TMT/Internet

• Today, with Q1 earnings, which I found less than great, KDDI Corp (9433 JP) announced a Tender Offer Buyback to repurchase up to 64,102,500 shares for up to ¥250.03175bn.
• The Tender Offer – at ¥3900/share vs Last at ¥4,271/share (designed for cross-holding unwinds) – goes from 31-July through 28-August. It fills the 83.3% of the buyback programme announced 11-May.
• Toyota Motor (7203 JP) has announced it would sell ¥250bn of shares into this Tender Offer. This is less interesting than it looks. The whole thing is.

• The review period for the September rebalance ends today. The changes could be announced on 25 August with the implementation taking place after the close on 8 September.
• The upcoming launch of the STAR100 Index could result in the index committee continuing to use a 6-month minimum listing history resulting in two changes to the index.
• One way turnover is estimated at 2.3% resulting in a one-way trade of CNY 2,658m. The impact on the deletions will be much larger than that on the inclusions.

• Intel’s latest results imply a potential bottoming of its business & nascent turn-around; however the greater take-away is that the PC industry is heading into a major AI-driven up-cycle.
• PC industry inventories are now “healthy” and Intel’s Client Computing segment (PCs) showed the strongest QoQ revenue growth. Management is guiding for continued improvement next quarter.
• Edge AI will drive a major upgrade cycle for PCs worldwide and Intel’s new Meteor Lake chip could be a catalyst. Invest ahead of AI PCs having their “ChatGPT Moment”.

• TSMC’s premium is trading at a historically high level after its recent results release, while ADR short interest has remained subdued.
• ASE’s ADR premium is at one of its highest levels in history, appears precarious in our view.
• ChipMOS premium near middle of range; the company will report results this week.

• Delta Thailand has surged 22% in NT$ terms since our last piece, while Delta Taiwan rose only 6%. We see two potential trades here.
• Delta Thailand reported its results on 27 July and beat expectations by 22%. Delta Taiwan will release its results on August 1st with its analyst call at 15:00 Taiwan time.
• 1) Potential Long Delta Taiwan event trade into Taiwan earnings 2) Long Delta Taiwan vs. Short Delta Thailand based on the relative prices reverting back to their end June ratio.

• Unisound AI Technology, a Beijing-based AI unicorn, filed to go public in Hong Kong. I used a diverse peer group of domestic AI companies to come up with IPO valuation. 
• From a peer group perspective, I arrived at an IPO valuation close to ~RMB12b (or ~$1.7B), using a ~15x EV/CY22 Revenue to my 2023 revenue estimate of RMB780m (+30% y/y).
• However, I believe SaaS valuation multiples may appear rich for the stock, keeping in mind non-recurring revenue and the high hardware cost in the total cost of sales and services.

• Cadence exceeded the revenue and earnings expectations of Wall Street for the second quarter of 2023, resulting in year-over-year 14% revenue growth and 19% non-GAAP EPS growth.
• In terms of Generative AI, the customers of Cadence are adopting its chip, Generative AI portfolio, system, board, and package as they are achieving exceptional productivity benefits and quality results with these solutions.
• We give Cadence Design Systems a ‘Hold’ rating with a revised target price.

• We visited Micron’s advanced A3 semiconductor fab in Taichung, Taiwan last Friday. Micron is committed to expanding leading edge capacity in Taiwan.
• Memory names rallied sharply at the end of last week after SK Hynix affirmed that 1Q23 was the cycle bottom and AI-driven DRAM demand was accelerating its recovery.
• We reiterate our Nanya Long trade and believe it can now run further given improving industry signals. Nanya presents pure-play exposure to a DRAM turn-around accelerated by AI demand.

• ServiceNow managed to exceed the revenue and earnings expectations of Wall Street.
• It beat expectations for every key performance metric.
• Also, it has introduced an innovative ServiceNow AI Lighthouse customer program along with Accenture and NVIDIA.

