TMT/Internet

Saudi Arabia’s Savvy Games Group has a grand ambition to invest in the global gaming industry. It recently announced that it will invest US$37.8 billion in the global gaming industry.
There has been a sharp appreciation of the USD and Riyal versus JPY which could help to accelerate more M&As of Japanese game companies by SGG.
Saudi Arabia’s aggressive push to expand into the global gaming industry could aid this sector in the coming months as it could result in further major M&As in this sector.

China Internet Weekly (3Oct2022): Tencent, NetEase, Alibaba, Kuaishou, Uxin

By Ming Lu

The global game market can shrink in 2022, which will impact Chinese game companies’ global diversification.
NetEase formally launched its own social networking service to compete with Tencent.
Kuaishou announced that it would launch an e-commerce channel on its App’s homepage.

EQD | Tencent (700 HK): Time to Take off Hedges and Leverage up Using Options

By Simon Harris

Stock has fallen 17% since Sep 15th, and implied vols have picked up
The fundamentals remain strong and tech momentum may be shifting
We suggest two directional trades using options to play earnings

O2Micro’s “Reasonable” Homecoming Offer

O2Micro International (OIIM US), an integrated circuits play, has announced a definitive privatisation transaction.
The acquirer, led by the CEO and CFO of O2Micro, are offering US$5.00/ADS, a 68.9% premium to the undisturbed price.
The Offer requires shareholders representing at least two-thirds of O2Micro vote FOR. Roughly 30% of shares out appear to be supportive. This Offer is expected to close in the 1Q23.

O2Micro Enters into a Definite Privatisation Agreement at US$5.00 Per ADS

By Arun George

O2Micro International (OIIM US) entered into a definitive agreement for going private with FNOF Precious Honour Limited at US$5.00 per ADS, a 54.8% to the undisturbed price (17 March).
Shareholders representing two-thirds of shares present and voting need to approve the deal. The rollover shareholders represent 16.90% of voting rights.
The offer is attractive in the context of O2Micro’s weakening performance and grim market conditions. At the last close, the gross spread is 18.2%. Expect a 1Q23 deal close.

NTT (Buy) – Investor Day Highlights Global Data Center Business

By Kirk Boodry

NTT’s global data center business has 6% market share with annual revenue growth of 20% that is twice the industry average
We have updated our model and valuation summary to reflect the transfer of NTT Ltd, which operates the GDC business, into NTT Data
Our valuation remains unchanged although we have lowered our target price ¥4,500 to ¥4,450 for payment of the H1 dividend. NTT remains a top pick in our coverage

Mobileye Global IPO Preview

Mobileye Global (MBLY US) is getting ready for an IPO in the US in late 2022 at an expected market cap valuation of about US$30 billion.
Mobileye Global was acquired by Intel for US$15.3 million in 2017. Intel currently owns a 100% stake of the company’s outstanding common shares.
Mobileye has world-class technologies in the advanced driver assistance systems (ADAS) and autonomous driving technologies and solutions.

Taiwan Tech Weekly: Trying to Recover After a Week of Deep Declines

Taiwan’s tech space fell hard last week, with the tech sector down 5.4%, compared to a 4.9% drop for the overall market. Semiconductors performed the worst, down 6.2%.
Hon Hai, Delta, Lite-On — EV a major theme for the first-ever Taiwan Expo USA coming October 12th.
Taiwan wafer exports were at an all-time high in August. We note that wafer names have underperformed TSMC.

AXTI: The Fruit of a Preview

By Hamed Khorsand

Third quarter results could serve as an inflection point for AXT Inc. (AXTI) after the Company reported a rebound in gross margin in the second quarter
When AXTI reported second quarter results, management described a design win that would be part of a consumer electronic device with a feature in a higher end model
We believe the reference could have been to the iPhone 14 Pro and Pro Max having different a different display feature compared to the iPhone 14.

Sporting Crypto – October 3rd 2022: What does the Metaverse mean for Sports?

By Sporting Crypto

Anything that augments your physical life, to the digital, is in some way or form linked to what currently is, and what will become, ‘The Metaverse’.
So a Zoom call or a free world game — whilst they don’t wholly agree with the notion of interoperability or persistence —they still are in essence part of the Metaverse.
Now, to give further context, there is the idea of ‘Metaverses’ — aka, Decentraland, Sandbox or any company building their own virtual world.

