TMT/Internet

• Key iPhone components suppliers’ share prices have substantially underperformed Apple, particularly Largan Precision, Genius Electronic Optical, and Zhen Ding.
• There are reasons for iPhone 16 upgrade optimism. We also note that key suppliers failed to rally with Apple shares post-Fed rate cut.
• Apple suppliers’ 2025E forecasts haven’t fallen much so far, despite the negative stock market reaction. If negative iPhone 16 reports prove exaggerated, Largan, Genius, and Zhen Ding could rebound.

• Liquid cooling solutions for AI servers are evolving rapidly to provide more efficient and effective cooling for high-performance computing needs.
• L&T Semicon in India plans to mass produce its first chip within the next two years, showing growth and innovation in the semiconductor industry.
• Taiwan is focusing on modular, intelligent, and collaborative robotics solutions for niche markets, with a shift away from humanoids in its approach to robotics.

In our latest Asia Monthly, we discuss the performance of major Asian credit indices and review UST curve movements in September 2024. We also provide a recap of major news and macroeconomic releases, including those from the US, China, India, Indonesia and Japan.

In addition, we summarise the Top/Bottom performers, recent USD bond issuances and rating actions in Asian corporate credit, as well as a list of our recent research. The Asia Monthly publication serves to keep investors updated on developments in the Asian corporate USD bond market.

• XLMedia (XLM) has historically disappointed investors on AIM as a value trap
• Potential catalyst for over 100% upside in next 12 months
• Key factors in place for a turnaround, including cornerstone investor and focus on US gambling market

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.

• NPS will likely use the KRX Value-Up Index as its benchmark, with Long-Term Growth and Value categories likely to adopt it.
• When NPS shifts to the Value-Up Index, KOSDAQ stocks will likely drive significant flow impacts due to their lower overlap.
• These non-overlapping KOSDAQ stocks, attracting over 1 trillion won, could see significant price impacts as funds gradually flow in.

• The SoftBank NAV discount is historically high, which makes it appear optically attractive; despite this, we turn neutral on SoftBank group from our previous positive recommendation, due to its headwinds
• JPY strength is a key challenge, especially since the new Japanese prime minister supports the BoJ normalising monetary policy; this means BoJ tightening whilst many other central banks are easing
• Arm Holdings’ super premium valuation versus its peers is another potential headwind for SoftBank group shares and NAV, combined with the high correlation between Arm Holdings and SoftBank group shares

• TSMC: +14.2% Premium; Can Consider Going Long at Current Level
• UMC: +1.8% Premium; The ADR Headroom Has Decreased Yet Again
• ASE: +5.4% Premium; Short Interest Surging for The Local Shares

• Italian savings shares (azioni di risparmio) are non-voting stocks offering higher dividend yields. They prioritize income over governance influence, appealing to investors who prefer steady returns over company decision-making power.
• Ordinary shares command higher prices due to voting rights and control, while preference shares are valued lower. In Italy, control is highly valued, thus a significant premium for ordinary shares.
• Following mandatory conversions, the two remaining  tradable situations are Danieli (whose mandatory October 2020 conversion seems postponed) and Telecom Italia, trading at a premium awaiting dividends in arrears.

• CE Info Systems (MapmyIndia) (1052633Z IN) is one of the leading Indian players engaged in advanced digital maps, geospatial software and location-based IoT technologies. It launched its IPO in 2021
• Since its IPO, MAPPLS has embarked on a growth journey since then. It also boasts high margins & ROCE due to its asset light model.
• While the balance sheet looks good, one might have to check on the speedy receivables and trend of commission expenses.

• China announced game approval for the September batch. The number of games approved remained at a higher level than 2023.
• The pace of China game approval appears to have accelerated to the same level as pre-tightening.
• Of the companies that we are monitoring, Tencent and Kingsoft got one approval each.

• Samsara is focused on monitoring and optimizing operations through its technology
• Strong revenue growth and market potential attract investors
• Becoming the “system of record” for operational intelligence could lead to increased customer retention and expansion opportunities

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.

