TMT/Internet

• SK Hynix and Samsung both released their latest earnings last week. The companies are the leading players for Nanya Tech’s memory chip industry.
• SK Hynix’s latest gross margin performance confirms Nanya Tech performing in-line with the industry leaders.
• Guidance from both SK Hynix and Samsung indicates a likely improvement in supply/demand dynamics in 2023E for the memory chip space.

• Nitro Software Ltd (NTO AU) entered a trading halt in response to Potentia’s off-market takeover offer of A$1.80 per share, a 13.9% premium to its previous rejected offer of A$1.58.
• Potentia will block rival schemes and not accept competing takeover offers. This move will make it hard for the Board to convince a rival bidder to table an offer.
• Potentia wants a friendly offer and placed majority Board support as a condition. The offer is unattractive but Potentia has hinted at improved terms if provided due diligence access. 

• Following its planned section transfer, LX Semicon (108320 KS) will be deleted from the KOSDAQ 150 Index at the close on 2 November and replaced by Nextin (348210 KS).
• Passive trackers will need to buy over 4.5 days of ADV on Nextin (348210 KS) and sell over 1.5 days of ADV on LX Semicon (108320 KS). 
• Belonging to the Information Technology sector, there is zero chance of LX Semicon (108320 KS) being added to the Korea Stock Exchange Kospi 200 Index (KOSPI2 INDEX).

• Pushpay Holdings (PPH NZ) entered a scheme implementation deed (SID) with Sixth Street/BGH at NZ$1.34 per share, a 30.1% premium to the undisturbed price (12.6% premium to the last close).
• The key conditions are shareholder and regulatory (OIO & US antitrust) approvals. The scheme meeting is in 1Q23. 
• The offer is light. A concentrated shareholder register and signs of retail opposition are risks. A 75% deal probability, implies buying up to NZ$1.27 per share.

• Church donor management tech play Pushpay (PPH NZ) has been fielding expressions of interest since April. Earlier this month,  Pushpay announced it had received another proposal, reportedly from BGH/Sixth Street.
• On the 28 October, Puspay announced it had entered into a Scheme Implementation Agreement at NZ$1.34/share with BGH/Sixth Street, which collectively hold 20.34%. This is  a 30.1% premium to undisturbed.
• The offer is subject to shareholder and regulatory approval, with a possible completion date in early 2Q23. 

• Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
• Overall, the net inflow over the past week was ~HK$3.65bn, split (+HK$1.78bn) for Shanghai and (+HK$1.87bn) for Shenzhen.
• The largest inflows were in Tencent (700 HK) and Meituan (3690 HK). The largest outflows were in China Shenhua Energy (1088 HK) and China Overseas Land & Investment (688 HK).

• Softbank Group’s share price has been supported by the share buyback programme since late September, but 2Q FY2022 results are likely act as a negative catalyst for Softbank shares
• Alibaba and its core listed holdings in the Vision Funds have seen market values go lower in recent months; see the diverging market price chart trends in this report
• In addition, valuations among the unlisted holdings are also under pressure into October, so 2Q results may not capture the full extent of the down rounds

• Intel put forth a significant cost cutting program to generate $3B in savings in 2023 and $8-10B by 2025.
• CEO Gelsinger’s PC forecasting track record is horrendous, we wouldn’t bet on a down MSD 2023 market.
• Datacenter…which once carried near 60% margins hit breakeven this quarter… an astonishing fall.

• Micron delivered a mixed set of results for the previous quarter, missing out on the revenue expectations of Wall Street but managing an earnings beat.
• As a result, demand is being reduced for the other parts of the supply chain, which already have more than enough inventory, because the servers cannot be built.
• Therefore, although the overall demand for clouds is generally healthy, this is one factor that is having an impact on it.

• BlackBerry had a mediocre quarterly, beating profitability estimates of Wall Street while delivering revenue aligned with forecasts.
• The best performer continues to be QNX design base revenue.
• Royalty revenue increased on the production side, but it is still below pre-pandemic levels, mostly because of supply chain challenges.

• GoTo on Monday confirmed that it’s currently working with pre-IPO shareholders to explore a coordinated secondary offering of shares held by these shareholders when their lock-up expires on 30 November.
• Following IPO, most shareholders agreed to hold onto their shares for a period of 8-months, and the lock-up period for around 90% of outstanding shares will expire next month.
• As we continue to highlight in our previous insights, growth in top line does not necessarily mean profits for GoTo, and the company continues to burn cash to fuel growth.