• Meta Platforms managed to exceed analyst expectations in terms of revenue as well as earnings.
• On Facebook, engagement trends have been stronger than the company’s management anticipated.
• We give Meta Platforms a ‘Hold’ rating with a revised target price.

• SK Hynix’s Q2’23 revenue increased ~50% QoQ with bit shipment growth of ~35% for DRAM, ~50% for NAND
• AI-Driven demand for DDR5 & HBM pushed DRAM QoQ ASP growth into positive territory for the first time in 9 months. 
• But it’s still stormy weather ahead as mainstream DRAM, along with NAND ASPs continue their downward slide

• NTT (9432 JP) will likely buy back more shares than previously expected as the government sells shares down. Buy dips vs peers KDDI and Softbank Corp. This is a long-term tilt.
• There are some doubts over the fate of Delta Electronics Thai (DELTA TB)‘s SET50 membership, at present, but it should escape deletion in December 2023. 
• Don’t punt Fortescue Metals (FMG AU) on the off-chance of a change of control in the wake pf the Forrest split. If anything, there might be a leakage of shares.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• In the IPO space, the coming week will see Cinema XXI listing.
• Given that we are in the middle of earnings season, there were no new placements this week.

• Global Fund exposure in NVIDIA Corp (NVDA US) has moved to record levels after a doubling of the share price this year.
• New positions from UniNachhaltig Global, JP Morgan Global Focus  and BNY Mellon Global Equity (3.36%) were among a total of 14 funds who opened exposure to NVIDIA Corp in 2023.
• Growth and Aggressive Growth funds are at maximum levels of ownership, whilst Value managers are showing some hesitancy here.

• The SoftBank share price rally is, in our view, based on optimism around the Arm IPO, the Yen’s relative weakness and recovering share prices of public companies in the portfolio
• Nvidia’s emergence as a potential anchor investor in the Arm IPO has boosted SoftBank shares, yet there is still a big disparity between groups in terms of Arm’s potential valuation
• Aside from a recovery in public tech companies’ shares, Yen weakness has supported SoftBank’s asset values; monetary policy moves now indicate the prospect of a stronger Yen versus the USD

• UK Fund exposure in Softcat PLC has reached new highs.  The percentage of UK funds invested in Softcat now stands at a record 17.3% with average holding weights of 0.21%
• Softcat PLC moves to the 5th most widely held Technology stock in the UK, sharing similar ownership characteristics to Spirent Communications, Halma PLC and Oxford Instruments.
• With Softcat approaching the boundaries of FTSE 100 inclusion, it’s not hard to envisage investment levels moving higher from here.

SK Hynix has reported weak Q2/23 results as expected. While the Q2 results registered a recovery on account of an improvement in the memory semiconductor market, the recovery was from a very low base in Q1. Performance remained abysmal compared to last year, with revenue falling by half y-o-y and EBITDA plunging 92%. The financial risk profile continued to be very weak, with large negative FCF, fast-increasing debt and soft earnings.

We believe there is a high level of optimism in AI-related companies, including SK Hynix. Despite the weak results (with some signs of recovery from a low base), the company’s share price surged yesterday.

We maintain our forecasts. Considering the industry downturn, we expect FY 2023 EBITDA to decline c. 80-85% y-o-y, with significantly negative FCF. Moreover, debt should spike c. 50% to cover the negative FCF and fund the USD 2 bn payment for Solidigm. This will likely bring Debt/EBITDA to stressed levels (e.g. 7-8x) at year-end. That said, we expect improvement from FY 2024, on the back of an industry recovery.

We see a high likelihood of downgrades by the agencies in the next 1.5 years. SK Hynix is rated Baa2 (negative)/BBB- (negative)/BBB (stable) by Moody’s/S&P/Fitch. We expect the company to hit the negative rating triggers, given the industry decline and debt-funded acquisition of Solidigm.