• Tier 2 foundry revenue recovery is taking far longer than most expected. 
• Globalfoundries 2024 CapEx is less than one tenth of what SMIC is spending. Even Hua Hong is spending more. This makes investors nervous.
• Globalfoundries CapEx strategy is a pragmatic one and will pay dividends in the years to come

• Intel’s EUR10 billion semiconductor plant in Germany faces delays due to budget battles over chips and batteries, impacting the nation’s technology sector and economic growth.
• Taiwan’s luxury car market growth reflects its prosperous economy, while the country continues to prioritize a nuclear-free energy agenda despite increasing energy needs.
• AI is revolutionizing nuclear energy production, enhancing efficiency and safety, leading to innovative developments in the industry and heightened global interest. StarLux Airlines is boosting Taiwan’s role as a transit hub in Asia amidst evolving global dynamics.

Nano Dimension has agreed to acquire Markforged, a specialist in additive manufacturing (AM) for metal and advanced composites, for cash of $115m. The deal requires regulatory and Markforged shareholder approval, which, if granted, should allow the deal to close by the end of Q125. The combination of Nano Dimension, Desktop Metal (acquisition process underway) and Markforged had pro forma revenue of $340m in FY23. This deal further broadens the product portfolio with the addition of a new printing technology, strengthens Nano Dimension’s position in metal AM and provides greater scale, which should support the path to profitability for the combined group.

• On the 19th of September, KKR amended the terms and Scheme/Structure of its Tender Offer for Fuji Soft Inc (9749 JP). I thought the new terms coercive. 
• On the 26th, FujiSoft decided there had been no change detrimental to general shareholders. On the 27th, KKR amended the Tender Offer Registration Statement to reflect FSI’s revised Opinion.
• That means Bain needs to change FSI’s mind or come out with a big number before the end of the First Tender, leaving lots of stock for Round Two.

• Today is the last trading day in the review period for the October rebalance of the FnGuide Semiconductor Top10 Index.
• Wonik Ips (240810 KS) is a high probability add and ISC Co Ltd (095340 KS) is a high probability delete. This will reverse the changes from the April rebalance.
• Passive trackers will need to buy over 3.5x ADV in Wonik Ips (240810 KS) and sell nearly 2x ADV in ISC Co Ltd (095340 KS). 

• China’s central bank cuts rates and unveils new measures to combat economic slowdown, creating a more relaxed monetary policy environment to stimulate consumption and investment.
• Silergy’s Automotive segment remains a driving force, especially with the addition of the Electric Vehicle ( EV) market.
• While Silergy faced demand insufficiency previously, it has indicated that the end demand is expected to revive by the end of 2024 from the 4th quarter.

• I tally 39 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Two new deals discussed on Smartkarma this week: Xingda International (1899 HK) and NSL Ltd (NSL SP). Sun Art Retail (6808 HK) also susppended due to the Takeovers Code.
• Key updates took place on: Dyna Mac Holdings (DMHL SP), Platinum Asset Management (PTM AU), Fuji Soft (9749 JP), JTower (4485 JP), Arvida (ARV NZ), and Korea Zinc (010130 KS).

• In this insight, we briefly study forensics of Esds Software Solution (1603279D IN) , currently unlisted, had tried to float an IPO back in 2021 but it was later withdrawn.
• The company offers managed cloud service and end to end multi-cloud requirements provider. Revenue growth has been moderate while margin erosion has been a concerning issue for the company.
• Key forensic takeaways include nature of contingent liabilities, inability to generate cash and liquidity woes, quality of receivables, etc. 

• The T50 index represents the top 50 largest stocks by market capitalization in the Taiwan Stock Exchange (TWSE). The T100 index represents the next 100 largest names (51-150 ranks).
• In this insight, we take a look at the potential ADDs and DELs for the December 2024 index rebal event.
• Currently, we see one change for T50 and one change for T100 but there are two more months to the base date and our expectations can change until then.

• Analyzing Appian Corporation’s Second Quarter 2024 financial results reveals a company actively balancing growth ambitions with operational efficiencies.
• The financial performance of Appian Corporation this quarter exhibits significant adherence to its core growth strategies while maintaining a prudent eye towards profitability.
• For the quarter, Appian reported a robust year-over-year revenue increase, with total revenue rising 15% to $146.5 million.

• BlackBerry, a software company specializing in security software and services, recently discussed its financial results for the first quarter of fiscal year 2025.
• The company remains committed to its strategy, focusing on enhancing its Internet of Things (IoT) and cybersecurity divisions and driving cost efficiencies.
• Despite facing industry headwinds and the challenge of elongated sales cycles, BlackBerry’s performance this quarter reflects a robust operational momentum and strategic execution.