• The review period nearly complete, we see 7 potential adds and 9 potential deletes at the December rebalance. However, there can be a maximum of 5 changes at a rebalance.
• We estimate a one-way turnover of 4.28% at the December rebalance leading to a one-way trade of CNY 3.42bn. Index arb activity could add to the impact on the stocks.
• The potential adds have dropped over the last month while the potential deletes have moved higher over the last couple of weeks.

• Elmo Software (ELO AU) entered a scheme implementation deed (SID) with K1 at A$4.85 per share, a 100.4% premium to the undisturbed price.
• The key conditions are a shareholder and regulatory (FIRB & US antitrust) approvals. The scheme meeting is likely in early 1Q23. 
• While not a knockout bid, it is attractive in the context of current conditions. Key shareholders will vote in favour. At the last close, the gross spread is 4.8%.

• Turbulent markets can  widen merger spreads arbitrarily creating attractive  arb opportunities with the potential for outsized IRRs
• Among the several live transactions indicating unusually high spreads, none looks more alluring than the prospective MaxLinear (MX US) acquisition of Silicon Motion (SIMO US) in the semiconductor sector
• The combination of an exceptionally wide spread driven by unsupported skepticism that the merger will not pass muster with China’s SAMR and historically low valuations make SIMO’s risk-reward profile  enticing

• MAUs beat, margins miss, guidance weak. Where / when is the operating leverage?
• Podcasting business took a restructuring charge this quarter, not bullish for the business meant to expand gross margins.
• TikTok reportedly readying a new streaming music app… not good.

• After many quarters of consistently beating Wall Street expectations on all counts, FactSet delivered a mixed result in the last quarter exceeded revenue expectations of analysts but missing out on earnings.
• The company finished fiscal 2022 with organic ASV plus professional services growth of $158 million, accelerating by approximately 200 basis points year over year to over 9%.
• With private company coverage throughout their content refinery, workflow solutions for private equity and venture capital companies, and seamless linked workstation integration, the team is progressing with its private market strategy.

• Verizon ended the quarter with a wireless service revenue increase of 10% over the prior year and 2% over the previous quarter, surpassing Wall Street expectations.
• With consumers responding well to the company’s new offerings and thus increasing store traffic, its Consumer segment has begun to gather traction.
• Their Welcome plan also enhanced customers’ perceptions of cost, which helped to increase consumer phone gross adds year over year.

• The TOPIX October FFW rebalance is Friday at the close. 
• It is still ¥2trln+ to buy and ¥2trln+ to sell. And there are some big names. A spreadsheet is attached with all the flows. 
• Surprisingly, the top 40 Z-scores on each side have traded in a VERY tight range for the 6 weeks prior to the announcement and the two weeks post. Very weird.

• Near the end of the review period, we see 16 potential changes to the CSI 300 Index at the December rebalance. There are other stocks very close to the cutoffs.
• We estimate a one-way turnover of 3.04% at the December rebalance leading to a one-way trade of CNY 8.4bn.
• The potential adds have outperformed the potential deletes, though the gap has narrowed in the last few weeks. We’d position for outperformance post the end of the review period.

• In this insight, we discuss a pair trade between LG Chem Ltd (051910 KS) (go long) and LG Energy Solution (373220 KS) (go short). 
• LG Chem’s shares are trading at nearly 66% discount to its NAV which we believe to be excessive. 
• Another major factor that could negatively impact LGES’ shares in the next several months is the end of the lock-up period for the company’s ESOA shares in about three months. 

• GoTo (GOTO IJ) confirmed that it is exploring a coordinated secondary offering of shares held by pre-IPO shareholders. The Series A shareholders’ lock-up expires on 30 November 2022. 
• The lock-up of 89.63% of the outstanding shares expires on 30 November. Within these shares, Alibaba (ADR) (BABA US) and Softbank Group (9984 JP) stakes are worth a combined US$2.6bn.
• GoTo continues to grow but with material losses and cash burn. The shares are fairly valued but the sizeable secondary offering (US$1 billion based on reports) will pressure the price. 

