TMT/Internet

On Thursday 8 December, an article showed up in Bloomberg suggesting Son-san had “increased his stake” as the company bought back shares, giving him more rights, “edging towards a buyout.”
That is a stretch. He went from below one-third to above one-third, giving him an explicit veto on shareholder super-majority resolutions, but it’s minor. He now has 34.2%.
The suggestion: if he got two-thirds, he could squeeze out minorities without a Tender Offer. Technically true, but not easy. I dig deeper and propose how it could be done.

2023 High Conviction: NTT (Buy) – Surging DoCoMo Underappreciated as Markets Step Back from Value

By Kirk Boodry

We have tweaked our numbers after Q2 results and catching up with the company. In particular, we come away with more confidence in wireless / fintech growth
NTT looks cheap at 11x FY22e EPS v 12x for KDDI even as relative growth is expected to be better with ~9% EPS growth
Shares have outperformed TOPIX (+18% YTD v -3%) and this should continue in 2023 as solid financial performance and an attractive shareholder returns story provide support

Softbank Group – China Rebound Has Helped After End-Of-Buyback Hangover

By Kirk Boodry

Alibaba is up 20% QTD and the public Vision Fund portfolio is on track for its first positive quarter in almost two years thanks to China upside, mostly for Didi
That has kept the share price elevated even as the discount to fair value has expanded since buybacks ended at Q2 results
At 34% now, there is room for the discount to expand further as the range before the buyback surge was generally closer to 40%

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 09

Daily Brief TMT/Internet: Trina Solar Co Ltd, Infosys Ltd, Nitro Software Ltd, Glints, SK Telecom, Elastic NV, OpenAI, PagerDuty Inc, Ambarella Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

China Rebalances at the Close Today- BIG Flows
Infosys (INFY)’s US$1.1bn Buyback
Nitro Software (NTO AU): Potentia Raises to A$2.00 as the Battle Heats Up
Singapore-Based Glints Lays off 18% of Employees
Targetable Names on KOSPI for Dividend Arbitrage: DPS Estimates & Current Basis
Nitro Software: Potentia Matches KKR’s $2.00/Offer
Elastic NV: Improvements To The Elastic Search Platform & Other Drivers
What Is ChatGPT and What Does It Bring to the Table?
PagerDuty Inc: Major Drivers
Ambarella Inc: Major Drivers

China Rebalances at the Close Today- BIG Flows

By Brian Freitas

There are multiple local China indices that rebalance at the close of trading today. Plus MSCI China and FTSE All-World/All-Cap flows due to changes to the Northbound StockConnect Buy-and-Sell list.
China Pacific Insurance (Group) Co., (601601 CH) replaces Beijing-Shanghai High Speed Railway-A (601816 CH) in the FTSE China A50 Index (XIN9I INDEX).
The round-trip turnover at the close of trading today should be in excess of US$8bn.

Infosys (INFY)’s US$1.1bn Buyback

Infosys Ltd (INFO IN) (Infosys Ltd Sp Adr (INFY US)) on 5-6 December announced an on-market buyback of more than US$1.1bn.
The company has done buybacks before, and it is worthwhile looking at the details.
The buy-back looks small, and may be impactful near-term in near-space.

Nitro Software (NTO AU): Potentia Raises to A$2.00 as the Battle Heats Up

By Arun George

Nitro Software Ltd (NTO AU) has received a revised Potentia off-market takeover offer at A$2.00 per share, an 11.1% premium to its previous offer and in line with Alludo’s offer.
By bumping its offer, adding a scrip alternative and signalling a potentially higher price on due diligence access, Potentia has ramped up the pressure on the Board.
Potentia/Alludo offer remains at the low end of the IE’s valuation range. Alludo would have anticipated this move and likely will have factored in the need to raise its offer.

Singapore-Based Glints Lays off 18% of Employees

By Tech in Asia

Glints, a Singapore-based careers platform, is laying off employees “based on market conditions and business priorities,” the firm’s co-founder Oswald Yeo said in his address to staff.
The development comes after the startup raised US$50 million in a series D funding round in August.
In the same month, the firm claimed that its annual revenue and gross profits grew 2.5x over the past 12 months.