• PowerSchool has reported its first quarter 2024 earnings with positive results, continuing its momentum with a strong performance across key financial metrics.
• The company reported a total revenue of $185 million, marking a 16% year-over-year increase.
• This was driven predominantly by subscription and support revenues, which grew 18% year-over-year to $167 million and constituted 90% of the total revenue.

• Warner Bros. Discovery recently held its Q2 earnings call for 2024, an event of crucial importance for investors and industry observers alike.
• The call encapsulated various dimensions of the business’s performance and strategic direction, touching on both high-performing areas and ongoing challenges.
• A primary highlight from the call was the robust performance of Warner Bros. Discovery’s direct-to-consumer (DTC) segment, notably in the streaming realm.

• Q424 revenue $7.8 billion which was $200 million above the guided midpoint, up 14% QoQ and up 93% YoY.
• Q125 revenue of $8.7 billion with gross margin 39.5%. This will be the company’s highest ever quarterly revenue
• On track for ~20% share of a $25 billion HBM market in 2025

• Just two weeks ago, I wrote about how I thought this was a mid-memory cycle.
• I mainly supported the memory companies if you didn’t read between the lines (ChatGPT o1 (Strawberry) and Memory)
• Fast-forward a week, and it seems that the calls for the end of memory were a bit premature.

• American Express Business Gold Card offers flexible spending capacity and annual statement credits
• Good news on chip production in the US with TSMC’s new fab in Arizona
• Discussion on the design, success, and failure of industrial policy with guest Vivek Chibber

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

The Asia Trade Book for September 2024 includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds across Asia HY and crossover credits.

Please reach out to our analysts to discuss any of these ideas, or other trade recommendations from our Asia coverage.

The Europe HY Trade Book for September 2024 includes current trade recommendations drawn from our European HY coverage universe, along with relative-value scatter plots and tables by industry.

In our latest Asia Monthly, we discuss the performance of major Asian credit indices and review UST curve movements in August 2024. We also provide a recap of major news and macroeconomic releases, including those from the US, China, India, Indonesia and Japan.

In addition, we summarise the Top/Bottom performers, recent USD bond issuances and rating actions in Asian corporate credit, as well as a list of our recent research. The Asia Monthly publication serves to keep investors updated on developments in the Asian corporate USD bond market.

• TSMC and government cyber security measures are discussed at Security Summit, highlighting the importance of protecting sensitive data.
• Experts advise diligence and patience for Taiwan’s B5G satellite program as it encounters obstacles, emphasizing the need for strategic planning.
• Japan’s diamond semiconductor technology expected to be applied practically by 2025-2030, showing promising advancements in semiconductor industry.

• ARLO continues to operate within an industry that is highly price sensitive and dependent on the consumer signing up for paid service. 
• We are lowering our third quarter hardware revenue to reflect the lower pricing environment. ARLO is not a hardware story. The Company placing hardware units leads to paid service subscribers.
• ARLO’s stock has been under pressure since reporting second quarter results most likely to do with concerns over actual number of quarterly retail subscriber adds

• PagSeguro Digital, in its Q2 2024 earnings report, presented a robust financial and operational performance, marking significant growth across various metrics.
• The company reported a substantial 19% year-over-year increase in total revenue, achieving BRL 4.6 billion, supported by strong Total Payment Volume (TPV) growth across all client segments.
• Notably, net income on both GAAP and non-GAAP bases achieved new highs, with a 31% year-on-year increase, reaching BRL 542 million.

• AsiaFIN Holdings Corp. (OTCQB : ASFH) – aggressive growth inflection point.
• ASFH provides IP protected fintech solutions to ASEAN based financial institutions / corporates – ASFH delivers Robotic Process Automation (RPA) using Intelligent Character Recognition (ICR); Regulatory Technology (RegTech); AI driven cheque processing and; ESG reporting services.
• ASFH has an organic and aggressive acquisition growth plan to expand both within ASEAN and in new westward territories.

• On 8 August, KKR and Fuji Soft Inc (9749 JP) announced a Tender Offer for the company. It was, at the time, an intention to do so. KKR needed approvals.
• Fuji Soft had KKR terms, and timing, and approved them. KKR then changed the terms and timing. Now on the 19th, they changed the terms again. 
• This puts Fuji Soft in a kind of quandary. It’s important to think about why and what that leads to.