• In 3Q22, the game market size shrank in China and globally.
• The limitations on time spent on games by juveniles, imposed earlier by the authorities, severely impacted the domestic market.
• We believe the key impact for 2023 is the predictable license approval.

• Delta Electronics Thailand shares rose sharply ahead of its earnings result, where profit beat expectations. Delta Taiwan shares fell the same day, thus we see an opportunity.
• Delta Taiwan to report on October 28th. Delta Taiwan is now smaller in market cap than its subsidiary despite earning substantially higher levels of net profit.
• 2023E growth expectations are relatively similar for both, supporting Delta Taiwan to revert vs. Thailand. Trade opportunity into the Delta Taiwan October 28th results.

• This is our first report on global tech giant, Alibaba.
• The company is currently trading close to its 52-week low with its results just around the corner.
• Tmall GMV and Taobao experienced a percentage decline in the mid-single-digit in the last quarter.

• IRDM put the emphasis on its quarterly report versus commentary on smartphones and drones using satellite connectivity. The third quarter results continued to show the ongoing growth in IOT subscribers
• IRDM’s service revenue has been trending higher with added maritime and IOT subscribers
• During the third quarter, IRDM added 7 thousand voice subscribers and 89 thousand IOT subscribers. The rate of voice customer additions can be lumpy depending on seasonality

• Elmo Software (ELO AU) has entered into a Scheme Implementation Deed (“SID”) with K1 Investment under which ELMO shareholders will be entitled to receive $4.85/share, in cash.
• The SID has the support of the independent board and ELMO’s three largest shareholders collectively holding ~33.4% of shares out. 
• The Scheme is expected to complete in the 1Q23. The proposal requires FIRB approval. This looks done.

• Like most of its semiconductor peers, Lam has witnessed a strong correction after its earlier highs.
• It demonstrated its sustained strength in execution by surpassing the $5 billion revenue for the first time.
• It is ramping up output levels and has increased revenue by almost 10% compared to the previous quarter.

In 1992, a TV series aired in Hong Kong on TVB called The Greed of Man. The series told the three-plus-decade story of Ting Hai, an “uneducated and pathologically self-righteous brute” (played by Canto pop singer and actor Adam Cheng (born 1947)) and Fong Chun-sun, “an honest, cultured and refined leader of the Asian Stock Exchange” (played by Damian Lau) who were childhood friends, split, and saw Ting kill Fong over a girl.

Ting Hai fled to Taiwan, was brutish again, spent a decade-plus in prison there. One of Ting Hai’s sons pursues a Fong daughter, is rebuffed, the son turns violent. Eventually the three Fong daughters are killed, and Fong’s only son (played by Sean Lau) flees to Taiwan and makes it rich through indirect gambling on stocks. In Hong Kong, the Tings have made it rich by being short in the 1987 crash. Ting has come back to Hong Kong, is charged with murder, then buys himself out of a sentence. Fong comes back to Hong Kong, and they duke it out in the stock market in true good guys vs bad guys epic knock-down drag-out drama. Ting and his sons are backed by the triads. Fong is backed by a few HK tycoons. Eventually, Ting is wiped out.

He responds by throwing his four sons off the top of the stock exchange building and following himself. Only Ting survives, now billions in debt, and spends the rest of his life in prison. 

The first episode of the show actually started with that final scene of Ting hurling his sons off the building. TVB got so many calls from disturbed viewers they altered the show, and moved its time slot. Apparently, the re-issues and re-airings of the show all show edited versions. The edited version was re-released on TV in 2015 and was well-received in HK by a younger generation. 

Most importantly to this insight however, is that when the series started in 1992, the Hang Seng Index fell 1200 points in one month – that was almost 20% at the time. It started falling part way through the series, then the index fell 1,000 points (16+%) in four days after the gruesome ending.

There were so many complaints about the ending that TVB revised the video release and subsequent re-releases.

Two years later, another TVB drama series starring Adam Cheng called ‘Instinct‘ was aired starting in November 1994. The index started falling a day or two before, after what had been an ugly year-to-date, and fell 20% in 7 weeks while the series aired.

1996 saw two series starring Adam Cheng air on TVB.

Cold Blood Warm Heart – a romantic crime thriller series of 65 episodes aired its first episode on 5 February and ended its run on 3 May. The market fell 700+ points or 6% in the period. 