💡 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

Oct 03

Daily Brief TMT/Internet: EVOC Intelligent Technology Company Limited H, Lionheart Studios, Vontier Corp and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

EVOC (2308 HK): 19 October H-Class Meeting. IFA Says Fair & Reasonable
Lionheart Studio IPO Valuation Analysis
Some new stocks

EVOC (2308 HK): 19 October H-Class Meeting. IFA Says Fair & Reasonable

The Composite Document for electronics play and property developer EVOC Intelligent Technology Company (2308 HK), has been dispatched. The EM and H-Class meeting will be held on the 19 October.
The Offer Price is HK$1.75/share. It will not be increased. No further dividends will be added.
This is done. Trading at a gross/annualised spread of 2.9%/34%.

Lionheart Studio IPO Valuation Analysis

Our base case valuation of Lionheart Studio is a target price of 19,362 won per share, which is 46% lower than the low end of the IPO price range.
Our IPO valuation assumes a 7.2x EV/EBITDA (comps’ average) using 2023 estimated EBITDA of 145 billion won for the company.
All in all, we believe there is a strong probability of Lionheart Studio being forced to lower its IPO price range in order to attract more investors.

Some new stocks

By Turtles all the way down

First one is Vontier, its main business is a duopoly in gas station equipment and software.
Repair tools for ICE vehicles. Software and hardware for car washes, and some smaller miscellaneous businesses.
Some of which they will divest for probably several $100 million in proceeds. And they have a piece in EV charging infrastructure as well.

💡 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

Oct 02

Daily Brief TMT/Internet: EVOC Intelligent Technology Company Limited H, Tencent and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

EVOC’s H Share Class Meeting on 19 October
ECM Weekly (2nd Oct 2022) – Onewo, Leapmotor, CALB, Socionext, WCP, Oyo, Ixigo, Tencent, Taiwan Cemt

EVOC’s H Share Class Meeting on 19 October

By Arun George

EVOC Intelligent Technology Company Limited H (2308 HK)‘s H Shareholders’ class meeting is scheduled for 19 October. The IFA considers the offer to be fair and reasonable.
The key conditions are approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders’ rejection). There is no minimum acceptance condition.
The offer is attractive and should gain approval. At last close and for a 7 November payment, the gross and annualised spread to the offer is 2.9% and 26.0%, respectively.

ECM Weekly (2nd Oct 2022) – Onewo, Leapmotor, CALB, Socionext, WCP, Oyo, Ixigo, Tencent, Taiwan Cemt

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, all listing this week failed to impress which means that the HK and Korean markets are probably in for a slow end of the year.
Taiwan Cement (1101 TT) and Embassy Office Parks REIT (EMBASSY IN) were the two large placements this week. We also looked at possible Tencent (700 HK) linked blocks.

💡 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

Oct 01

Daily Brief TMT/Internet: Softbank Group, Redington India, Lionheart Studios, Nanya Technology, iShares MSCI ACWI ex US ETF and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Softbank Group – Vision Fund Losses Accelerate into Quarter End
Redington (India) Ltd: Forensic Analysis
Lionheart Studio IPO Preview
Nanya Tech: Micron Results, Light at the End of the Tunnel? Shares Rise
MSCI ACWI Ex-US, EAFE Testing Downtrend Channel Supports — Bounce Potential

Softbank Group – Vision Fund Losses Accelerate into Quarter End

By Kirk Boodry

Valuation losses in the Vision Fund public portfolio are now approaching $5bn as the end of the quarter looms versus break-even as recently as 13 September
That may have influenced the level of VF staff reductions which press reports ut at 30% versus expectations of 20% last month
The discount remains elevated on tech weakness and that is unlikely to change

Redington (India) Ltd: Forensic Analysis

By Nitin Mangal

Redington India (REDI IN)‘s primary business pertains to distribution of Information Technology,mobility and other technology products. The company also is engaged in supply chain solutions and after sales services.
Although company has a strong business, a glance at the balance sheet and financials reveals some concerns particularly at the subsidiary level which should not be ignored.
Forensic discomforts revolve around goodwill, poor earnings quality, instances of margin flirting, branch audit not being carried out by statutory auditors, etc.

Lionheart Studio IPO Preview

Lionheart Studio is getting ready to complete its IPO in November 2022. Lionheart Studios is the second largest IPO in Korea after LG Energy Solution (373220 KS) in 2022.
The IPO offering amount is 410 billion won to 604 billion won. This would also suggest implied market cap of 3.1 trillion won and 4.5 trillion won.
A key investment risk for the company is its excessive reliance on one game (Odin: Valhalla Rising) for its revenue and profits.

Nanya Tech: Micron Results, Light at the End of the Tunnel? Shares Rise

Micron’s near-term guidance implies that consensus estimates likely need to come down for both Micron and Nanya Tech.
However, Micron indicated that they expect supply/demand balance to improve in 2023E.
There could be more negative industry news to come, however Nanya Tech has a very strong balance sheet to weather some weak quarters and is trading at trough-type valuations.