• The Fuji Soft Inc (9749 JP) Board has recommended KKR’s first tender offer (JPY8,800). The Board will announce its view on the second tender offer on launch. 
• The Board sounded out Bain’s progress on a binding proposal and 3D and Farallon’s on their irrevocable. The absence of a Bain binding proposal immensely helped the Board’s decision.
• Bain has likely left it too late. With a higher offer, Bain could force a recommendation change and hope KKR is shamed into cancelling 3D and Farallon’s irrevocable. 

• Monolithic Power Systems (MPWR US) is a direct addition followed by AppLovin (APP US) which is a conditional addition but close to be direct. Demand is ~$1.8bn and ~3.5 ADV.
• Dollar Tree Inc (DLTR US) is a direct deletion with the highest exclusion probability as it is  ranked above the exit rank of 125. 
• Super Micro Computer (SMCI US) , ARM Holdings (ARM US) and Moderna (MRNA US) are amongst the prioritized constituents preventing eligible candidates from entering the index. 

• Intel is spinning off their foundry division into its own entity within the company, with financial independence and guardrails in place.
• The company is not selling off assets as a whole but is making strategic deals, such as a partnership with Amazon.
• A letter from Intel’s CEO to the team hints at potential activist investor issues and the company’s legal obligations in response to potential acquisition offers.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• In this insight, we take a look at the potential index changes for ASX200, 100, 50, and 20 in the run-up to the December 2024 index rebal event.
• We currently do not see any index changes for ASX 20 and ASX 100.
• We see one change for ASX 100 and two changes for ASX 200 but the final result could depend on relative share price movements for the next two months.

• In this insight, we take a look at the potential ADDs and DELs for the F100 and F250 indices during the December 2024 index rebal event.
• We see up to seven M&A-related intra-review changes in the run up to the December 2024 review.
• Our latest estimates suggest there could be one change for the F250 index during the December 2024 rebalance. We do not currently see any changes for the F100.

• iPhone 16 sales disappoint, LGD faces market obstacles, while Huawei enhances AI quality control in smart medicine.
• Reduce defense emissions to combat climate change, safeguarding national security amid declining EV demand and weakening investments in European battery makers.
• Thailand to establish first SiC facility by 2027, Taiwan introduces closed-loop lithium battery recycling system, boosts semiconductor innovation with US$9.3 billion initiative to stay competitive in the industry. US bans Chinese automotive tech.

• The Western Union Company demonstrated progress in its second quarter of 2024 financial results, echoing its commitment to its Evolve 2025 strategy aimed at propelling the company towards competitive market positioning.
• Led by CEO, Devin McGranahan and CFO, Matt Cagwin, the earnings presentation outlined key financial metrics and strategic initiatives that mark both strengths and areas of concern.
• 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.

• Badger Meter Inc.’s second quarter earnings of 2024 reflected a robust performance.
• The company exceeded expectations, reporting quarterly revenues of $217 million, which marks a 23% year-over-year increase.
• This milestone was primarily driven by strong market demand and the efficient conversion of backlogs, which was slightly above anticipated levels.

• Advanced Energy’s second quarter of 2024 earnings report depicted a complex but progressive landscape for the company.
• The earnings call, led by key executives including President and CEO Steve Kelley and Executive Vice President and CFO Paul Oldham, detailed aspects of financial performance, strategic initiatives, market- specific dynamics, and forward-looking expectations with a clear resonance on the ongoing and future strategies meant to streamline operations and leverage market opportunities.
• Revenue for the quarter stood at $365 million, an 11% increase sequentially, exceeding the company’s guidance.

• Memory stocks underperformed the market, falling sharply with the recent overall market rout and failing to rebound sufficiently with the latest market rally.
• Leading Memory names Micron, SK Hynix, Samsung are all substantially below their 52-week highs after market reports of slowing memory demand from PC and mobile industries and inventory liquidation.
• Taiwan names Nanya Tech, Silicon Motion, Phison are all we below their highs. Micron results on September 25th MT will provide a major outlook update for the market.

• Micron’s latest results show a clear improvement in the Memory cycle. The company’s gross margin increased and guided for a further strong margin increase next quarter.
• Micron increased its overall DRAM industry growth forecast while maintaining its NAND flash forecast. Micron reiterated expectations for FY2025E to deliver record revenue for the company, with improving profitability.
• Positive news for fallen Memory industry shares — Within our Memory universe we have Structural Long ratings for Micron Technology (MU US), SK Hynix (000660 KS), and Silicon Motion Technology (SIMO US).