In early September 1996, Adam Cheng starred in another TVB series called Once Upon A Time In Shanghai (a remake of a 1980s series called The Bund), which ran from 2 September through 25 October 1996. The Hang Seng Index fell sharply the next day, and this was blamed on the Ting Hai Effect, but the market did pretty well in the 7-week-long series.

In late 1997 he starred in a historical drama called Legend of Yung Ching for a Taiwanese production company, covering a period in the mid 18th century of the Kangxi Emperor, the Yongzheng Emperor (Adam Cheng’s role), and the Qianlong Emperor in the Qing Dynasty. Apparently, the market dropped the day it aired. 

In June 1999, he starred in a four-part series called Lord of Imprisonment (may have been a Taiwanese series) which started apparently late in the month. That apparently started a fall of 6+% in the Hang Seng Index.

In 2000, a series called Divine Retribution aired on ATV. It was a sequel to Greed of Man, and was originally called Greed of Man 2000 and actually took place in the near future, not the recent past as had been the case for the original series. It ran from 11 September through 3 November 2000. The Hang Seng Index fell 10% in 6 weeks before rallying in the last two days of the series.

In March 2004 – from 8 March through 24 April 2004 – a historical drama of 37 episodes (more for the international version) starring Adam Cheng called Blade Heart aired on TVB. The opening theme song was performed by Adam Cheng.

You guessed it. The Hang Seng was down more than 10% in 7 weeks.

Later that year, he was in The Conqueror’s Story from 25 October through 4 December – also on TVB. The market fell nearly 200 points the day the series started. 

Adam Cheng also starred in a period costume drama called The Prince’s Shadow from 14 March through 18 April 2005. The market fell on the first day, regained most of its loss, but that was the high price of the series. The market fell over the period of the series.

In 2007, Adam Cheng played a real estate CEO in a TV drama set in contemporary China. The series, named Return Home ran for 33 episodes starting 15 July 2007.

In 2009 he did a TVB series on Hong Kong TV, titled The King of Snooker. It was 20 episodes airing on TVB from 30 March 2009 through 24 April 2009. On the first day, the market fell 600+ points or 4.7% on the day. He had also filmed a series in 2008 called The Book and The Sword – a 40-episode period drama aired in China starting 20 March 2009. The HK market fell 2.3% that day.

On 21 May 2012, a 30-episode psychological thriller titled Master of Play starred Adam Cheng. It ran on TVB for 30 episodes through 29 June 2012. The market fell 10% in the 10 days running up to the launch of the new series.

A year later, the period drama movie Saving General Yang was released in Beijing on 4 April 2013 and the next day, the Hang Seng was down 610 points (-2.7%).

In April 2015, the original 1992 drama The Greed of Man which made the Ting Hai Effect was rerun. The first day of the re-run (20 April) the market fell 2% or 558 points. 

He was interviewed in the South China Morning Post 9 days later and the next morning the article came out (30 April). He said he wasn’t to blame for the stock market’s falls when his shows aired. 

The market fell five days straight. 

In classic fashion, there was a new series out in 2018 called Ever Night. It saw advertising the two weeks before and the Hang Seng fell about 1,000 points in the two weeks before the release. People joked days before that the market fall was due to the new show.

The show was popular in China, so the 60-episode Season 1 started in October 2018 was followed by a 43-episode Season 2 staring 13 January 2020 and running for 3 months and a week. The market fell 25% from the start of Season 2 before rebounding. 

Which brings us to the present day…

Earlier this month, the sequel to The Greed Of Man was released for streaming on Disney+. The market, which had rebounded that day, fell for the next 6 days. 

And today, 25 October, TVB starts re-runs of the 1988 series Behind Silk Curtains starring Adam Cheng, where he plays the role of the chairman of a bank, and drives a businessman’s company to bankruptcy so he can take it over.

Notes:

• This is a fun thing. But it appears to be taken somewhat seriously. It ALWAYS comes up. 
• Not EVERY movie or tv series appearance causes bad results. Bar Bender aired starting on 3 April 2006 on TVB Jade, and the market was up that day, fell back a little in the following days, but not seriously, and then rose 8% by 26 April. 
• However, enough do that it retains its name decades later. 