Targetable Names on KOSPI for Dividend Arbitrage: DPS Estimates & Current Basis

By Sanghyun Park

Targetable names on KOSPI for dividend arbitrage: SK Telecom (017670), Woori Financial (316140), SK Hynix (000660), KB Financial (105560), Korea Zinc (010130), and HMM (011200)
Samsung Electronics (005930)‘ basis does not reflect special dividends, even though speculations have not disappeared entirely.
As the current basis hasn’t widened to an entirely sufficient level, we need to target arb trade openings focusing on the above stocks a bit more aggressively.

Nitro Software: Potentia Matches KKR’s $2.00/Offer

Potentia Capital has bumped its Offer for Nitro Software Ltd (NTO AU) to A$2.00/share, matching KKR’s earlier Offer.
Potential’s proposal – which also boasts a scrip alternative for those investors wishing to remain invested – is open for tendering, and has no minimum acceptance threshold.
Nitro’s board has yet to provide a view on Potentia’s revised terms.

Elastic NV: Improvements To The Elastic Search Platform & Other Drivers

Elastic NV managed to deliver an all-around beat in the last result as it continues making progress across innovation.
The company has recently announced innovations over the Elastic Search platform, the prominent data analytics platform for search-powered solutions for transforming the way organizations observe, search, and protect their data.
This quarter, Elastic expanded business with RDD, the leading supply chain, print, packaging, and marketing solutions provider.

What Is ChatGPT and What Does It Bring to the Table?

By Tech in Asia

OpenAI, a US-based AI firm set up by Elon Musk and Sam Altman, released the preview version of a chatbot model called ChatGPT (Chat Generative Pre-Training).
Immediately, the model took the internet world by storm, as the chatbot produced accurate, human-like answers (most of the time) to questions and commands.
In a nutshell, the model was trained using a form of supervised fine-tuning called reinforcement learning from human feedback (RLHF).

PagerDuty Inc: Major Drivers

PagerDuty performed well in the last quarter despite the relatively uncertain environment and delivered an all-around beat.
The company saw a good performance in financial services, tech retail, and other verticals.
Total paid and free customers on its platform grew, and consumers continued to adopt more products and services and expand users.

Ambarella Inc: Major Drivers

In this quarter, Ambarella experienced material headwinds from the industry-wide semiconductor cyclical downturn.
Also, the content in the products of the customers continues to rise as it leveraged its historical success with optimized processing for high bandwidth sensing.
We provide the stock of Ambarella with a ‘Hold’ rating with a revision in the target price.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 08

Daily Brief TMT/Internet: Tongcheng-Elong Holdings Ltd, Appier Group, Salesforce.Com Inc, Synopsys Inc, Crowdstrike Holdings Inc, Zscaler, Hewlett Packard Enterprise Co, Marvell Technology Group Ltd, Workday Inc Class A, Netapp Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace Ming Yuan Cloud (909 HK)
TOPIX Inclusions: Who Is Ready (Dec 2022)
Salesforce Inc: New Real-Time CRM Platform & Other Drivers
Synopsys Inc: Collaboration With SiFive & Other Drivers
CrowdStrike Inc: Major Drivers
Zscaler Inc: Zero Configuration Data Protection & Other Developments
Hewlett Packard Enterprises: New Product Launches & Other Drivers
Marvell Technologies: New Product Launch & Other Drivers
Workday Inc: Cloud Transition Collaboration With KPMG & Other Drivers
NetApp Inc: The BlueXP Launch & Other Drivers

HSTECH Index Rebalance Preview: Tongcheng Travel (780 HK) Could Replace Ming Yuan Cloud (909 HK)

By Brian Freitas

Tongcheng-Elong Holdings Ltd (780 HK) could replace Ming Yuan Cloud Group (909 HK) in the Hang Seng Tech Index (HSTECH INDEX) at the March rebalance.
One way turnover is estimated at 2.1% resulting in a one-way trade of HK$1.7bn. Passive trackers will need to buy nearly 10x ADV on Tongcheng-Elong Holdings Ltd (780 HK).
After being deleted from the MSCI China Index at the November SAIR, this could be the next major index deletion for Ming Yuan Cloud Group (909 HK).