MSCI ACWI Ex-US, EAFE Testing Downtrend Channel Supports — Bounce Potential

By Joe Jasper

Many major indexes have broken below critical supports, including MSCI ACWI (ACWI-US), EURO STOXX 50, STOXX Europe 600, and the DAX.
Odds suggest a bearish downside continuation, and a bearish outlook is appropriate as long as the YTD downtrend remains intact on the ACWI-US, MSCI ACWI ex-US (ACWX-US), and EAFE (EFA-US).
There is bounce potential given these broad global indexes are testing their respective downtrend channel supports, but the fact remains that they are in downtrends, a major problem longer-term.

💡 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

Sep 29

Daily Brief TMT/Internet: Bilibili, Jasmine International PCL, Appier Group, Delta Electronics, SK Telecom, Unity Software Inc, Roku, Qorvo Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Bilibili (9626 HK): Implications of Dual Primary Listing
Soon-To-Be Cashed-Up Jasmine After Broadband Sale
Appier (4180) | Five Reasons to Remain Bullish
Delta Taiwan Vs. Thailand Pairs Monitor: SET50 Index Driver, But Taiwan Margins Always Higher
Launch of KRX/S&P ESG High Dividends Index
Unity Software: The AppLovin Acquisition Story & Other Developments
Roku Inc: The Buzz & Other System Enhancements
Qorvo Inc: New Launches & Other Developments

Bilibili (9626 HK): Implications of Dual Primary Listing

By Brian Freitas

Earlier today, Bilibili (9626 HK) announced the voluntary conversion of its Secondary Listing on the HKEX (388 HK) to a Dual Primary Listing effective 3 October.
Though the timing is tricky, this could result in the stock not being deleted from the Hang Seng China Enterprises Index (HSCEI INDEX) at the December rebalance.
This could also lead to inflows at the December rebalance from Hang Seng China Enterprises Index (HSCEI INDEX) and Hang Seng Tech Index (HSTECH INDEX) trackers.

Soon-To-Be Cashed-Up Jasmine After Broadband Sale

Jasmine International (JAS TB) is in the home straight to sell its 99.8% interest in Triple T Broadband (TTTBB), and 19% stake in Jasmine Broadband Internet Infrastructure Fund (JASIF TB).
With Bt 32.4bn in proceeds coming through the door, JAS would have net cash of ~Bt 24.8bn against a current market cap of ~Bt 24bn.
This sounds like a situation worth a second look. So I look.

Appier (4180) | Five Reasons to Remain Bullish

By Mark Chadwick

Appier provides AI software that helps large enterprises to grow and monetize their customer base.
Using Appier’s AI analysis tools, brands can automate the way they interact with shoppers and create new business models more efficiently
Business is booming, it is sheltered from macro headwinds and the TAM is expanding aggressively as Appier expands into key US/EMEA markets

Delta Taiwan Vs. Thailand Pairs Monitor: SET50 Index Driver, But Taiwan Margins Always Higher

Since 2Q22 results end-July, Delta Thailand has risen 31% compared to a 3% rise for Delta Taiwan and a 2% rise for Thailand’s SET Index.
Delta Taiwan’s gross margin has historically been consistently higher than Delta Thailand’s. Delta Thailand is a significant licensor of IP from its parent, which could be one reason.
Historical data shows that the relative valuation can swing back over time and the current divergence of Delta Thailand vs. Delta Taiwan is historically extreme.

Launch of KRX/S&P ESG High Dividends Index

KRX plans to launch KRX/S&P ESG High Dividends Index on 4 October. This index will be composed of stocks in KOSPI 200 which have high dividend yields and ESG scores.
We provided a list of 20 stocks in KOSPI with high dividend yields with at least 500 billion won in market cap and those that have higher ESG scores.
Amid a major downturn in the global stock markets, there is a greater emphasis on the preservation of capital and increasing capital allocation to higher dividend yielding stocks.

Unity Software: The AppLovin Acquisition Story & Other Developments

Unity Software has been in the news for a number of reasons be it the ironSource acquisition or the management’s rejection of Applovin’s $20 billion acquisition offer.
While Unity did surpass Wall Street expectations with respect to revenues, the company’s losses were wider than anticipated.
On Oculus Quest, Unity Games accounted for 72% of the top-selling games and 80% of the top-performing VR games in July.