Sources:

• CLSA put out a Hong Kong Market Outlook piece in April 2004 about The Adam Cheng Effect. That is probably the first I heard of it. 
• The Ting Hai Effect wikipedia page is a place to start. 
• There was an article in Chinese on www.chinanews.com (original source: http://big5.chinanews.com.cn:89/gate/big5/www.chinanews.com/yl/ypkb/news/2009/04-02/1629867.shtml) in April 2009 just after the King of Snooker series started which talked about the Tin Hai Effect. It is likely the source of some of the later articles in English because one of the dates is wrong and most later English sources copy that date.
• Wikipedia has a list of most of the TVB series by year of production. 
• IMDB has a list of most of his appearances. Wikipedia does too.

• HK markets fell to 13-year lows as President Xi solidified his hold on power, raising concerns for private businesses that have already struggled with harsher regulation
• Softbank looks smart for its early settlement of Alibaba-linked derivative contracts in August as political worries have shares testing new lows
• But exposure remains with Alibaba’s 12% decline equal to $3.3bn (¥485bn) in lost value. Shares have rallied throughout October but China news appears to have stalled the move

• Our base case target price of 276,567 won suggests a 37% upside from current levels for SK Inc. Our base case valuation assumes a 30% holdco discount.
• At DPS of 8,000 won, this would represent dividend yield of 4% at current price of 202,000 won.
• The three largest holdcos/quasi holdcos in Korea which include Samsung C&T, SK Inc, and LG Corp have strongly outperformed KOSPI this year. 

• Tencent (700 HK) shares dropped 11.43% during yesterday’s trade over concerns on the country’s political environment with Chinese president Xi Jinping securing an unprecedented third term.
• Gamma Data reported that mobile game sales in China dropped 25% YoY during third-quarter 2022 despite 3Q being a peak period for gaming due to 2-month long school holidays.
• Tencent’s shares dropped With renewed geopolitical challenges and further weakening of Tencent’s earnings, we expect share price to drop further.

• We expect strong Q2 results from TEL but full year earnings guidance is a risk
• WFE demand is deteriorating rapidly. Will TEL provide any thoughts on the 2023 outlook?
• We provide a scenario analysis for different WFE scenarios…the stock may have bottomed

• Lowya is an online furniture brand run by Vega Corp that hit the headlines with 42% growth in 2020 while most other lifestyle retailers were reeling from the pandemic. 
• Sales fell last year post-Covid and won’t grow much this year either but Lowya wants to become a ¥60 billion business and looks a good bet for the long-term.
• Lowya will shift to a mall model similar to Zozo which should allow it to grow faster, while tie-ups with major retailers like Aeon should raise brand awareness fast.

• Intel’s earnings this week is a key potential catalyst for the INTC & TSMC pair.  Look for comments related to U.S. chip restrictions for China.
• Intel going ex-div early November. We note Intel’s dividend yield is much higher than TSMC’s and Intel’s dividend level appears well covered by even falling earnings.
• Key upcoming events: Likely to be mostly related to Intel for the next two weeks.

• GoTo (GOTO IJ) listed on 11 April and closed at its lowest point since listing yesterday. The lock-up on pre-IPO shareholders expires on 30 November.
• GoTo (GOTO IJ) has confirmed that it is working with pre-IPO shareholders to explore a coordinated secondary offering.
• The lock-up expiry will result in a lot of shares hitting the market in December. The increased float could result in MSCI/FTSE inclusion early next year.

• System-On-Chip designer and IP purveyor Socionext (6526 JP) is a recent IPO in Japan, born from a spinout of Fujitsu and Panasonic system LSI operations 7+ years ago.
• Having listed on TSE Prime from the outset, that means it gets TOPIX inclusion at the close of trading 29 November. 
• Inclusion Float is a bit nebulous. There is a chance we get official company data prior to the TSE announcement, in which case we know more by cob 31 October.

• We remain bullish on the stock price ahead of Q3 earnings
• We expect the company to surprise the market given stronger volumes and pricing trends
• If Toyota is having problems securing a stable supply of chips, we believe that industry inventories are much leaner than most believe

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments – Giant Biogene Holding (GBH HK) will launch a US$500 million HKEx IPO this week. Blibli (1437710D IJ) has launched an IDR8.2 trillion (US$530 million) Indonesian IPO.
• Event-Driven developments  Link Administration (LNK AU), Nearmap Ltd (NEA AU), Pushpay Holdings (PPH NZ), Tyro Payments (TYR AU), China Vast Industrial Urban Development (6166 HK), Singapore Medical (SMG SP), DTAC/True.