• Impinj warned revenue would decline sequentially in the third quarter due to weaker than expected demand from retail apparel customers. The shortfall started  towards the end of the second quarter
• Impinj increased inventory in the first quarter and more so in the second quarter. Inventory within the channel has also increased compared to the first quarter
• Impinj’s stock continues to price the downward revenue scenario as a short-term event. Previous downturns have lasted more than one quarter

• SAP delivered a mixed set of results in its most recent result with revenues above Wall Street expectations but below-par earnings.
• RISE with SAP and GROW with SAP have been well-received offerings, driving significant cross and upsell opportunities across their portfolio.
• SAP’s approach with SAP Business AI is unmatched in the industry, delivering relevant, reliable, and responsible AI solutions to customers, with plans to introduce new premium RISE offerings and an uplift of up to 30% in the fall.

• Taiwan Semiconductor managed to exceed analyst expectations in terms of revenue as well as earnings.
• Despite the cyclical downturn, the company continued investing in R&D to support the development of its N3 and N2 technologies.
• We give Taiwan Semiconductor Manufacturing a ‘Hold’ rating with a revised target price.

• Texas Instruments delivered a positive result and managed an all-around beat last quarter.
• The decline in gross profit from the prior year was principally brought on by reduced revenue, higher capital expenses, and the shifting of LFAB-related costs to the cost of revenue.
• For the third quarter, Texas Instruments’ team anticipated the sale to be in the $4.36 billion to $4.74 billion range, with $1.68 to $1.92 earnings per share.

• Visa managed to exceed analyst expectations in terms of revenue as well as earnings.
• The quarterly payments volume in the U.S. increased mostly due to a slower inflation rate.
• With the introduction of Visa Business Credit for their 28 million client base, PagSeguro, a significant Brazilian fintech client, will expand in the commercial area.

• Microsoft delivered an all-around beat in the most recent quarterly result.
• Microsoft Cloud reached $110 billion in yearly revenue, with Azure accounting for more than 50% of the total.
• Customers are moving their current workloads to Azure and investing in new workloads, causing Azure to gain market share.

• On 27 July, SK Telecom announced a sizeable share buyback worth 300 billion won (including shares cancellation of 200 billion won) and quarterly dividend of 181 billion won. 
• SK Telecom will pay a quarterly DPS of 830 won, which represents 1.8% of its current price of 45,900 won. 
• SK Telecom is trying to boost its share price which has been negatively impacted by the regulators’ pressure to cut telecom tariff rates and also increase competition. 

• The chances of SKT’s inclusion in the August MSCI Review seem slim. SKT narrowly missed meeting the 15% threshold on both Day 1 and Day 2 during this review.
• SK Telecom’s buyback completion can be accelerated to align with the MSCI November Review period, just like the previous case of KT Corp back in April.
• The estimated size of passive funds flowing into SKT is approximately ₩160 billion, which is expected to be around 5.5 times the average daily trading volume (ADTV).

• We expect Shopee’s competitive landscape deteriorated in 2Q23, due to increased pressure from TikTok/Lazada in ASEAN, Coupang in Taiwan, and Shein in Brazil. Temu is a large swing factor.
• Shopee has been pushing live streaming and its full-management (or consignment) mode. In our view, these will drag down its profit margins and may not be effective in gaining share.
• We estimate 2Q23 revenue and non-GAAP net income are 2.5% and (24%) vs cons. We have revised down Shopee’s growth expectations for the next 3 years.

• Google, Microsoft, and Facebook reported earnings.
• Let’s discuss their capex plans and what that means for our new data center champion, Nvidia.
• I think it’s pretty straightforward that Nvidia has revenue beats for the foreseeable future.

• Elon Musk has killed Twitter’s last and greatest value by renaming it X. As in, fill in whatever the heck it is now. 
• Twitter’s strong, globally recognized brand worth had been worth much as $20 billion—its last and only valuable asset.
• Incredibly, it gets worse. Hundreds of other companies already own rights to the X name and logo—including META and Microsoft. 