• Given UMC’s partnership with Intel to produce chips using Intel’s 12nm fab capacity, we believe latest Intel developments increase the opportunity for Intel Foundry to take a stake in UMC.
• Intel’s Foundry business makes a strong partner for UMC who has deep foundry experience and talent, but doesn’t have leading edge fabs nor the balance sheet to build them.
• If Intel Foundry Services spins out or Intel strengthens its balance sheet through a deal with Qualcomm/Apollo, the potential for a deeper UMC-Intel Foundry partnership becomes even more compelling.

• Aug 2024 Notebook shipments on track for delivery with tracking information soon. Apple MR device facing possible upgrade to 1,500 PPI OLED display.
• Automotive CIS tech set to advance by 2024. Taiwan offers permanent residence to address talent shortage in AI industry.
• UK showcases compound semiconductor strength and collaboration with Taiwan. Henkel expands semiconductor focus in India for market growth.

Alongside its H124 results, Esker confirmed that Bridgepoint, in association with General Atlantic and management shareholders, is proposing a cash public tender offer for the company at €262 per share. This represents a 30% premium to the unaffected share price on 8 August. The supervisory board has welcomed the principle of the offer. If the tender offer is successful (ie 60% or more of shares are tendered), the deal is expected to complete in late Q424 or early Q125.

• Korea Exchange announced the long awaited Korea Value Up Index (“K Value Up Index”) (composed of 100 stocks) today. 
• Korea Exchange used a 5-step screening process to select the 100 companies in this index including market cap, profitability, shareholder returns, market evaluation, and capital efficiency. 
• This Value Up index is part of the bigger “Corporate Value Up ” program in Korea. These efforts to improve Korea’s corporate governance policies is a marathon, not a sprint. 

• Significant peer price performance declines leaves IPO valuation stretched, the desired discount multiple to attract interest has suddenly become a premium
• Investor interest in memory semiconductors, AI derivative stocks has cooled
• Peer price sell-offs are extreme but could quickly change, reflecting the highly cyclical nature of the sector

• Average EM fund weights and active fund ownership hits record highs in TSMC
• However, investor caution is starting to surface, with 13.4% of funds shifting to underweight  in the last six months, driving the net underweight to a 15-year low of -1.21%.
• Net outflows of $3 billion over the past six months, led by Invesco, JP Morgan, and MFS, and with four times more sellers than buyers.

• On the 26 August, Goh Peng Ooi, founder and executive chair, made a voluntary unconditional general Offer for the 25.9% in Silverlake Axis (SILV SP) not held.
• The Offer Doc for this S$0.36/share cash Offer was dispatched on the 26th August.  The Circular is also now out, which incorporates the IFA opinion.
• Trading through terms. The first close is the 7th October. I don’t expect a bump, and the share price gradually retraces back to cash terms.

• Via Technologies (2388 TT) is looking to raise US$212m in its global depository receipts (GDRs) offering. Proceeds will be used to purchase overseas raw materials, and to replenish working capital.
• Similar to previous GDR listings, the deal has had a long drawn out approval process. Thus, the deal is a very well flagged one.
• The deal is a relatively small one to digest at 5.8 days of the stock’s three month ADV.

• Zozo-Owned Yutori has just acquired a womenswear brand and plans a series of acquisitions, with ambitions to become the Zozo of the younger generation.
• So far, it has grown very fast on the back of strong support from Japan’s youth looking for street fashion but this latest move will reach into new segments.
• Unlike Zozo, Yutori is investing in a chain of stores which have helped push awareness and sales and is the right strategy for Japan’s store-addicted consumers.

• Enfusion reported its second quarter 2024 earnings with results aligning closely with the company’s prior guidance and consistent performance expectations in the medium term.
• The company posted $49.5 million in revenue, marking a 16% year-over-year growth.
• The adjusted EBITDA came in at $10.1 million, translating to a 20.5% margin.

• Lenovo commits $1B to AI advancements, strengthens F1 collaboration, showcasing innovation in technology sector.
• Garmin experiences growth in SEA sales for smart wearables, indicating a maturing market and strong consumer demand.
• Taiwan’s Transcom gains from global surge in military spending, develops world’s first open-source 6G core network, while Stellantis partners Maserati with China’s Chery amidst struggles in German automotive industry.