• Two other names aim at Special Entry: WCP and SillaJen. Their listing dates are September 30 and October 13. So, they are technically eligible. But they each have their issues.
• As for WCP, MSCI has not yet assigned a GICS sector. It is unlikely that KRX will put WCP into the KOSDAQ 150 without GICS confirmation.
• SillaJen is technically eligible as its ADMINISTRATIVE designation got terminated. But the rule allowing for KRX’s arbitrary judgment can act as an uncertainty factor.

• U.S. chip restrictions have hobbled Hon Hai’s China EV competition.
• AI and advanced semiconductors will become a necessity for a globally competitive EV platform and Hon Hai appears to be moving aggressively to capture this opportunity.
• The shares should see topline growth and major margin expansion into 2025, and the market appears to have not yet priced-in Hon Hai’s latest advantageous position.

• ASML and Lam Research beat estimates last week and provided some relief to the semiconductor space.
• Major global industry earnings coming this week include — Samsung, SK Hynix, Texas Instruments, KLA Tencor, Apple, and Intel.
• Major Taiwan earnings this week — AUO, UMC, ASE, Realtek, Delta Electronics, Mediatek.

• TSMC’s ADR premium has rebounded and is high relative to its recent trading range.
• ASE Technology’s ADR premium has spiked to a historically very high level.
• UMC ADRs are also trading at a relatively high premium.

• The review period for the MSCI November SAIR started during the week and will run till 31 October. The TPX INDEX October rebalance will be implemented close on 28 October.
• The HDFC/ HDFCB merger is progressing faster than expected. NSE Indices has started a market consultation on treatment of mergers and demergers in their indices.
• There have been big redemptions in iShares MSCI Emerging Markets (EEM US) and iShares Core MSCI Emerging Markets ETF (IEMG US) during the week. Tracker Fund had big inflows.

• The IE considers Thoma Bravo’s A$2.10 offer fair and reasonable as it is within its valuation range of A$1.94 to A$2.45 per share (but the below the midpoint of A$2.20). 
• The spread has risen due to suggestions that some investors aim to block the scheme. These investors aim for a bump but will likely settle for the offer if unsuccessful. 
• At Nearmap Ltd (NEA AU)‘s last close price and for the 15 December payment, the gross and annualised spread is 5.8% and 44.5%, respectively.

• On the 15 August, mapping technology outfit Nearmap Ltd (NEA AU) unanimously backed Thoma Bravo’s A$2.10/share Offer by way of a Scheme of Arrangement. 
• The Scheme Booklet has now been lodged with ASIC. The Independent Expert reckons the Offer is fair and reasonable. 
• The Scheme Meeting will be held on the 25 November, as previously flagged in August’s SID, with an expected implementation on the 15 December. 

• In the past couple of weeks, there have been tremendous sanctions by the US government on China’s semiconductor sector. 
• In this insight, we compare this move to the US government putting a trade embargo on oil against Japan nearly 81 years ago.
• If there are severe disruptions to the semiconductor market in China, this will likely to have negative impact on the two Korean semi giants Samsung Electronics and SK Hynix.  

• After a steady correction over the past few months, Akamai’s stock has been appreciating steadily with its results being a few days away.
• Akamai has been leveraging its financial strength to make substantial investments in cloud computing and financial strength.
• The company’s security portfolio of zero trust enterprise has been performing well with several significant customer wins.

• Accenture delivered a good performance in its last result surpassing Wall Street expectations in terms of revenues as well as earnings.
• The company’s revenues grew in local currency which was driven by double-digit growth across all industries, services, and markets.
• The cloud business of Accenture performed well, with Cloud First being one of the big drivers of growth.

• With its next set of results around the corner, ZoomInfo Technologies definitely has a lot to look forward to.
• The company’s stock has remained stable in an otherwise bearish environment for the technology industry.
• We provide the stock of ZoomInfo with a ‘Buy’ rating with a revision in the target price.

• Jasmine International (JAS TB) is looking to sell its 99.8% interest in Triple T Broadband (TTTBB), and 19% stake in Jasmine Broadband  (JASIF TB) to Advanced Info Service (ADVANC TB).
• The sale required JASIF shareholder approval, but not all resolutions were approved at an EGM this week.
• This is a setback. However, the transaction remains on track.