TOPIX Inclusions: Who Is Ready (Dec 2022)

By Janaghan Jeyakumar, CFA

Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
This insight is a follow-up to TOPIX Inclusions: Who Is Ready (Oct 2022)
At present, there are 60 names that satisfy all of these conditions and there are more names that are close to being in that group.

Salesforce Inc: New Real-Time CRM Platform & Other Drivers

Salesforce’s stock has been badly hit by the general bearishness in the markets towards tech stocks and is trading at a low.
However, the company’s results were decent as it delivered strong sales growth and profitability surpassing Wall Street expectations on all fronts.
This quarter, the ARR increased by more than 50% in seven of their 13 industry clouds.

Synopsys Inc: Collaboration With SiFive & Other Drivers

Synopsys ended the year with a decent result meeting the revenue expectations of Wall Street and managing an earnings beat.
The company reached the $5 billion yearly revenue milestone during this quarter as they extended customer relationships and altered their product lineup in order to sharpen their competitive edge.
Despite a slowdown in revenue growth for the semiconductor business, design activity is still strong.

CrowdStrike Inc: Major Drivers

CrowdStrike had a solid quarter increasing its revenue by 53% year-over-year, surpassing Wall Street expectations.
In the enterprise, sales cycles or average days to closure remain marginally higher than the previous quarter.
Furthermore, LogScale experienced another solid quarter in Q3 thanks to their wins in the financial services, insurance, technology, retail, energy, and telecommunications industries.

Zscaler Inc: Zero Configuration Data Protection & Other Developments

Zscaler delivered good results in the last quarter surpassing Wall Street expectations in terms of revenues as well as earnings.
Consumers are buying Zscaler for users, its complete platform for user protection, including ZDX, ZPA, and ZIA bundled together.
We provide the stock of Zscaler a ‘Buy’ rating and a revision in the target price.

Hewlett Packard Enterprises: New Product Launches & Other Drivers

Hewlett Packard Enterprises had a decent fourth quarter as its revenues managed to surpass Wall Street expectations and strong quarterly free cash flow.
The company managed to meet Wall Street expectations with respect to earnings.
We remain neutral on Hewlett Packard Enterprises and maintain our ‘Hold’ rating with a revised target price.

Marvell Technologies: New Product Launch & Other Drivers

In the last quarter, Marvell delivered a disappointing result as its revenues and earnings failed to meet Wall Street expectations.
The company’s top-line continues to be driven by its auto, 5G, and cloud businesses.
On a sequential basis, the data center revenue of the company declined because of softness in its on-premise business.

Workday Inc: Cloud Transition Collaboration With KPMG & Other Drivers

Workday delivered another solid quarter and managed an all around beat.
The company’s APA won over a number of clients, including Trip.com, Fletcher Building, Bank of Queensland, and a pharmaceutical company.
During the quarter, they also disclosed their collaboration with KPMG to launch Industry Accelerators in two important corporations, including banking and healthcare, based on their Industry Accelerator program.

NetApp Inc: The BlueXP Launch & Other Drivers

NetApp generated a mixed set of results for the last quarter as it failed to meet Wall Street expectations with respect to revenues and billings but managed an earnings beat.
It is evident that their cloud services’ growth has slowed down.
Besides, they have significantly adjusted their revenue projection for the remaining months of the fiscal year in light of impending economic headwinds.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 07

Daily Brief TMT/Internet: Fujitsu Ltd, Sohu.com, DeNA, LG CNS, Nasdaq-100 Stock Index, Net Protections, Intuit Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Fujitsu (6702) Buyback Just Getting Started
Negative EVs: JOYY & Sohu’s Steep Discount To Net Cash
DeNA (2432) Buyback – Accretive on a Low Leverage Business Which Will Grow In Time
2023 Major IPOs Pipeline in Korea
EQD | SPX Index/NDX Index : Big Data Week Coming Up-We Look at What Is Priced In
Net Protections Holding IPO Lock-Up – PE Owner Is Free to Shed Its Remaining Stake
Intuit Inc: The SeedFi Acquisition & Other Drivers

Fujitsu (6702) Buyback Just Getting Started

On 28 April 2022, with full-year earnings, Fujitsu Ltd (6702 JP) announced a buyback programme to buy back up to 12mm shares (6.11% of shares out) for up to ¥150bn
That was when the shares were ¥18,540. The shares popped 10% in 2 days. Then fell 25% into end-September. Yesterday, they announced they’d bought back 1.9mm shares in November.
Those were the first shares bought back under the Programme. And that leaves 4 months and a lot of stock to buy.