• LGES provided a lower sales guidance in 3Q 2023 due to slower sales in Europe. LGES expects its sales in 3Q 2023 to decline in a QoQ basis.
• The share prices of the top 12 rechargeable battery names in Korea are down on average 13.9% in the past two trading days.
• We believe that the overall sentiment on the rechargeable battery sector in Korea has started to turn sour which could have a further negative impact on companies such as LGES. 

• The board of SoftwareONE Holding (SWON SW) rejected on 24 July a revised CHF 19.50-20.50 offer from Bain Capital and said it began a strategic review to seek the best value.
• CHF 19.5 represents a 40% premium, Gross spread to the low point of the range is 4.2%. 0x EV/NTM EBITDA and 19.5 Fwd P/E.
• This could trigger upwards revisions and would justify the Board asking for a higher offer. I’d hold on to the shares as Bain Capital could increase the offer a bit.

The Asia HY Trade Book for July 2023 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 (ex-Japan) HY and crossover credits.

• Facebook exceeded 3 Bn MAU for the first time, and MAP is now approaching 4 Bn.
• DAU/MAU engagement looks steady across all regions.
• While ARPU exhibited considerable strength, please note the material weakness in YoY comparison.

• Verizon’s share price continues to fall amid speculations and low interest in slow-growth businesses.
• The business is stabilizing and on-track to deliver much needed top and bottom line growth, according to the company.
• No matter how you look at it, being bullish on Verizon Communications Inc. (NYSE:VZ) takes a real contrarian view with ability to endure pain and keep a long-term focus.

• Fadu’s IPO price has been confirmed at 31,000 won (top end of the IPO valuation range). A total of 1,082 institutions participated, with a demand ratio of 362.9 to 1.
• Fadu is one of the biggest IPOs in Korea so far in 2023. 
• Our base case valuation analysis suggests implied market cap of 2.2 trillion won or 43,676 won per share, which represents 41% higher than the IPO price.

• Tencent (700 HK) ’s online games business grew for the first time in 1Q2023 (+10.8% YoY) after four consecutive quarters of YoY decline followed by regulatory hurdles.
• Our app data analysis reveals that online games revenue would grow by about 12% YoY in 2Q2023E driven by increases in both domestic and international games revenues.
• On Monday, it was also reported that Tencent is in the process of acquiring a majority stake in Polish gaming studio Techland, expanding the long list of overseas gaming acquisitions.

• UMC reported 2Q23E results with revenue falling 20% YoY and EPS down 30% YoY. Results were higher than consensus but forward guidance was worrisome in our view.
• We are concerned by UMC’s high exposure to more mature technology nodes, limited exposure to AI, and vulnerability to China competition forced to focus on non-leading edge technology nodes.
• We rate the stock Underperform with a target price of $36 which implies a 2023E PER of 10x.

• Since 1H FY24/3 corresponds with the bottom of the current reset cycle, initial guidance for net sales is -9.3% YoY.
• In addition to ongoing high electricity rates, depreciation expense is set to increase +51.1% YoY, and initial guidance for OP is -62.3% YoY.
• On a cash flow basis, implied EBITDA is forecast to decline -29.1% YoY.

SenSen’s Q423 update shows robust quarter-on-quarter growth in cash receipts, broadly aligning with our full year revenue forecast. Lead indicators for FY24 are positive, highlighted by the recent signing of a A$1.4m three-year contract with a new Asian casino customer, as well as a strong contract pipeline. SenSen also launched several new solution variants in Q4, which could lead to high-margin upsell opportunities. The group has identified cost-cutting measures for H124, with the aim of becoming cash flow positive for the full year, which we have reflected in our updated forecasts.