Roku Inc: The Buzz & Other System Enhancements

Roku is witnessing a slow period as a significant slowdown is seen in TV advertising spending because of the macroeconomic environment that is pressuring the platform business growth of Roku in the short term.
However, the active accounts of the company and the TV advertising market share of the company continue to increase.
Roku remains differentiated by its unique assets, proprietary Roku TV OS, innovative advertisement platform for connected TV, and The Roku Channel.

Qorvo Inc: New Launches & Other Developments

By Shifara Samsudeen, ACMA, CGMA

Qorvo delivered a strong performance in the last quarter with an all-around beat.
For Matter-enabled applications, Qorvo launched an innovative development kit for the connected and gateway devices.
Qorvo also received its foremost production order for the antenna solution that is MEMS-based in support of the high-end gaming smartphone.

💡 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

Sep 28

Daily Brief TMT/Internet: Tencent, Delta Electronics Thai, IndiaMart, Nintendo, Nanya Technology, Top Material, DB Hitek Co., Ltd., Liberty Global Plc Lilac Class C, Lyft Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Tencent Investee Selldown – The US$120bn Global Overhang
SET50 Index: Market Consultation & DTAC/TRUE Merger Impact
Indiamart Intermesh Ltd- Forensic Analysis
Tencent Increases Its Investment in Medical and Healthcare
Nintendo (7974) | Beware of Cycles
Nanya Tech: Valuation Backtest Implies Upside, Potential Catalyst Thursday
Top Material IPO Valuation Analysis
Minority Shareholders Convince DB Hitek to Stop a Company Split
Lets Talk About LILAK
Lyft Inc: Marketing & Advertising Unit & Other Drivers

Tencent Investee Selldown – The US$120bn Global Overhang

By Sumeet Singh

Multiple new agencies have been reporting that Tencent (700 HK) plans to trim its investment portfolio over the remainder of the year.
The reports have been coming in since the second half of the year and the company has been duly denying these rumors.
In this note, we look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how.

SET50 Index: Market Consultation & DTAC/TRUE Merger Impact

By Brian Freitas

The SET has commenced a market consultation on lowering the turnover ratio level from 5% to 2% while selecting stocks to be added to and deleted from the SET50 INDEX.
The change to the turnover ratio level could lead to three changes in December that result in one-way turnover of 7.44% and in a one-way trade of THB 6.79bn.
Separately, the Total Access Communication (DTAC TB) / True Corp Pcl (TRUE TB) merger could result in an ad hoc inclusion prior to the regular rebalance in December.

Indiamart Intermesh Ltd- Forensic Analysis

By Nitin Mangal

IndiaMart (INMART IN)‘s annual report analysis highlights some of the issues that should not be overlooked.
In addition to changes in important disclosures, the company still continues to see less flow-through of deferred income into revenues.
On the assets side, it should be noted that the strategic investments are yet to show any promise, while fixed assets show some concerns including non-verification, disposals, etc.

Tencent Increases Its Investment in Medical and Healthcare

Tencent known to outspend its peers on strategic investments, has made only around 80 investments and acquisitions so far this year compared to more than 200 deals done in 2021.
Tencent’s vast investment portfolio has attracted regulatory scrutiny and it’s the market’s belief that Tencent was asked to divest some of its stake in other leading tech players in China.
However, over the last few months, Tencent has been increasingly investing on companies operating in the medical field.

Nintendo (7974) | Beware of Cycles

By Mark Chadwick

Nintendo’s stocked recently popped on two positive developments – Splatoon 3 sales set a record for a Switch game & Nintendo Direct announced the release date of Legend of Zelda
Switch life cycle is coming to an end. The cycle had been extended by Covid and supply issues for Sony PS5
Nintendo’s stock is cheap, defensive and pays a reasonable dividend, but catalysts are running out and the stock will likely follow revenues lower

Nanya Tech: Valuation Backtest Implies Upside, Potential Catalyst Thursday

We estimate that Nanya Technology has the highest level of net cash as a percent of its market cap in its history and it is trading well below 1x PBV.
The median 6-month total shareholder return has been 40.5% for instances since 2012 when Nanya Tech has traded below 1.0x PBV.
Micron’s results this Thursday will provide color on Nanya’s outlook and could be a catalyst.

Top Material IPO Valuation Analysis

Our base case valuation of Top Material (360070 KS) is a target price of 37,965 won per share, which is 33% higher than the mid-point of the IPO price range.
Given the solid upside, we have a Positive view of the IPO. Our base case valuation is based on 25.6x P/E using our estimated net profit in 2022.
We estimate the company to generate sales of 73.7 billion won (up 131.1% YoY) and operating profit of 14.1 billion won (up 190.3% YoY) in 2022.