Boku reported 24% y-o-y revenue growth in H124, with both digital wallet/account-to-account (A2A) payments and direct carrier billing (DCB) payments growing at double-digit rates. Adjusted EBITDA grew 18% y-o-y with a margin of 30.1%. With ambitions to become the best localised payment partner for global commerce, Boku continues to invest in enhancing its product portfolio and strengthening its compliance and treasury functions. A pipeline of new digital wallet/A2A launches for major merchants and seasonal factors support continued strong growth in H224 and 2025. With FY24 outlook maintained, our revenue and adjusted EBITDA forecasts are unchanged.

• Genpact Limited’s Q2 2024 earnings report and conference call, led by CEO BK Kalra and CFO Michael Weiner, offered insights into the company’s performance and strategy, presenting a mixed outlook with both notable strengths and areas for improvement.
• Genpact reported Q2 revenue of $1.18 billion, reflecting a 6% year-over-year increase, surpassing their guidance.
• This growth was driven by strong performance across Data-Tech-AI and digital operations.

• Every year it’s the same trade. This year it is Thursday and Friday. There is some funkiness to Monday too.
• There is meaningful directional buying on one day, which then kind of gets stretched a bit. This year, circumstances suggest high confidence buying should be at the top end.
• This year, because circumstances, I expect the trade is a lot larger than last year. I’d say ¥1.6trln. 

• Rightmove PLC (RMV LN), UK’s largest real estate portal, has twice rejected REA Group Ltd (REA AU) cash/scrip non-binding Offers this month.
• REA has upped terms to 341 pence + 0.0422 new REA shares per Rightmove share, or 770p/share, a 39% premium. If completed, Rightmove’s shareholders would own ~20.1% of the MergeCo.
• Thrice rejected? I think Rightmove should engage. REA also has until the 30th September to make a formal Offer. Or walk away.

• The new 100% mandatory tender offer rule could push buyers to lower premiums for major shareholders, potentially increasing hostile takeover attempts as costs get shared with minority shareholders.
• It looks like MBK is eyeing this situation as a chance to redefine their strategy. This really shows how serious MBK is about the Korea Zinc deal.
• Watch for top-tier assets available via hostile takeovers, particularly companies like SK Inc and Lotte Corp, where low shareholder stakes may lead to management conflicts.

• Sino American Silicon Products (5483 TT) is looking to raise US$287m in its GDRs offering. Proceeds will be used to purchase overseas raw materials, repay bank loans and purchase machinery.
• Similar to previous GDR listings, the deal has had a long drawn out approval process. Thus, the deal is a very well flagged one.
• The deal is a relatively large one to digest at 15.7 days of the stock’s three month ADV.

• The conglomerate sector continues to show momentum in Hong Kong while the materials and energy sectors lag
• Weibo (9898 HK)Weibo Corp (WB US) was rated a BUY as valuations and potential catalysts from parent Alibaba Group Holding (9988 HK) could support a higher stock price.
• China East Education (667 HK) was upgraded to BUY with higher higher price target due to profit increase. Dongfang Electric (1072 HK) was initiated with a BUY with strong upside.

• The Board of Rightmove PLC (RMV LN) will consider REA Group Ltd (REA AU)‘s third proposal (implied value of 770p/share, 39% premium, 20.4x EV/NTM EBITDA, 28x Fwd P/E).
• Using 21.3x NTM EBITDA (comps) would indicate fair value of 805p, 4.5% increase to  current offer, implying 29.3x P/E, although proforma leverage would increase to 3.6x.
• REA has not stated that the offer is final. Rightmove investors and Board may require further persuasion, as the implied probability of deal success is just 58%.

• The semiconductor industry is buzzing with news that Qualcomm, the world leader in smartphone chipsets and wireless technology patents, has approached Intel about a potential acquisition.
• The Wall Street Journal recently reported on this development, signaling Qualcomm’s ambition to expand beyond its mobile chipset dominance and deepen its reach into the PC and server markets.
• While the deal remains uncertain and could face significant regulatory hurdles, this move could be transformative for Qualcomm.

• Taiwan’s energy policy is challenged by EU pressure on localizing offshore wind, hindering progress in renewable energy development.
• Recycling technology is repurposing electronic waste components like substrates and circuit boards, reducing environmental impact and promoting sustainability.
• Google implements DataGemma to improve accuracy in their hallucination-proofing LLM system, using Data Commons for enhanced performance.

