TMT/Internet

This is our first report on cloud-based solutions provider, GoDaddy.
The company is one of the largest players in the domains, hosting and other related cloud-based solutions space across the globe.
This quarter, the company launched its beta WooSaas solution, allowing it to reach larger customers.

GoDaddy Inc: Detailed Credit Analysis & Financial Strength Evaluation Report

GoDaddy is a cloud-based solutions provider and one of the largest players in the domains, hosting and other related cloud-based services.
The company is currently facing a challenging forex environment but this has not stopped them from delivering a positive result.
This quarter, the company launched its beta WooSaas solution, allowing it to reach larger customers.

Trimble Inc: Detailed Credit Analysis & Financial Strength Evaluation Report

Trimble Inc is a well-known player in the agri-tech space.
The company has gone through its fair share of corporate restructuring with a series of acquisitions and divestments.
On execution, Trimble continues to simplify its portfolio through actions like decreasing the number of product offerings and part numbers.

Trimble Inc: Initiation of Coverage – The Bilberry Acquisition & Other Drivers

This is our first report on agri-tech player, Trimble Inc.
The company has delivered a robust set of results this quarter with growth in total revenue and gross margin, with excellent progress seen on the Trimble Construction One offering.
From the perspective of capital allocation, Trimble has divested 5 businesses where the revenue was more than 90%.

Motorola Solutions Inc: Initiation of Coverage – Revenue Stickiness & Other Drivers

This is our first report on communications specialist, Motorola Solutions.
In services and software, Motorola’s revenue was up highlighted by robust software growth.
Motorola Solutions recently went on to acquire Videotec S.p.A, the global supplier of the ruggedized video security solutions.

Motorola Solutions Inc: Detailed Credit Analysis & Financial Strength Evaluation Report

Motorola Solutions is a renowned communications and analytics player and has a strong market position particularly in the land mobile radio (LMR) communications domain.
In the SI and product segments, continued strong order demand in both Video and LMR drives a high level of backlog.
Motorola strengthened its video portfolio with its acquisitions of Callipsa, which brought the company advanced cloud-native video analytics.

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Sep 20

Daily Brief TMT/Internet: Link Administration, Taiwan Semiconductor (TSMC), Meituan, Ethereum, Broadcom Limited, Uber, Hewlett Packard Co, Autodesk Inc, Match Group Inc, Zscaler and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Link’s On Again-Off Again Scheme Is All but Off
Taiwan Tech Weekly: Biden Says US Will Defend Taiwan, Texas Instruments Gives Hope
Meituan (3690 HK): User Base Beating Competitor, Industry Recovering, Upgrade to Hold
Post-Merge Market Mayhem
Broadcom Inc: Collaboration With Dell & Other Drivers
Uber Technologies: AV-Based Food Delivery Pilot & Other Developments
HP Inc.: Weakened Macro & Other Developments
Autodesk Inc: Introduction of AutoCAD Web & Other Drivers
Match Group: The League Acquisition & Other Drivers
Zscaler Inc: New Feature Additions

Link’s On Again-Off Again Scheme Is All but Off

Dye & Durham/DND has proposed a revised Link Administration (LNK AU) offer to address any FCA redress payments. Around A$1.00 per share will hang on the outcome of the FCA investigation.
The Link Board has said it cannot recommend the revised proposal based on value, structure and alternatives available to Link. We agree with the Board’s view.
The scheme is all but dead. The shares are now a back-end play and remain attractive for value investors.

Taiwan Tech Weekly: Biden Says US Will Defend Taiwan, Texas Instruments Gives Hope

By Vincent Fernando, CFA

Biden makes the most definitive statement to date that the US will defend Taiwan.
Texas Instruments hikes dividend, annouces additional buyback. Will other cash rich semiconductor stocks follow suit?
Intel vs. TSMC/UMC Trade Monitor: We look at performance streaks for the pairs. Intel outperforming over the last trading sessions.