Minority Shareholders Convince DB Hitek to Stop a Company Split

On 26 September, DB Hitek Co., Ltd. (000990 KS) announced that it will stop the proposed split-off of its semiconductor design business.
This move to stop the company split comes after numerous minority shareholders banded together to stop this move which could have a negative impact on DB Hitek.
Overall, we believe DB Hitek’s decision to stop the company split driven by the campaigns from the minority shareholders is likely to have a positive impact on the company.

Lets Talk About LILAK

By Superfluous Value

Lyft Inc: Marketing & Advertising Unit & Other Drivers

By Shifara Samsudeen, ACMA, CGMA

After a sharp correction, Lyft saw a recovery in the stock price and its results justified the same.
Rideshare rides were up 27% year over year, and both active riders and rides have reached post-COVID highs.
A mixture of new and seasoned drivers contributed to the largest number of active drivers in the past two 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

Sep 27

Daily Brief TMT/Internet: CALB, Xiaomi Corp, Advanced Info Service, Taiwan Semiconductor (TSMC), Socionext, Synopsys Inc, STEPN, DocuSign Inc, BlackBerry Ltd and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

CALB (3931 HK) IPO: Earliest Passive Flows & Stock Connect Inclusion in 2023
Xiaomi: Margins to Remain Under Pressure with Premiumisation and Investment in EV (Quantamental)
Intouch: AIS’ Expanding Broadband And Expected Mobile Duopoly
Taiwan Tech Weekly: Micron Forecasts This Week, Intel Conference, AMD CEO to Visit Taiwan Suppliers
Socionext IPO – Ample Upside Even After Discount
Synopsys Inc.: Initiation of Coverage – Strong Market Position & Other Drivers
Sporting Crypto – STEPN Turns 1 Year Old — Beyond The Hype
DocuSign Inc: Contract Lifecycle Management In Slack & Other Drivers
BlackBerry Inc: The Cylance Gateway & Other Drivers

CALB (3931 HK) IPO: Earliest Passive Flows & Stock Connect Inclusion in 2023

By Brian Freitas

CALB (3931 HK) is looking to raise between US$1.29bn-US$1.73bn by selling 265.85m shares at a price range of HK$38-51/share.
CALB (3931 HK) will not get Fast Entry to any indices but should be added to the HSCI and Stock Connect in March and to the FTSE All-World in June.
Peer performance has been fairly mixed in the recent past. Stock trading weak post listing could provide buying opportunities ahead of the passive inflows.

Xiaomi: Margins to Remain Under Pressure with Premiumisation and Investment in EV (Quantamental)

Xiaomi Corp (1810 HK) share price has declined more than 50% over the last 12-months from HK$22.1 to HK$9.46.
In the meantime, the company’s earnings also have weakened with resurgence of Covid-19 in China alongside decline in demand for smartphones in Europe and other markets.
Xiaomi has entered into the premium smartphones segment which has negatively impacted the company’s margins due to aggressive expansion of offline stores.

Intouch: AIS’ Expanding Broadband And Expected Mobile Duopoly

Jasmine International PCL (JAS TB)‘s shareholders approved Advanced Info Service (ADVANC TB) acquiring its subsidiary Triple T Broadband, and to buy 19% of Jasmine Broadband (JASIF TB).
The deal, involving a total outlay of Bt32.4bn, remains subject to approval from JASIF unitholders and NBTC. AIS’ current market cap is Bt574bn.
Separately, the DTAC / True merger looks set to become a reality as it, ironically, does not require NBTC approval. A merger would create a duopoly and ultimately benefit AIS.

Taiwan Tech Weekly: Micron Forecasts This Week, Intel Conference, AMD CEO to Visit Taiwan Suppliers

Micron’s outlook for next quarter’s margin will be key, provides good color on future margin for key Taiwan names
Intel conference could be catalyst for Intel Long/Short, CEO will be giving a keynote on company’s new direction
AMD meeting many Taiwan-listed companies, Hon Hai EV platform closes new deal in Indonesia

Socionext IPO – Ample Upside Even After Discount

By Clarence Chu

Socionext (6526 JP) is looking to raise up to US$463m in its Japan IPO.
Socionext is a fabless semiconductor provider which commenced operations after integrating the system on a chip (SoC) businesses of Fujitsu Semiconductor Limited and Panasonic Holding Corporation.
In this note, we will look at the updated deal dynamics, our earlier assumptions, and share our thoughts on valuation.