• Key areas to pay attention in 3Q22: 1) Meituan Instashopping’s growth rate, 2) Meituan Select’s unit economics, 
• 3) 4Q guidance for food delivery and in-store, hotel and travel recovery.
• Valuation is entering an attractive territory with recent stock price correction.

• Blibli (1437710D IJ), a leading Indonesian e-commerce player, has launched an IDR8.2 trillion (US$530 million) Indonesian IPO. Bookbuilding is from 17 to 24 October.
• We have previously discussed the IPO in Blibli IPO: The Bull Case, Blibli IPO: The Bear Case and Blibli Vs Tokopedia Vs Bukalapak Vs Lazada Vs Shopee. 
• Our valuation analysis suggests that the IPO price range is unattractive. We would give the IPO a pass.

• Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
• Overall, the net inflow over the past week was ~US$2.7bn, split (+US$1.38bn) for Shanghai and (+US$1.36bn) for Shenzhen.
• The largest inflows were into Tencent (700 HK) and Wuxi (2269 HK). The largest outflows Tracker Fund of Hong Kong (2800 HK) and Hang Seng H Share Index (2828 HK).

• Bumble delivered a mixed set of results for the past quarter surpassing Wall Street expectations on the revenue front but missing out on earinings.
• The Bumble app continued to grow as the company performed well in traditional as well as international growth markets.
• In the quarter, Bumble brought a wide portfolio of discovery-oriented products to the market.

• Back on the 8 September, payment provider Tyro Payments (TYR AU) rejected a proposal from a Potentia-led consortium at A$1.27/share, by way of a Scheme. 
• Tyro has now announced it has received approaches from several parties, including Westpac (WBC AU). “None of these approaches are sufficiently definite … to warrant further disclosure at this time“.
• Shares are currently trading at A$1.59/share. Tyro recently raised its FY23 EBITDA guidance to A$28mn-34mn, up from A$23mn-29mn. 

• PT Global Digital Trade (1437710D IJ)  (BliBli) aims to raise up to US$530m in its Indonesian IPO.
• BliBli provides e-commerce services across Indonesia to both retail consumers and institutions
• In this note, we’ll talk about the positive aspects of the deal.

• Netmarble did a one-year rollover for the stock loan used for the SpinX acquisition. The maturity is again one year, and the principal amount is ₩1.5T.
• The HYBE stake is newly included as collateral at an estimated LTV ratio of 50% because the value of NCsoft’s stake further declined, and the LTV ratio was subsequently lowered.
• Applying the 140% loss cut ratio to HYBE and NCsoft will lead to a margin call when each stock declines 30% from the current price.

• We’ve been pessimistic on prospects for ARM and recent news flow and share price performance hasn’t helped but a decent report from TSMC eases some of our concerns
• Softbank needs high teens royalty revenue growth for ARM and TSMC as a bellwether (+30% for Q3 and Q4 guidance) is better than AMD or Nvidia
• We remain more conservative on valuation ($37bn) than Softbank assuming high single-digit growth and c. 43% EBITDA margins

• Blibli (1437710D IJ), a leading Indonesian e-commerce player, has launched an IDR8.2 trillion (US$530 million) Indonesian IPO. Bookbuilding is from 17 to 24 October.
• In Blibli IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.  
• The key elements of the bear case rest on weak sector sentiment, an unclear path to profitability, and credible long-term funding to support the high cash burn.  

• Blibli (1437710D IJ), one of Indonesia’s leading e-commerce platforms is looking to raise around $470-530m via an IPO on Indonesia Stock Exchange.
• Looking at Shopee’s struggles in the past year and Bukalapak’s rapid fall following the IPO, we think investors are unlikely to be interested in the Blibli IPO.
• This could mean that Blibli’s days are numbered as it is resting all hopes on the IPO to fund its short-term loan repayment obligations.

• Tyro Payments (TYR AU) confirmed that it has “received approaches from several parties expressing interest in a potential change of control transaction, including Westpac Banking (WBC AU).”
• Tyro previously rejected a A$1.27 offer from the Potentia consortium. Grok’s get-out clause with Potentia sets the floor price of a competing bid at A$1.52 per share.
• The last close of A$1.59 is higher than the floor price. Triangulating the value of a rival bid across several data points suggests a competing offer of around A$2.