Meituan (3690 HK): User Base Beating Competitor, Industry Recovering, Upgrade to Hold

By Ming Lu

In July, Meituan’s user base exceeded Ele.me and Ele.me’s active user base decreased by 24% YoY.
In China, Monthly active user bases of local life and food delivery recovered from May to July.
We believe Meituan’s stock has only a downside of 6% for year end 2023.

Post-Merge Market Mayhem

By Kaiko

Price Movements: ETH is down 25% on the week despite the successful completion of the Merge.
Market Liquidity: The U.S. dollar remains the dominant fiat currency in crypto, possessing 70% of total fiat trade volume.
Derivatives: ETH funding rates have returned to neutral after dipping to all time lows of less than -0.4%.

Broadcom Inc: Collaboration With Dell & Other Drivers

Broadcom reported an all-around beat in the quarter with an increase in revenues in semiconductor solutions and infrastructure software.
Service and cloud provider growth remained strong in the quarter, driven by infrastructural upgrades and data center build-outs.
As both enterprise and cloud data centers refresh, they continue to increase the adoption of the company’s Jericho, Trident, and Tomahawk switching silicon platforms.

Uber Technologies: AV-Based Food Delivery Pilot & Other Developments

Uber Technologies delivered a mixed quarterly result with revenues above expectations resulting from an increase in the annualized run rate and gross bookings.
The company failed to meet market expectations on the earnings front as a result of considerable forex challenges through it did generate a positive free cash flow.
The top-line growth of the company continues to be durable and the onboarding process has shown a significant improvement.

HP Inc.: Weakened Macro & Other Developments

HP Inc also had a significantly below par result along with its rival, Dell Technologies as the industry cycle has commenced its downward trend after the huge upswing during the pandemic.
The results of this quarter were impacted by macroeconomic challenges, which included a significant slowdown in consumer demand to geopolitical, currency, and inflation challenges.
Recently, the company introduced its HP Instant Ink for its small business and its innovative LaserJet Pro with HP+.

Autodesk Inc: Introduction of AutoCAD Web & Other Drivers

Autodesk reported a solid quarter in terms of revenue, free cash flow, and non-GAAP operating margin.
The end market’s demand remained strong for the company and it delivered another all-around beat.
Among key developments, Autodesk introduced AutoCAD Web, a new combined subscription to AutoCAD Web and AutoCAD Mobile from Autodesk with improved access to drawings.

Match Group: The League Acquisition & Other Drivers

Match Group had a weak quarter with a below-par growth in the total revenue that resulted in the company failing to meet Wall Street expectations.
The direct revenue of the company grew in the U.S with strength at Tinder, Chipsa, BLK, and Hinge.
Additions of Tinder payers came in addition, while the established brands of the company, including Match Infinity brands and Match, Plenty of Fish, OkCupid, and Meetic, declined more than 10% in total.

Zscaler Inc: New Feature Additions

Zscaler continued with its robust growth story and delivered yet another all-around beat in the recent result with 15% free cash flow margins, 63% year-over-year revenue growth, and a 54% year-over-year billing increase in the third quarter.
The company saw a considerable increase in Q3 in the number of new deals for $1 million or more across the most important customer sectors.
In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

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Sep 19

Daily Brief TMT/Internet: Link Administration, SK Telecom, ROBLOX Corp, Tencent and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Merger Arb Mondays (19 Sep) – Link Admin, Ramsay, Alliance, Genex, Moya, Singapore Medical, VNET
3Q Dividend Estimates of Those with SSF for Cash & Carry Arb in Korea
That’s It Then As Link Admin Rejects D&D’s Revised Terms
Roblox Analyst Day Observations
China Internet Weekly (19Sep2022): Tencent, NetEase, Meituan, Trip.com

Merger Arb Mondays (19 Sep) – Link Admin, Ramsay, Alliance, Genex, Moya, Singapore Medical, VNET

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
Highest spreads – Link Administration (LNK AU), Alliance Aviation Services (AQZ AU), 21Vianet Group (VNET US), Ramsay Health Care (RHC AU), Infomedia Ltd (IFM AU), Genex Power Ltd (GNX AU).
Lowest spreads – Nitro Software Ltd (NTO AU), Tyro Payments (TYR AU), Nearmap Ltd (NEA AU), MACA Ltd (MLD AU), Xiamen International Port H (3378 HK), Link Net (LINK IJ).

