensus EPS, way above its valuations range.

• Global smartphone shipments expected to increase beyond 2025, with OLED technology gaining popularity in tablets and notebooks while Mini LED becomes less preferred.
• Uncertainty over whether Trump will end TSMC’s subsidies for Arizona factory, impacting material suppliers benefiting from TSMC’s growth in 3Q24.
• PSMC chairman shifts from cautious approach towards India to optimism with new partnership with Tata, while Horizon Robotics’ Hong Kong IPO supported by Alibaba, Baidu, and TSMC for manufacturing.

• Pony AI, a founder-led global autonomous driving company, filed for an IPO in the United States and may raise up to $300M on the Nasdaq exchange.  
• The technology company operates fully driverless robotaxis (L4) in Beijing, Shanghai, Guangzhou and Shenzhen, Mainland China.
• Pony AI has raised ~$1.4B in equity financing from top-tier investors, including Toyota Motor, HongShan, IDG Capital, 5Y Capital, ClearVue Partners, and Eight Roads Ventures, among others.