Negative EVs: JOYY & Sohu’s Steep Discount To Net Cash

Screening US-listed China plays with negative EV and positive tailing EBITDA generates eight names.
Of these companies, only two are expected to be EBITDA positive in FY22.
They are JOYY (YY US) and Sohu.com (SOHU US). This insight looks at both names.

DeNA (2432) Buyback – Accretive on a Low Leverage Business Which Will Grow In Time

DeNA (2432 JP) announced in June a buyback programme to buy up to ¥15bn of stock over the next nine months. They are two-thirds the way through.
At current pace, they should finish by end-Jan or early Feb, then cancel 8mm shares, leading to a small TOPIX selldown likely in March or April.
The company remains cash and securities rich (net cash, after-tax value of securities, and equity affiliates are 100% of market cap). And growth lines will slowly claw their way positive.

2023 Major IPOs Pipeline in Korea

This is our 8th “Annual Edition of the Major Korean IPOs Pipeline Preview” at Smartkarma!
This insight will feature 50 of the biggest potential IPOs in Korea in 2023.
The overall IPO market in Korea is likely to continue to be weak in 1H 2023, although there are some potential for a rebound in 2H 2023.

EQD | SPX Index/NDX Index : Big Data Week Coming Up-We Look at What Is Priced In

By Simon Harris

Next week is the last big week of data releases for the year
With CPI data and also a FED meeting there is lots of potential volatility to come
We look at what is priced in to the derivatives market and suggest some trade ideas

Net Protections Holding IPO Lock-Up – PE Owner Is Free to Shed Its Remaining Stake

By Sumeet Singh

Net Protections (7383 JP), a buy now pay later service provider, raised around US$570m via selling a mix of primary and secondary shares in its Japan IPO in Dec 2021.
As per Yano Research, it had 40% market share in the domestic BNPL market for B2C transactions.
In this note, we will talk about the upcoming lock-up expiry on 9th Dec 2022.

Intuit Inc: The SeedFi Acquisition & Other Drivers

By Shifara Samsudeen, ACMA, CGMA

Intuit had a successful first quarter and managed to surpass Wall Street expectations in terms of revenues as well as earnings.
TurboTax also had a strong finish with a number of improvements introduced and tested during the quarter.
Intuit is also developing its own bill-pay feature for QuickBooks and intends to make it available in the future.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 06

Daily Brief TMT/Internet: Meituan, Bilibili Inc, ATRenew, Netgear Inc, Hon Hai Precision Industry and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Meituan (3690 HK): 3Q22, Growth Higher, Loss Close to Zero, 90% Upside
Bilibili: Earnings Recovery to Continue with Improvement in Mobile Games and Cost Controls
ATRenew: A Turnaround Story With Material Increase in Profit Margins + Remaining Share Buyback
NTGR: Routing Thru Investor Day
Taiwan Tech Weekly: Hon Hai IPhone Plant Recovery, Nanya Slumps, Intel Foundry Potential in 2023

Meituan (3690 HK): 3Q22, Growth Higher, Loss Close to Zero, 90% Upside

By Ming Lu

The revenue growth rate accelerated to 28% YoY in 3Q22 versus 16% YoY in 2Q22.
Operating Loss was close to zero in 3Q22 and we believe it will turn positive in 2023.
According to price / sales history, we believe the company has an upside of 89% for year end 2023.

Bilibili: Earnings Recovery to Continue with Improvement in Mobile Games and Cost Controls

Bilibili Inc (BILI US) reported 3Q2022 results Tuesday. 3Q revenue increased 11.3% YoY to RMB5.8bn (vs consensus RMB5.7bn) while operating losses for the quarter dropped to RMB1.8bn vs consensus RMB2.1bn.
Recovery in mobile games biz alongside aggressive cost cutting measures supported improvement in Bilibili’s profitability during the quarter.
Pandaily reported that Bilibili is exploring expanding into the SEA region and increased R&D spending could be an indication that plans are underway.