3Q Dividend Estimates of Those with SSF for Cash & Carry Arb in Korea

By Sanghyun Park

Juice for cash & carry arbitrage doesn’t seem like much. Several names in contango, but the basis widening isn’t at a sufficiently arb-tradable level.
Reverse cash & carry isn’t all that attractive either, but it certainly does offer more juice, even with borrow fees. Ssangyong C&E, SKT, Shinhan, and KB deserve our attention.
A bit uncertain is whether the pattern of “LONG Spot until ex-dividend and Conversion to Short” through cash & carry will repeat itself this time.

That’s It Then As Link Admin Rejects D&D’s Revised Terms

After 23 months of negotiations, various bids from various parties, culminating in a protracted on-again, off-again, negotiation with Dye & Durham, Link Administration (LNK AU) has called it a day.
D&D arguably did the right thing and tabled a revised proposal to account for any enforcement process after the UK’s FCA raised redress payments. Link has rejected the revised terms.
Link will now pursue an in-specie distribution of a minimum of 80% of Link’s shareholding in PEXA Group (PXA AU).

Roblox Analyst Day Observations

By Aaron Gabin

Roblox Analyst Day featured some interesting new initiatives around advertising and marketplace dynamics.
The company will launch a self serve advertising platform in 2023 that has the potential to be worth an incremental 20% of revenues and margin supportive.
The company is also allowing developers to start introducing scare items, and begin participating in the on-platform resale market.

China Internet Weekly (19Sep2022): Tencent, NetEase, Meituan, Trip.com

By Ming Lu

Tencent and NetEase received new licenses from the authorities more than a year.
Meituan’s car-hailing service joined Tencent WeChat’s traffic platform, Tencent Passenger Traffic.
Express parcels and their revenue continued to recover in August.

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Sep 18

Daily Brief TMT/Internet: Link Administration and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Moya, Singapore Medical, Link Admin, Giordano,111 Inc, VNET

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Moya, Singapore Medical, Link Admin, Giordano,111 Inc, VNET

There are 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
Three new deals were discussed this week: Anthoni Salim’s Exit Offer for Moya Holdings Asia (MHAL SP); 111 Inc (YI US)‘s MBO, and Singapore Medical (SMG SP)‘s MBO.
Key updates took place for Frasers Hospitality Trust (FHT SP),Link Administration (LNK AU), Giordano International (709 HK), Shidax Corp (4837 JP), and VNET (VNET US).

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Sep 17

Daily Brief TMT/Internet: Elan Microelectronics, Istyle Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Taiwan Div+ Index Basket Trade Review – Time To Swing The Other Direction
IStyle’s @Cosme Gets a Boost from Amazon Investment

Taiwan Div+ Index Basket Trade Review – Time To Swing The Other Direction

By Travis Lundy

In August, Janaghan Jeyakumar, CFA published his leaderboard and flow estimates for the FTSE Taiwan Dividend+ Rebalance which starts today and runs through next Thursday.
Late in August, I recommended a basket trade. Since then, the BUY basket has outperformed the SELL basket by 7.6%. Set & Forget it is up 7.2%.
I provided timing in the basket trade. Now it is time to swing the other way.

IStyle’s @Cosme Gets a Boost from Amazon Investment

By Michael Causton

Japan’s cosmetics market is the focus of attention from many large international businesses thanks to strong sales and new growth businesses.
The latest is Amazon, which is to become the biggest shareholder in Istyle Inc (3660 JP), providing a major boost to the @Cosme operator.
IStyle, meanwhile, plans to offer cosmetics brands the chance to open popup stores within its retail chain for fixed monthly fees.