• IRDM reported second quarter results showing continued growth in service revenue. Commentary related to direct to device and an increase in equipment revenue that drew the ire of investors
• IOT had a larger increase in the number of subscribers than we were expecting, resulting in service revenue remaining towards the higher end of the 9% to 11% growth forecast
• We believe IRDM is managing the business for the longer term and not for a specific quarter, which could contrast with investor expectations related to equipment inventory

• ASML delivered an all-around beat in the previous quarter.
• Looking ahead to the third quarter of 2023, ASML expects continued growth in net sales, driven by deep UV systems and non-EUV bookings.
• We give ASML Holding N.V. a ‘Hold’ rating with a revised target price.

• IBM delivered a mixed result in the recent quarter, with revenues below market expectations, but it managed to surpass the analyst consensus regarding earnings.
• The last quarter demonstrated strong execution of their hybrid cloud and AI strategy, with solid growth in their software and consulting segments.
• Additionally, their enterprise AI initiatives, including the Watsonx platform, show promising results with multiple use cases across various industries.

• Six weeks ago, LDP Policy Research Council chairman KAGIUDA led a discussion about full NTT privatisation to fund defence. Today he said serious deliberations begin in August. Shares fell today.
• The LDP wants non-tax resources to increase defence/social spending. Selling would require a change in NTT Law, but the argument is that communications have changed/internationalised.
• As discussed in NTT (9432 JP) – Would the Govt Sell All Its Shares? Why? How? How Long? Overhang?, there are questions on overhang. BUT… presumably there are mitigants. 

• Persistent fabless inventory issues dampen the slope of H2’23 recovery. FY’23 forecast further reduced to a 10% YoY decline
• AI-Related hardware will reach 6% of revenues in 2023, a welcome boost but insufficient to counter the negative impact of macro headwinds
• TSMC’s earnings provides an important read through on the likely results and outlook for the broader semi ecosystem in the coming weeks. 

• Lianlian DigiTech (2104619D CH), a digital payment services provider in China, has filed for an HKEx IPO to raise US$500 million, according to press reports.   
• Lianlian ranked first among the independent digital payment solution providers in China in terms of TPV in 2022, with a market share of 9.1%, according to Frost & Sullivan.   
• The key elements of the bull case rest on rising market share, doubling of active customers, resilient core business growth and rapidly growing additional revenue streams.

• In this insight, we take a look at the potential ADDs/DELs for Thailand’s SET50 index rebalance in December 2023.
• Delta Electronics Thai (DELTA TB) – one of the largest SET 50 members – has been in the Market Surveillance Measure list a couple of times already this year.
• Although this creates some doubts over the fate of DELTA’s SET50 membership, at present, I believe DELTA will escape deletion in December 2023. 

• Topline grew +9% FXN. While Google Services revenue growth was flat in 1Q’23, it was 5.5% YoY in 2Q’23, with growth re-accelerating in every component of Google Services.
• Despite cost optimization efforts by customers, Google Cloud maintained its momentum with ~28% YoY growth (same as it was in 1Q’23).
• So, on an apple-to-apple basis, Google Services margin would be slightly lower this quarter than reported (say, ~$500 Mn opex for Google Brain).

• Alphawave reported last week.

• The results were not good; they were great.

• I actually am excited to see Tony and the team execute like this. Bookings are growing, and while revenue has not come out yet, it seems very likely they will hit their 2023 revenue estimates.

• APLD released 4Q earnings last night. The stock performed well, +14%.
• The key highlight was the huge guidance. In this post I will run through how the numbers make no sense.

• Jamestown, North Dakota (JT) – 100MW – JT has been operating since 2022. It has ~100MW of capacity and has been running at full capacity over the past two quarters, according to comments made on the company’s 3Q and 4Q earnings calls. Here is a snip for the 3Q call.

• 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 this note, we will talk about the not so positive aspects of the deal.