ATRenew: A Turnaround Story With Material Increase in Profit Margins + Remaining Share Buyback

ATRenew (RERE US) is one of the stocks in China that is starting to look very attractive after a sharp decline in its share price since its IPO.
ATRenew has achieved noticeable improvements in operations and profitability in the recent quarter.
Our base case valuation analysis suggests an implied market cap of US$720 million, representing an implied price of US$3.15 per share, representing an upside of 43% from current price.

NTGR: Routing Thru Investor Day

By Hamed Khorsand

NTGR held its annual investor day reflecting on the challenges it has incurred within retail and highlighting how consumer demand has remained strong for high-end devices and its 5G hotspot
NTGR’s stock has been trading at levels valuing the Company near its working capital on fears the business would continue to generate losses
NTGR’s transition in becoming a super-premium brand started over a year ago, but only in recent quarters has it began to take a bigger role on the consumer

Taiwan Tech Weekly: Hon Hai IPhone Plant Recovery, Nanya Slumps, Intel Foundry Potential in 2023

By Vincent Fernando, CFA

Hon Hai’s Zhengzhou iPhone plant to return to full production? Shares pop
Nanya Tech shares worst performers last week – We remain near-term negative
Intel & TSMC trade flattish last week — Intel currently at UBS’s TMT conference

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 05

Daily Brief TMT/Internet: Nomura Research Institute, HPSP and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

NRI (4307) Likely Prices Today – Expect Weakness Then Strength
Recap of Our IPO Research in 2022

NRI (4307) Likely Prices Today – Expect Weakness Then Strength

On 25 November Nomura Research Institute Ltd (4307 JP) announced that Jafco Co Ltd (8595 JP) and Nomura Holdings (8604 JP) would conduct a Secondary Offering of NRI Shares.
The sale is 36.97mm shares plus a greenshoe. It’s a big deal ($1bn) including greenshoe after JPY has just strengthened, but underperformance both before and after announcement sets up well.
Expect weakness today, but the stock is now at a two-year low, and the PER multiple premium is now at the lowest 3mo average premium in 5yrs. Expect retail buying.

Recap of Our IPO Research in 2022

In this report, we review our IPO investment research in 2022, including the performance of our calls.
The accuracy rate of our calls on IPOs this year was 79% (15 calls right, 4 calls wrong), higher than our average accurate rate of 77% from 2017 to 2022.
In 2022, the 12 stocks (positive ratings) were up 50.1% on average from their IPO prices. The 7 stocks (negative ratings) were down 11.2% on average from their IPO prices.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 04

Daily Brief TMT/Internet: Alibaba (ADR), KT Corp, Hong Kong Hang Seng Index, Tencent, Bigtincan Holdings Ltd, Palo Alto Networks, Fleetcor Technologies and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

ECM Weekly (4th Dec 2022) – Skymark, Daiei, Sunshine, Lygend, Weilong, NRI, Zomato, Goto, Bobcat
KOSPI 200 Up/Down Weights: Official Results & Passive Impacts on T-1 Effective
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades
EQD | Tencent (700 HK): We Identify Three Derivative Trades into Year-End
Bigtincan (BTH AU)’s Lightweight A$0.80 Offer from SQN
Palo Alto Networks: Acquisition of Cider Security & Other Drivers
FLEETCOR Technologies Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report

ECM Weekly (4th Dec 2022) – Skymark, Daiei, Sunshine, Lygend, Weilong, NRI, Zomato, Goto, Bobcat

By Sumeet Singh

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
On the IPO front, the two Japanese IPO set the ball rolling for the year end rush, with a few more lined up in Hong Kong along with Sunshine.
There were a few largish selldowns in Japan and India and given Hong Kong’s recent performace, it will see some deals soon as well.

KOSPI 200 Up/Down Weights: Official Results & Passive Impacts on T-1 Effective

By Sanghyun Park

Names with a significant impact: KT (030200), Shinhan Financial (055550), Korean Air (003490), LG Energy (373220), Dongwon Industries (006040), Lotte Fine Chemical (004000), Meritz Fire (000060), & Mirae Asset (006800)
Limiting the target size of our flow trading to only the fund size that directly mirrors it (₩17.8T) on T-1 Effective will increase our winning rate.
Lately, local pensions have been seen as rather taking advantage of flow trading in index rebalancing events, so I also recommend keeping the trading window fairly tight.

EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades

By Simon Harris

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

EQD | Tencent (700 HK): We Identify Three Derivative Trades into Year-End

By Simon Harris

Stock has recovered from an October low but may be running out of steam
Realised vol has been high and implied vols have not fallen as much as other equity assets
We suggest three trade ideas into year-end to take advantage of the vol surface and spot level

Bigtincan (BTH AU)’s Lightweight A$0.80 Offer from SQN

By Arun George

Bigtincan Holdings Ltd (BTH AU) disclosed a non-binding indicative offer of A$0.80 per share offer from SQN, a skinny 17.6% premium to the undisturbed price.
The offer is unattractive on several fronts and is the latest beaten-down ASX tech stock to be subject to a PE bid. Expect the Board to reject the offer.
Bigtincan also revealed other non-binding expressions of interest. This offer could flush out other potential bidders. At the last close, the gross spread is 6.0%.

Palo Alto Networks: Acquisition of Cider Security & Other Drivers

Palo Alto had a strong first quarter and managed to surpass Wall Street expectations in terms of top-line growth as well as profitability.
As the macroeconomic situation shifts, the company is ramping up its efforts to create incremental operating leverage in its business.
Another interesting fact is that Palo Alto has consistently outperformed other tech and cybersecurity stocks even in market lows.

FLEETCOR Technologies Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report

FLEETCOR Technologies is a well-known digital payment solutions provider to businesses across the world.
The company’s financial results have been reasonably good in recent times and have exceeded management expectations in terms of revenues as well as earnings.
Corporate payments have been increasing in double-digits as per the company’s recent results due to strong new sales, domestically and abroad.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 03

Daily Brief TMT/Internet: Pinduoduo, Bigtincan Holdings Ltd, Singtel, Darktrace, Samsung Electronics and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Pinduoduo (PDD US): Spectacular 3Q, Tough Outlook
Expect Bigtincan To Reject SQN’s Proposal
ASEAN Utilities: From Tap To Socket
STOXX Europe 600 Dec 22 Rebal: Final Changes and Historical Performance Analysis
When Will Samsung Life Insurance Be Forced to Sell Its Stake in Samsung Electronics by the Govt?

Pinduoduo (PDD US): Spectacular 3Q, Tough Outlook

By Eric Chen

PDD’s spectacular 3Q results will prove unsustainable based on our assessments of its core markets and deep-dive benchmark analysis of growth trajectory of PDD and Alibaba, using GMV as scale.
We see earnings risk going into 2023 due to well-penetrated wallet share of core user base, deflating growth drivers and ramp-up of investments.
In the long term, inevitable multiple compression also renders the risk-return payoff of this US$100bn company mediocre, even under blue-sky growth forecasts. Prefer Alibaba over PDD.

Expect Bigtincan To Reject SQN’s Proposal

Software provider Bigtincan Holdings Ltd (BTH AU) has announced an indicative proposal, by way of Scheme, from PE outfit SQN Investors at A$0.80/share, a 17.6% premium to last close.
Due diligence has not yet been afforded. SQN currently holds a 13.6% stake.
BTH also highlighted it has had preliminary discussions with other interested parties. Expect BTH’s board not to engage with SQN at this price.

ASEAN Utilities: From Tap To Socket

This insight covers 68 ASEAN utilities, each boasting a market cap greater than US$500mn.
Countries covered include Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.
Intouch Holdings (INTUCH TB) remains highly elevated, and is a short against Advanced Info Service (ADVANC TB), and perhaps with some Singtel (ST SP).

STOXX Europe 600 Dec 22 Rebal: Final Changes and Historical Performance Analysis

By Janaghan Jeyakumar, CFA

The December 2022 index changes for the STOXX Benchmark Indices were announced yesterday.
There will be 6 ADDs and 6 DELs for the STOXX Europe 600 Index and 3 ADDs and 1 DEL for the EURO STOXX Index in December 2022.
In this insight, we take a closer look at the index flow expectations and the historical performance of STOXX Europe 600 and EURO STOXX Rebalance events.

When Will Samsung Life Insurance Be Forced to Sell Its Stake in Samsung Electronics by the Govt?