• Maximus, a global leader known for managing government programs, recently delivered robust financial results for its fiscal 2024 third quarter.
• The company showed notable organic growth and revenue expansion across its diversified segments, with total revenue reaching $1.31 billion, marking a 10.6% year-over-year increase.
• This growth was driven mainly by the U.S. Federal Services segment, which achieved a significant 17.0% revenue increase primarily through expanded clinical programs.

• ExlService Holdings, Inc. has delivered a robust performance in the second quarter of 2024, continuing its upward trajectory in the data and artificial intelligence (AI) sectors, an area where the company has been increasingly focusing its resources.
• The company reported a revenue of $448 million, marking an 11% increase year-over-year, and an adjusted earnings per share (EPS) rise of 11% to $0.40.
• This growth was predominantly propelled by high demand in its Analytics and Digital Operations & Solutions segments.

• We anticipate that the upcoming 4Q24 will likely see a ~10% quarter-over-quarter (QoQ) upside.
• Among TSMC’s top clients are companies from the US, Taiwan, and Japan.
• Recently, we have heard that TSMC is reducing wafer quotations by about ~10% for 28nm and below, in order to adapt to the current environment.

• PKSHA is an AI company. It was before this year, and got a boost this past spring. The stock price rose 60% in two weeks in February and March 2024.
• Then it fell more than 50%. Back to late 2023 levels. High growth, growing into its valuations. Now moving to TSE Prime this week, TOPIX next month. 
• Impact in days of ADV is lower than impact in Real World Float metrics. There are lots of day-traders. This probably has legs.

• SAMR would draw out review process for too long for a deal to be approved
• Intel faces an existential crisis and even the new Foundry division has issues
• A theoretical deal would have little financial synergy and destroy Qualcomm’s gross margins

• 12 days ago, Janaghan Jeyakumar, CFA published his September version of TOPIX Inclusions: Who Is Ready (September 2024). His chosen name was CELSYS (3663 JP), a long-time TSE-Prime inclusion bet. 
• This week on the 18th, they announced they were going to enter TSE Prime on 25 September. This was a somewhat well-known known. They were interested and had been. 
• The stock popped 15% the next day. It’s a small cap, but there is a lot of float.

• The outlook for 4Q24 appears somewhat bearish at the moment, though it has not been fully defined before the end of October.
• Taiwanese companies such as MediaTek Inc (2454 TT), Novatek Microelectronics Corp (3034 TT) and Realtek Semiconductor (2379 TT) continue to be the main drivers of demand for UMC.
• On a positive note, there are warnings against overly relying on chips from Chinese manufacturers due to US sanctions.

• SMIC’s revenue might be looking at around US$2bn in 4Q24 and it’s a bit reduction of GM from 3Q24 because of the seasonality at the year end.
• Since around 2019, US was putting an sanction on China, no matter how the argument is true.
• SMIC continued delivering 7nm chips, and even the 5nm chips could be further delivered using a similar method, although the yield rate may be a concern.

• Qualcomm Eyes Bold, Friendly Intel Acquisition Amid Intel’s Existential Crisis
• Global Semi Sales Strength Continues In July. How Long Can It Last? 
• Asustek Soars, Uniquely Making Fresh 52-Week Highs Within PC Makers

• Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
• Sea (SE US) owned Shopee has partnered with YouTube to drive GMV growth and resist  competition with TikTok, which has strengthened its regional presence through its stake in Tokopedia,
• India’s strong shopping appetite was reflected in robust gold purchases in August and high demand for the iPhone 16 launched last week.

• Declining customer retention rate indicates that a slowdown in future revenue growth seems inevitable. If revenue growth stagnates, it means Taimei’s business model hasn’t been fully validated by the market.
• Taimei’s IPO on SSE STAR Market was rejected. This means regulatory authorities don’t recognize Taimei’s core technology/performance prospects. Taimei has to take a step back and list on the HKEX.
• Post-Investment valuation reached RMB8.1 billion after Series F financing. However, considering the continuous decline in valuation of its peers, we are concerned about Taimei’s future stock price performance after IPO.

• Apple (AAPL US) will initially use Novatek’s DDIC (Display Driver IC) for the iPhone 16, but it will soon being replaced largely.
• In 4Q24, there is a possibility of experiencing a decline, with a potential quarter-over-quarter decrease of approximately 5-10%.
• The Chinese panel market continues to be a key battleground, and Novatek must navigate these challenges to remain competitive.