Synopsys Inc.: Initiation of Coverage – Strong Market Position & Other Drivers

This is our first report on software and design player, Synopsys.
For instance, they automate entire sub-processes in chip design in addition to individual design steps.
Their preloaded IP blocks not only expedite chip design but also allow architects to experiment quickly with innovative chip and system configurations tailored to specific markets.

Sporting Crypto – STEPN Turns 1 Year Old — Beyond The Hype

By Sporting Crypto

GMT, The STEPN governance token, has tumbled from ~ $4.00 in May 2022 to $0.60 in September 2022. An 85% drop.
This is basically akin to the company’s equity… kind of…not really — but it’s a good way to explain things without getting complicated.
It has crashed like much of the Crypto market (heck, much of the market in *general*?).

DocuSign Inc: Contract Lifecycle Management In Slack & Other Drivers

DocuSign has been among the worst hit hyper-growth plays in the recent correction over the past few months.
The company’s results have not been too bad during the phase and it delivered yet another all-around beat.
The focus of DocuSign on partner expansion involves an innovative integration with Stripe that will enable the users to view Stripe payments and DocuSign agreements side-by-side.

BlackBerry Inc: The Cylance Gateway & Other Drivers

Blackberry’s stock has corrected sharply in the past weeks though the company’s result was not too bad.
The management continues to execute the business momentum quite well, delivering sturdy year-over-year growth in revenue.
From the professional services and preproduction development seats, Blackberry recorded strong revenue and it gained overall 14 new design wins.

💡 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

Sep 26

Daily Brief TMT/Internet: DB Hitek Co., Ltd., Meta Platforms (Facebook), Ethereum and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

New Pricing Rule for Appraisal Rights in ECO: Potential Arb Openings in DB Hitek
Meta Platforms ($META)
Interoperability

New Pricing Rule for Appraisal Rights in ECO: Potential Arb Openings in DB Hitek

By Sanghyun Park

A South Korean lawmaker introduced legislation that would mandate that appraisal right exercise prices in split-off listings (equity carve-out) be based on asset/earnings value rather than market price (stock price).
We may find an arb opening in DB Hitek. The appraisal price based on the asset/earnings value is at an 11.31% premium to the last close.
If DB HiTek postpones the split-off listing to next year, FY22 earnings should be reflected. In this case, the appraisal price will be at a 90% premium.

Meta Platforms ($META)

By MT Capital

The technology sector is full of polarizing personalities, many of whom stand at the helm of some of the largest companies in the world.
Whether that be with the brash antics and lofty ambitions of Elon Musk, the undoubtable brilliance tainted by Bitcoin Maximalism exhibited by Jack Dorsey, the SEC-challenging twitter threads blasted by Brain Armstrong, or the naivety potentially falsely portrayed by Vlad Tenev, there is no shortage of individuals that, love or hate, you can’t help but pay attention to.
Mark Zuckerburg is one of those people. The man that steers the ship of of Metaverse has clear technical aptitude, a far-cry away from the resume full of consulting experience and MBAs possessed by a lot of modern c-suite executives.

Interoperability

By Etherbridge

Interoperability is a fascinating topic. It is a concept applicable to different systems worldwide, from communication systems, hardware and technology to groups of people.
We use interoperable systems every day; it is also often a background function, so many people do not even realise they are interacting with them.
Nevertheless, they have allowed many of our current systems to work seamlessly, including our internet and mobile devices.

💡 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

Sep 24

Daily Brief TMT/Internet: CALB, Softbank Group, NVIDIA Corp, Fiserv Inc, PTC Inc, On Semiconductor, Nutanix Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

CALB IPO – Low-End Appears Reasonable but Will Still Need Some Charging Support
Softbank – So The Arm IPO Isn’t Looking All That Hot Then?
Breaking Growth Short Candidates: Outset Med., NVIDIA, Intuitive Surgical, Plug Power
CALB IPO Valuation Analysis
Fiserv Inc: Detailed Credit Analysis & Financial Strength Evaluation Report, Key Risks (09/2022)
Fiserv Inc: Initiation of Coverage – Portfolio Expansion & Other Key Drivers
PTC Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report, Key Risks (09/2022)
ON Semiconductor Corporation- Initiation of Coverage – Capacity Expansion & Other Drivers
Nutanix Inc.: Initiation of Coverage – Financial Forecasts
PTC Inc.: Initiation of Coverage – The Intland Software Acquisition & Other Drivers

CALB IPO – Low-End Appears Reasonable but Will Still Need Some Charging Support

By Sumeet Singh

CALB aims to raise up to US$1.7bn in its Hong Kong IPO.
CALB undertakes design, R&D, production and sales of EV batteries and Energy Storage Systems (ESS) products.
In this note, we will run the deal through our ECM framework and talk about IPO pricing.