• Viavi had a strong performance in the final quarter of its fiscal year 2022 and the company delivered an all-around beat.
• For fiscal Q4 2022, the SE business’s revenue was constant from year to year.
• Strong NE bookings during the fiscal fourth quarter led to a seasonally stronger Q1 backlog and demand visibility.

• Despite the heightened economic unpredictability, Cloudflare had a good quarter and managed to deliver an all-around beat.
• The company generated $234 million in sales in Q2, up 54% from the same period last year.
• They now have 1,749 customers that pay them more than $100,000 annually after recently adding 212 additional large customers.

• ARLO has the help of a product purchase agreement to smooth out lumpiness in consumer spending in the current macroenvironment
• While ARLO is targeting a higher income consumer with products that are priced higher than competition, there is still a risk that could have played out in September.
• Number of paid subscribers should continue to rise in the third quarter with possibility it could be materially higher than our forecast

• Blibli (1437710D IJ) is offering 17.77bn shares in its IPO at a price range of IDR 410-460/share. That could raise up to US$530m and value the company up to US$3.64bn.
• The stock will not get Fast Entry to the IDX30, LQ45, MSCI and FTSE indices, so no near-term support from passive buying.
• The stock could make it into the MSCI Small Cap Index in February and the FTSE All-World/All-Cap Index in June. Earliest inclusion in IDX30/IDX80/LQ45 indices could be in July.

• Blibli (1437710D IJ), a leading Indonesian e-commerce player, has launched an IDR8.2 trillion (US$530 million) Indonesian IPO. Bookbuilding is from 17 to 24 October.
• According to Frost & Sullivan, Blibli.com was No. 1 in the fresh food category and 1P consumer electronics in the B2C omnichannel among e-commerce players in Indonesia in 2021. 
• The key elements of the bull case rest on a large and growing addressable market, strong ecosystem, high order values, rising cohort spending and fast-paced growth. 

• On 17 October, the Korean government made a final official decision to have the BTS members serve in the mandatory military service.
• We believe this will have a major negative impact on the sales and profits of HYBE in the next several years.
• As a result of the Korean government formalizing the BTS members to enlist in the military, we believe that HYBE’s share price could fall more than 50% from current levels.

• Revenue growth rebounded in Q4 and was the best in six quarters as corporate sales accelerated, particularly in the medium business segment
• But EBITDA losses accelerated and whilst management says this is the peak quarter, this is the first time since 2019 that EBITDA excluding advertising costs was negative
• Guidance for Q4 is mixed with a conservative revenue target and a only a modest reduction in EBITDA losses

• Money Forward Q3 sales rose +42% YoY to Y5.5bn driven by corporate ARR (+54% YoY)
• Net sales, ARR, and EBITDA loss of -Y1.9bn all in line with company guidance
• Growth investment starting to pay off as Corporate Client acquisition rate DOUBLES

• Money Forward reported 3QFY11/2022 results. Revenue increased 42.2% YoY to JPY5.45bn (vs consensus JPY5.40bn) while adjusted op.losses further widened to JPY2.5bn vs JPY449m in the same period a year ago.
• Though top line growth has resumed following a slowdown in 2QFY11/2022, MF’s margins have further worsened with increased investment in advertising, staff and subsidies.
• MF’s share price fell almost 8% following earnings announcement as investors are concerned over deteriorating profitability.

• Roblox is proving out management’s assertion that bookings growth would reaccelerate in the back half of the year.
• The company extended its average user life from 25 to 28 months. Signal of falling churn.
• Roblox usage continues to dwarf all other social media; DAUs spend 2.5x more time per day than TikTok or Instagram users.

• Major milestones for Hon Hai’s EV platform could be unveiled at today’s Hon Hai Tech Day.
• Apple’s dropping of a key China supplier shows how international players may want to just avoid even non-restricted products from China.
• Senior semiconductor executives across the industry are halting work for China-based firms, including some leading Chinese execs.

• Price Movements: Bitcoin falls to its lowest level since 2020 following hot U.S. inflation print but stages modest recovery after. 
• Market Liquidity: Coinbase regains dominant BTC-USD market share. 
• Derivatives: Open interest on Binance plummets following dramatic price moves.