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Sep 16

Daily Brief TMT/Internet: HPSP, Softbank Group, WCP, Openedges Technology, Fazz Financial, Zoominfo Technologies, Glife Technologies, M-DAQ, Uena and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

KOSDAQ 150 Early Entry Candidates for December Rebalancing
Softbank Group – An Acceleration in Investment Does Not Require a Third Vision Fund
Poor Initial IPO Book Building Results for WCP
Open Edges Technology IPO Book Building Results
Fazz Secures US$100M Series C to Grow Its Lending Services, Expand Team in SEA
Earnings Quality Short Candidates: ZoomInfo, Gogo, Elanco Animal Hlth, Sonos, Energizer
Glife Technologies Raises US$3M Series A+ to Connect Restaurants with Farmers
SG Fintech Firm M-Daq Expands into Japan with New Office
East Ventures Pours Seed Funding into Indonesian Online Kitchen Startup

KOSDAQ 150 Early Entry Candidates for December Rebalancing

By Sanghyun Park

HPSP (403870 KS) and Sungeel Hitech (365340 KS) are the candidates for Early Entry in the December rebalancing as they sit comfortably within the Early Entry zone.
Rsupport (131370 KS) and Kona I (052400 KS) are safe deletion bets. If they are not deleted through the rebalancing process, they will most likely be excluded by Early Entry.
HPSP and SungEel should see an inflow equivalent to 0.9x and 0.8x ADTVs, respectively. Rsupport and Kona I will likely suffer an outflow of 3.4x and 3.8x ADTVs, respectively.

Softbank Group – An Acceleration in Investment Does Not Require a Third Vision Fund

By Kirk Boodry

Press reports indicate Softbank Group (9984 JP) is considering a third Vision Fund which seems to conflict with its more defensive posture at Q1 results last month
Softbank can re-accelerate investment at any time without VF3 so talk of a new fund is not a signal change. Perceptions of private equity value are more important
And a key message over the last six months is founders are too optimistic and that seems unlikely to shift suddenly. We have updated our SB performance tables below

Poor Initial IPO Book Building Results for WCP

By Douglas Kim

Several local Korean media reported that the initial book building results for the WCP IPO has been disappointing.
The IPO could be priced close to 60,000 won to 65,000 won won, which would be about 19%-25% lower than the low end of the IPO price range.
The final decision as to whether or not WCP will go ahead with the IPO at lower price or delay it altogether is expected to be made on/near 19 September.

Open Edges Technology IPO Book Building Results

By Douglas Kim

Openedges Technology (394280 KS) announced its IPO book building results. The IPO price has been determined at 10,000 won (33% lower than the low end of the IPO range).
We maintain our Positive View on this IPO but we lowered our base case valuation by 33% to 16,542 won per share, representing a 65% upside from the IPO price.
Open Edges Technology is a system semiconductor IP specialist with one of the world’s only integrated AI semiconductor design asset IP platform. Its sales increased by 376% YoY in 2021.

Fazz Secures US$100M Series C to Grow Its Lending Services, Expand Team in SEA

By e27

Fazz claims it saw US$10B in annualised transaction volumes over the past year and looks to double the volumes in the next 12 months
Fazz, a digital financial services group dual-headquartered in Singapore and Indonesia, has announced a US$100 million Series C funding round.
Fazz will use the funds to grow the business and expand its teams in Singapore, Indonesia, Malaysia, Vietnam and Taiwan from 800 to 1,400.

Earnings Quality Short Candidates: ZoomInfo, Gogo, Elanco Animal Hlth, Sonos, Energizer

By Eric Fernandez, CFA

This model seeks short-sale candidates among companies that use aggressive accounting and/or exhibit deteriorating quality of earnings.
They are typically highly idiosyncratic shorts and require thoughtful analyses of upcoming catalysts. When the company’s issues become well-known, there is often multiple compression as well as a rerating.
These shorts can have high or low betas, valuations based on artificial earnings and exhibit good short responses to subsequently disappointing earnings.