• Robosense Technology (ROBO HK) (RT) is looking to raise around US$400m (estimated) in its upcoming Hong Kong IPO. 
• As of Mar 23, it had earned design wins for mass production of LiDAR for 52 vehicles with 21OEMs and Tier 1 suppliers, ranking No. 1 globally, according to CIC.
• In this note, we talk about the not-so-positive aspects of the deal.

• Share price of Travelsky Technology Ltd H (696 HK) is still down YTD as investors are still overly cautious on Chinese travel data. 
• YTD operational data shows that the number of flights processed is very close to the pre-COVID era. 
• The company announced a profit alert recently, that should help to boost share price. 

• The review period for the September rebalance of the KOSPI Size Indices started 1 June and will end 31 August. The changes will be implemented at the close 7 September.
• We see 8 migrations from MidCap to LargeCap, 7 migrations from LargeCap to MidCap, 6 new adds to MidCap, and 16 migrations from SmallCap to MidCap.
• Historically, stocks migrating from SmallCap to MidCap have outperformed stocks that are migrating between other categories.

• As of 24 July, there could be one set of changes for the iShares China Large-Cap (FXI) (FXI US) in September.
• There should be less than 1x ADV to buy on ZTE Corp H (763 HK) while there will be nearly 2x ADV to sell on Anhui Conch Cement (914 HK). 
• Short interest has been inching higher on ZTE Corp H (763 HK) while it is barely moving on Anhui Conch Cement (914 HK) as the stock trades near its lows.

• Infineon benefits from a strong market position in an industry with high barriers to entry.
• The Company’s backlog of €36bn, representing over 2x annual revenues, reduces the impact of end-market volatility. 
• Silicon carbide, the material for semiconductor wafers, is becoming more prevalent. Infineon is well on track to have a material cost advantage and better technology versus its silicon carbide competitors.

• We were invited to BILI’s 2023 investor day, during which BILI management presented several catalysts. 
• However, most of these catalysts appear to be minor. BILI management is fully aware of the challenges in the industry.
• We maintain a SELL rating, and investors may consider shorting BILI after <Uma Musume> is launched.

• Japan’s semiconductor technology export restrictions took effect on Sunday and are unlikely to ease for China any time soon.
• Apple is reportedly telling suppliers that its flagship iPhone volumes will be similar to last year.
• Hon Hai acquires 50% stake in German auto chassis maker, marking a significant expansion in its EV manufacturing efforts.

• As most AI heavyweight stocks (e.g. Nvidia, Microsoft) have already soared, some investors may be left feeling that they have missed the AI bandwagon.
• We believe there’s a delayed “AI winner” which the market is still sleeping on: EPAM Systems.
• With the stock back at ~$230, the risk-reward here is highly attractive in our view.

• Kahoot! ASA (KAHOOT NO) saw better times on the stock market during the pandemic. To revive fortunes, GS AM has enlisted top shareholders and offers NOK 35/share “best and final” price.
• This represents 29.1x EV/Fwd NTM EBITDA, 3.3% FCF yield. I believe the offer price is fair. Interloper risk seems low: a competing bid should come above NOK 38.5, surely overpaying.
• Spread is 0.74%/2.15% (gross/annualised, assuming settlement by 30 November). With better opportunities elsewhere, I would wait for the share price to come under NOK 34.5 to open a position.

• Robosense Technology (ROBO HK) (RT) is looking to raise around US$400m (estimated) in its upcoming Hong Kong IPO. 
• As of Mar 23, it had earned design wins for mass production of LiDAR for 52 vehicles with 21OEMs and Tier 1 suppliers, ranking No. 1 globally, according to CIC.
• In this note, we talk about the positive aspects of the deal.

• Qiniu Limited (1045102D CH) is looking to raise about US$200m in its upcoming Hong Kong IPO.
• Qiniu is an intelligent audiovisual service provider. According to iResearch, the firm is the third largest audiovisual platform as a service (PaaS) provider in China in terms of FY22 revenue.
• Qiniu’s revenue has primarily been driven by its MPaaS segment over the track record period. However, the firm’s losses are still widening while its balance sheet health deteriorates. 