Softbank – So The Arm IPO Isn’t Looking All That Hot Then?

By Mio Kato

Apparently prospects for a high valuation on a potential Arm IPO are so staggeringly, AI-rifically good that Masayoshi Son is now sounding out Samsung on a strategic partnership.
Samsung itself has not been having the greatest time of late with Micron and SK Hynix making serious inroads against its prior technological leadership in memory.
So as desperate and desperate-er ponder an alliance we can only be thoroughly convinced that this move absolutely, positively has nooooothing to do with trying to prop up share prices.

Breaking Growth Short Candidates: Outset Med., NVIDIA, Intuitive Surgical, Plug Power

By Eric Fernandez, CFA

This model looks for slowing growth, margin declines, sales and/or earnings disappointments, troubling working capital trends, poor estimate trends or lowered guidance, among other characteristics.
The key judgement is whether a slowdown is temporary or the beginning of a trend. These shorts tend to have high valuations and betas. Multiple compression accelerates the stock’s decline.
Today we are flagging Outset Med., NVIDIA, Intuitive Surgical, Plug Power

CALB IPO Valuation Analysis

CALB (3931 HK) is getting ready to complete its IPO in early October in Hong Kong. The IPO price range is between HK$38 and HK$51 per share.
Based on our valuation sensitivity analysis, our base case valuation of CALB is HK$53 per share, which is 20% higher than the mid-point of the IPO price range.
CALB has a rare combination of surging sales growth rate, operating profitability, and increasing market share in the EV battery market globally.

Fiserv Inc: Detailed Credit Analysis & Financial Strength Evaluation Report, Key Risks (09/2022)

Fiserv is a major global provider of fintech solutions related to payments, account processing, e-commerce, digital banking solutions, card issuer processing, and cloud-based Point-of-Sale solutions.
Some recent client wins include Wawa, a large chain of gas stations and convenience stores, Indian Oil Corporation, and, Great Southern Bank.
The company is transforming from selling merchants’ solutions for individual points to offering operating systems: Carat for large enterprises and Clover for medium and small-sized merchants.

Fiserv Inc: Initiation of Coverage – Portfolio Expansion & Other Key Drivers

This is our first report on Fiserv, a major global provider of fintech solutions related to payments, account processing, e-commerce, digital banking solutions, card issuer processing, and cloud-based Point-of-Sale solutions.
The company delivered a strong quarterly result, surpassing Wall Street expectations on all counts with a strong organic revenue growth.
The global active merchants’ accounts of the company grew.

PTC Inc.: Detailed Credit Analysis & Financial Strength Evaluation Report, Key Risks (09/2022)

PTC is an emerging software company that operates in the rather competitive domains of computer-aided design (CAD), product lifecycle management (PLM), application lifecycle management (ALM), and service lifecycle management (SLM).
The company had a rough third quarter and delivered a significantly below par result in terms of both, revenues and earnings.
Its Windchill+ is still in the early stages of the SaaS transformation which was a slowing factor though PTC had a decent SaaS quarter for Windchill, thanks mostly to a decent mix of SaaS in new projects.

ON Semiconductor Corporation- Initiation of Coverage – Capacity Expansion & Other Drivers

This is our first report on ON Semiconductor Corporation, a well-known provider of intelligent sensing and power solutions.
The management has streamlined their product line by eliminating price-sensitive products in favour of fiercely competitive Intelligent Power and Sensing Solutions.
Because of the solutions’ strong performance, the depth of their intelligent power and sensor portfolio, and end-to-end manufacturing capabilities, their clients select ON Semiconductors as a strategic partner to support their long-term technology roadmaps.

Nutanix Inc.: Initiation of Coverage – Financial Forecasts

This is our first report on enterprise cloud platform provider, Nutanix.
The company’s Nutanix Cloud Platform users increased their use of it in the fourth quarter and expanded their adoption of related solutions in fields like storage, Database as a Service, and cloud management.
In contrast, they are standardizing Nutanix database service for maintaining and deploying their databases throughout their enterprise.

PTC Inc.: Initiation of Coverage – The Intland Software Acquisition & Other Drivers

This is our first report on PTC, an emerging software player in the computer-aided design (CAD), product lifecycle management (PLM), application lifecycle management (ALM), and service lifecycle management (SLM) space.
The company had a rough third quarter and delivered a significantly below par result in terms of both, revenues and earnings.
Its Windchill+ is still in the early stages of the SaaS transformation which was a slowing factor though PTC had a decent SaaS quarter for Windchill, thanks mostly to a decent mix of SaaS in new projects.