The debate about whether or not Samsung Life Insurance should sell its stake in Samsung Electronics is being reviewed by the National Assembly once again.
The greater probability event is status quo. The Korean government is not likely to force Samsung Life Insurance to sell its stake in Samsung Electronics in the near term.
Korean government is likely to require Samsung Life Insurance to sell its stake in Samsung Electronics after the Lee family has paid off all their inheritance taxes in 3-4 years.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 02

Daily Brief TMT/Internet: Kanzhun, Tencent, Asana, Snowflake Inc, Zoom Video Communications Inc, FrankieOne, Dell Technologies Inc, Bigtincan Holdings Ltd, Applied Materials, Analog Devices and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Job Hunting App Operator’s Earnings Fall Despite End to National Security Probe
Volume, Call Options, Tencent, and China Overseas
Liquidity Risk Short Candidates: Luminar Tech, Asana, Appian, Oak Street Health
Snowflake FY3Q23 Earnings: Stabilizing Growth in FY2024
Zoom Video Communications: Product Updates & Other Developments
HuffPost Investor, Binance Join US$15.5M Series A+ Round of Fraud Detection Startup FrankieOne
Dell Technologies: Major Drivers
Expect Bigtincan To Reject SQN’s Proposal
Applied Materials: Key Drivers
Analog Devices Inc: New SPoE PESE & PD Solutions & Other Drivers

Job Hunting App Operator’s Earnings Fall Despite End to National Security Probe

By Caixin Global

The operator of Chinese recruitment app Boss Zhipin reported drops in third-quarter revenue and profit after restarting new user registrations following a nearly one-year suspension as part of a national security probe.
During the three months through September, Nasdaq-listed Kanzhun Ltd.logged a net profit of 211.7 million yuan ($29.8 million), representing a year-on-year drop of 26%
The firm generated about 99% of its revenue, or 1.16 billion yuan, from sales of recruitment services to corporate clients — a 2.7% year-on-year decrease.

Volume, Call Options, Tencent, and China Overseas

By Untying The Gordian Knot

Volume picked up on Tuesday, 29th November, just slightly below the 15th November volume, the previous buying climax.
Wednesday’s Volume fell 10% with new price highs.
The erratic rather than trending Volume without capitulation volume on the 31st October price lows are hallmarks of a bear market rally.

Liquidity Risk Short Candidates: Luminar Tech, Asana, Appian, Oak Street Health

By Eric Fernandez, CFA

Liquidity shorts can be great short candidates. The key characteristic is that the company may not be viable, economically, given their cash flows and cash requirements.
Liquidity shorts have built-in catalysts, have moderate to higher betas, and can have strong down moves if a crisis develops. They can go bankrupt, pushing the stock price near zero.
Today we are flagging Luminar Tech, Asana, Appian, Oak Street Health

Snowflake FY3Q23 Earnings: Stabilizing Growth in FY2024

By Aaron Gabin

Snowflake guided below consensus for 4Q2023 revenue growth on a mix of macro conservatism and a quirky point that more vacation travel will reduce the amount of workloads run.
Margins continue to beat to the upside and management is guiding FY2024 FCF marginst to 23%, just 2pts below the LT guidance.
Very conservative management team also guided for a stabilization in revenue growth for FY2024 at 47%, a bit below consensus, but better than feared given the earnings reports recently.

Zoom Video Communications: Product Updates & Other Developments

Zoom Video Communications delivered a decent quarter and managed an all-around beat.
From a product perspective, the company had robust growth in Zoom Phone, along with contributions from Zoom Rooms and other products.
Zoom Video Communications has recently announced a wide range of updates in different business units like Zoom IQ for sales, Zoom Events, Zoom Spaces, Zoom Contact Centre, and Zoom One.

HuffPost Investor, Binance Join US$15.5M Series A+ Round of Fraud Detection Startup FrankieOne

By e27

FrankieOne, a global platform connecting customers to multiple identity verification and fraud detection vendors via one API, has added US$15.5 million to its Series A+ round.
The new tranche will allow FrankieOne to expand its business across Asia Pacific and North America.
Founded in 2019 by Simon Costello and Aaron Chipper, FrankieOne is an identity and fraud detection engine helping companies onboard and protect their customers.