• 111 Inc (YI US), China’s largest virtual pharmacy network, amended an SC 13D filing on 13 July, which belatedly updated the consortium’s privatisation offer of US$3.66 per ADS. 
• The consortium has been revamped such that the lead investors (Dr Gang Yu, Dr Junling Liu and Shanghai Guosheng Capital Management) are joined with 13 additional investors.
• The development facilitates the signing of a definite agreement. The consortium represents 95.27% of the voting power, which ensures a successful vote. At last close, the gross spread is 9.6%.

• SATP Holding, a leading China-based SMB finance and taxation solution provider, filed to go public in Hong Kong. The company is led by visionary Founder and CEO Shugang Zhang.
• SATP Holding offers scalable SaaS-based bookkeeping and taxation solutions to SMBs in China. The proprietary SaaS system (SATP) automates tax filings and financial statement submissions.
• According to Pitchbook and the company’s IPO prospectus, the founder-led software provider has raised ~$226M in funding across nine funding rounds.

• 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 this note, we will talk about the positive aspects of the deal.

• TSMC reduced 2023 revenue guidance when it reported results during the week. A weaker than expected economy in China and general economic weakness was blamed.
• However, the company’s results beat Street expectations and management maintained its long-term gross margin guidance of 53%+, which implies the company maintaining a structurally higher margin.
• Shares fell after results on a profit taking excuse — We however note that latest guidance also reaffirmed multi-year strength ahead. Structural Long.

• We expect Kuaishou to report C2Q23 revenue and non-IFRS net income that are in-line and 27% vs consensus, respectively.
• We slightly cut our revenue forecast for live streaming but increased our revenue forecast for online ads. Kuaishou’s margin beat is mainly due to efficient cost control, especially in overseas.
• Kuaishou still has several minor positive catalysts, but WeChat Video Accounts is the major short thesis in the long run. We raise EPS forecasts, but maintain SELL.

• JFSL spun off from Reliance Industries (RIL IN) last week and Ventia (VNT AU) replaced Blackmores Ltd (BKL AU) in the S&P/ASX 200 (AS51 INDEX). 
• The IDX should announce the changes to the IDX30, LQ45 and IDX80 indices early in the coming week.
• There were inflows to Tracker Fund of Hong Kong Ltd (2800 HK) and Hang Seng H Share Index ETF (2828 HK) while Taiwan focused ETFs had outflows.

• Weekly summary of vol changes and moves across Global Markets
• Analysing ATM volatility and skew changes over the last 5 days
• We suggest a few trades to take advantage of the implied vol surfaces

• This is our first report on Monolithic Power Systems, one of the largest semiconductor-based equipment companies.
• Revenue from communications also increased due to a slight increase in revenue from the 5G infrastructure.
• We initiate coverage on the stock of Monolithic Power Systems, Inc. with a ‘Hold’ rating.

• This is our first report on Latin American telecom major, America Movil.
• Growth in prepaid and postpaid subscriptions remained steady, contributing to an 8.3% expansion in the postpaid base and a 5.3% increase in the prepaid base.
• Despite a 4.6% year-on-year decrease in Q2 revenue due to the Mexican peso’s appreciation against other currencies, the company still posted MXN 203 billion in revenue, with service revenues declining by 4.2%.

• TSMC reported earnings. They beat Q2 estimates, but importantly they guided down Q3 and FY 2023 estimates.
• The Q2 beat was widely expected regarding revenue, given that TSMC reports monthly revenue, but the Q3 guide was not.
• The midpoint of the guidance has the year-over-year decline decelerating, which I didn’t expect. Moreover, the -10% annual guide throws some water on the second-half recovery. Yes, the second half will be higher than the first, but the recovery is much more muted than historical. And what’s more, margins are looking worse for N3 than a typical node.