💡 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

Sep 22

Daily Brief TMT/Internet: Link Administration, Twitter Inc, Total Access Communication, Softbank Group, Xperi, Teradyne Inc, Five9 Inc, F5 Networks Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

But Wait … Even More Penalties In The Link Admin/D&D Situation
Twitter V. Elon V Twitter: Elon Finally Hits A Vein
True/DTAC Pop As Council Of State Rules NBTC Has No Teeth
Softbank Group – A Surplus of VC Cash Could Re-Energize Vision Fund’s Investment Pace
DTAC/True Merger: Council of State’s Decree Paves the Way for Completion
XPER: Unlocking Value Thru Separation
Teradyne Inc: Initiation of Coverage – Business Strategy & Key Drivers
Five9 Inc: Initiation of Coverage – Partnership With Kyndryl & Other Drivers
F5 Inc: Initiation of Coverage – Business Strategy & Key Drivers

But Wait … Even More Penalties In The Link Admin/D&D Situation

Earlier this week, Link Administration (LNK AU) rejected Dye & Durham’s revised proposal to factor in any redress payments from the UK’s FCA in regards to the Woodford Fund.
FCA has now assessed an appropriate penalty of £50mn in addition to the previously announced restitution payment of £306.1mn.
The FCA is all but telegraphing it will default LFSL unless Link steps in. Link says it has made no such commitment. D&D should walk.

Twitter V. Elon V Twitter: Elon Finally Hits A Vein

By Vicki Bryan

Bondholders on alert as a whistleblower complaint gives Elon’s case the substance he lacked as he tries break his agreement to buy Twitter
But this doesn’t win Elon’s case—he has to prove deliberate fraud, which is far from clear
It’s much easier for Twitter to prove Elon’s biggest complaint is buyers’ remorse—which isn’t sufficient grounds to terminate the deal.

True/DTAC Pop As Council Of State Rules NBTC Has No Teeth

According to media reports, Thailand’s Council of State has ruled the NBTC has no authority to approve or reject the True Corp (TRUE TB) / Total Access Communication (DTAC TB) merger.
The NBTC can prescribe measures to govern the deal but these appear almost of no consequence.
The ruling is a positive development for the merger getting over the line. Both stocks enjoyed strong gains today.

Softbank Group – A Surplus of VC Cash Could Re-Energize Vision Fund’s Investment Pace

By Kirk Boodry

News reports indicate venture capital firms are sitting in cash reserves 2x normal levels and that needs to be put to work
We expected a narrowing of public v private valuation levels was needed for Softbank to pivot from recent defensive but competition for deals may be more relevant
Access to investment capital is easier after settling of Alibaba-linked derivative contracts and Softbank has showed as recently as 2020 asset sales that it can lever up quickly

DTAC/True Merger: Council of State’s Decree Paves the Way for Completion

By Arun George

The press reports that the Council of State has stated that the regulator, NBTC, can only prescribe measures to govern the Total Access Communication (DTAC TB)/True Corp Pcl (TRUE TB) merger.
The Council of State decree paves the way for the merger to complete and the launch of the VTOs. The NBTC remedial measures will likely focus on consumer protection measures.
The current share price ratio is 9.150x vs the swap ratio of 10.221x. At last close, DTAC and True’s gross spread to the VTO price is 4.4% and 1.8%, respectively.

XPER: Unlocking Value Thru Separation

By Hamed Khorsand

XPER held an investor day to highlight the two businesses XPER would separate into on October 1, 2022.
The expectation is the two companies operating separately would be able to grow faster without worries over customer relationship to the other segment.
Xperi has been the underpinning of our investment thesis due to the investments the Company has made in different products and customer engagements.

Teradyne Inc: Initiation of Coverage – Business Strategy & Key Drivers

This is our first report on Teradyne, a leading global supplier of automation equipment for the testing of semiconductors, wireless products, data storage and complex electronics systems.
In comparison to the previous year, industrial automation, wireless test, and system test revenues grew for Teradyne.
Teradyne is lowering its shipment plan to align with reduced mobility-related test demand, continued supply shortages, and slower industrial automation growth.

Five9 Inc: Initiation of Coverage – Partnership With Kyndryl & Other Drivers

This is our first report on Five9, a leading provider of cloud software for contact centers.
The company’s core Virtual Contact Center (VCC) cloud platform has been a major revenue driver for them.
Among key updates, Five9, along with Kyndryl, announced a partnership to offer its customers a cloud-enabled, personalized contact center experience.

F5 Inc: Initiation of Coverage – Business Strategy & Key Drivers