Glife Technologies Raises US$3M Series A+ to Connect Restaurants with Farmers

By e27

Glife Technologies aggregates demand for food produce from restaurants and match it with suppliers, giving restaurants better access to a variety of products
Singapore-headquartered Glife Technologies, a B2B marketplace to connect restaurants with farmers, has extended its Series round with a US$3 million investment from Tin Men Capital.
Glife will use the fresh funds to accelerate the launch and operations of its digital marketplace for F&B suppliers and merchants in Q42022 and enlarge its market share in the Indonesian market.

SG Fintech Firm M-Daq Expands into Japan with New Office

By Tech in Asia

M-Daq Global, a Singapore-based fintech firm that provides forex solutions, has opened an office in Japan as part of its international expansion plans.
The move comes after the company expanded into European markets by signing an agreement with London-based trading platform Turquoise to provide multiasset services.
The company has processed over US$32 billion in cross-border transactions over 45 markets since the launch of its Aladdin FX ecommerce solution in 2016.

East Ventures Pours Seed Funding into Indonesian Online Kitchen Startup

By Tech in Asia

Food delivery is the digital sector with the highest adoption in Southeast Asia. The pandemic gave the segment a huge boost, as people were forced to stay at home.
Local food startup Uena tried to solve this by building a network of online kitchens that can deliver these meals directly to customers.
It targets lower and middle-income segments, such as office workers, university students, convenience store employees, and couriers of food delivery apps.

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Sep 15

Daily Brief TMT/Internet: 21Vianet Group, NTT (Nippon Telegraph & Telephone), 4Paradigm, Nasdaq-100 Stock Index, Arlo Technologies Inc and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

VNET: Management’s Low-Balled Non-Binding Proposal
NTT (9432) Buyback Has Come – But NTT Is Gonna Grind Out Better EPS So I’d Keep It
4Paradigm IPO: Is Third-Time a Charm?
Sell Resistances Post Plunge
ARLO: Penalized for Growth

VNET: Management’s Low-Balled Non-Binding Proposal

By Shifara Samsudeen, ACMA, CGMA

Back on the 11 April, Chinese internet data center services provider VNET (VNET US) announced a non-binding proposal from Hina Group and Shanghai’s Industrial Bank at an utterly underwhelming US$8.00/ADS.
Then crickets. A reported tilt from MBK Partners failed to materialise.
VNET has now announced a preliminary non-binding proposal from founder Josh Sheng Chen, at a similarly underwhelming price of US$8.20/ADS.

NTT (9432) Buyback Has Come – But NTT Is Gonna Grind Out Better EPS So I’d Keep It

By Travis Lundy

NTT announced a buyback in May as discussed in NTT (9432) – Salutary Earnings Salutary Buyback, More to Go, via ToSTNeT-3 to buy a chunk of the govt’s stake.
That will be executed by ToSTNeT-3 buyback pre-open tomorrow, with a bid of 103.1725mm shares at ¥3,877. A separate report suggests the Ministry of Finance will sell 92mm shares.
It is like a mini tender offer so if you want to sell a large chunk of shares, you can. But I wouldn’t.

4Paradigm IPO: Is Third-Time a Charm?

4Paradigm (1764934D HK) is a pioneer and leader in enterprise AI. Company offers platform-centric AI solutions to enterprises that can be deployed on a large scale to support decision making.
The company was ranked the largest player in the platform-centric decision-making AI market in China in 2021 and has filed for a HKEx listing for the third-time this month.
4Paradigm’s top line and margins have improved since we last wrote on the company.