Dell Technologies: Major Drivers

After announcing a weak outlook in the last quarter and causing its stock price to plummet, Dell has shown a decent recovery.
Its stock price has continued to recover after the company delivered an all-around beat in a challenging demand environment.
Overall, we remain neutral on Dell and give it a ‘Hold’ rating with a revised target price.

Expect Bigtincan To Reject SQN’s Proposal

Software provider Bigtincan Holdings Ltd (BTH AU) has announced an indicative proposal, by way of Scheme, from PE outfit SQN Investors at A$0.80/share, a 17.6% premium to last close.
Due diligence has not yet been afforded. SQN currently holds a 13.6% stake.
BTH also highlighted it has had preliminary discussions with other interested parties. Expect BTH’s board not to engage with SQN at this price.

Applied Materials: Key Drivers

Applied Materials delivered a strong quarterly performance and managed to surpass Wall Street expectations in terms of revenues as well as earnings.
Demand remains very high in cutting-edge foundry/logic, with customers vying for leadership and driving significant technological inflections that decide their respective competitive positions.
AMAT should have a strong resilience because of their substantial backlog, expanding service business, and strong customer demand for their leading technologies that support significant technological inflection points.

Analog Devices Inc: New SPoE PESE & PD Solutions & Other Drivers

Analog Devices delivered another all-around beat in the recent quarterly result.
In Communications, Analog Devices expanded its 5G radio systems leadership with its transceiver portfolio, winning some additional share at key suppliers.
We provide the stock of Analog Devices with a ‘Hold’ rating with a revision in the target price.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Dec 01

Daily Brief TMT/Internet: Shanghai Fudan Microelectronics Group, Softbank Group, Appier Group, HYBE, Crowdstrike Holdings Inc, BLS International Services, Alibaba Health Information Technology, Marketingforce Management, Oracle Corp and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

CES China Semiconductor Chips Index Rebalance: Four Changes in December
Softbank Group (9984 JP) –The Masa Hurdles
Appier (4180) Nearing A TSE Prime (And TOPIX) Announcement?
End of Mandatory Lock-Up Periods for 58 Companies in Korea in December 2022
FY3Q23: If It’s All Macro, Do You Buy the Dip?
BLS International Services Ltd: Forensic Analysis
Alibaba Health 1H: Cost Enhancements Support Margins but Sustainabaility Remains to Be Seen
Marketingforce Management Pre-IPO Tearsheet
Oracle: What To Expect As It Reports Q2 2023 Results

CES China Semiconductor Chips Index Rebalance: Four Changes in December

By Brian Freitas

There are 4 changes for the CES China Semiconductor Chips Index that will be implemented at the close on 9 December.
Empyrean Technology, GalaxyCore, Shanghai Fudan Microelectronics and Shanghai Awinic Technology will replace Grinm Advanced Materials, Chengdu Corpro Technology, Shanghai Sinyang Smcndctr Mtls and Espressif Systems Shanghai in the index.
Shanghai Fudan Microelectronics Group (688385 CH) will be added to the MSCI China Index at the close today and will also be added to the CSI 500 Index in December.

Softbank Group (9984 JP) –The Masa Hurdles

By Victor Galliano

Masayoshi’s debt with Softbank group is big, and due to the poor performance of SoftBank Vision Fund 2, Masa’s equity interest as a co-investor is now zero
Internal hedge fund Northstar, in which Masa has a 33.3% stake, is in liquidation leaving Masa’s share of his Northstar debt to SoftBank at USD1.2bn
SoftBank’s collateral on Masa debt includes the Vision Fund 2 equity, as well as SoftBank shares and other personal assets; we expect SoftBank’s NAV discount of c 25% to widen

Appier (4180) Nearing A TSE Prime (And TOPIX) Announcement?

On 17 Feb 2022, Janaghan Jeyakumar, CFA wrote about Appier Group (4180 JP) suggesting it was a TOPIX inclusion candidate in the not-distant future.
In mid-August 2022, he reiterated his opinion. Three days later, the company said they had applied for TSE Prime membership. We are coming up on the timing for an announcement.
It would mean buying, but the shareholder structure is interesting, and intentions are not easy to read. But if they announce imminently, the calendar makes the event even more interesting.

End of Mandatory Lock-Up Periods for 58 Companies in Korea in December 2022