Sell Resistances Post Plunge

By Thomas Schroeder

NDX, DAX, Asia short levels met ahead of the CPI print. Today’s insight focuses on near resistance points to sell into after the conviction bear turn and reiterates downside targets.
Game plan was to short strength Monday/Tuesday and used pivot support/trailing stops to unwind some long exposure.
Call to buy the USD on this pullback at DXY 108 worked well with a focus on Euro, ZAR, and weaker Asian FX.

ARLO: Penalized for Growth

By Hamed Khorsand

ARLO deciding to spend more on brand awareness this year has given reason for some investors to move to the sidelines
ARLO’s second quarter results were better than expected and we believe the third quarter has trended better than expected as well
The timing of switching CFOs was a surprise since five months prior ARLO had established its ad spending strategy.

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Sep 14

Daily Brief TMT/Internet: Link Administration, 21Vianet Group, Canon Inc, Socionext, NEC Corp, 111 Inc, Netdragon Websoft, Taiwan Semiconductor (TSMC) – ADR, Enphase Energy and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

Link Admin/D&D Deal Appears Toast As The Woodford Shoe Drops
VNET’s Opportunistic US$8.20 Bid from the Founder
Canon Buyback Done, Ricoh’s Done Shortly, Back To Your Regularly Scheduled Program
Socionext Pre-IPO – Could Expect a Further Bump in Profitability, Although Some Hidden Risks Remain
Link’s Scheme on Life Support as the FCA Lands a Heavy Blow
NEC (6701) | Even Higher Conviction
111 Inc’s Low-Balled Homecoming Is A Done Deal
Netdragon Websoft – Ms Tang Yu Becomes World’s First Virtual Humanoid Robot CEO
Taiwan Dual-Listings – TSMC Premium Almost Wiped Out, UMC & ChipMOS ADRs Trading at Discounts
Supports to Be Tested Again Following CPI? Stick With Solar Stocks, Buying Manufacturing Names

Link Admin/D&D Deal Appears Toast As The Woodford Shoe Drops

The UK Financial Conduct Authority will approve Dye & Durham’s Offer for Link Administration (LNK AU) provided it backstops restitution and/or redress payments that the FCA may levy on …
… Link Fund Solutions Limited (LFSL) in relation to its management of the Woodford Fund. The amount? Up to a maximum ~A$523mn.
The FCA decision is not final. LFSL does not agree with its view. If D&D does not accept this commitment then a condition under the Scheme may not be satisfied.

VNET’s Opportunistic US$8.20 Bid from the Founder

21Vianet Group (VNET US) disclosed a privatisation proposal from the founder at US$8.20 per ADS, a 2.5% premium to The Hina Group/Industrial Bank’s offer of US$8.00 (disclosed on 11 April).
The data centre industry continues to be a hotbed for M&A. Bloomberg reported on 27 July that MBK Partners is mulling an offer for VNET.
The offer is unattractive, and Mr Cheng, with 28.79% of voting rights, will need the support of other substantial shareholders. This latest offer underlines the current mispricing of the shares

Canon Buyback Done, Ricoh’s Done Shortly, Back To Your Regularly Scheduled Program

By Travis Lundy

Canon Inc (7751 JP) has announced two buyback programs this year of ¥50bn each. Ricoh Company Ltd (7752 JP) announced one in May for ¥30bn.
The result is 2.9% bought back vs 4.4%. The accretion nod goes to Ricoh. But so does the overhang nod going forward. Effissimo+Crossholders is 40% for Ricoh. Mid20s for Canon.
Buyback impact-related trade timing has worked for Canon. Ricoh’s buyback ends imminently. There may be a trade to do here.

Socionext Pre-IPO – Could Expect a Further Bump in Profitability, Although Some Hidden Risks Remain

By Clarence Chu

Socionext (6526 JP) is looking to raise up to US$285m in its Japan IPO.
Socionext is a fabless semiconductor provider in Japan. Sales and profitability has been on an overall uptrend, and design wins in earlier fiscal years should materialize in the coming periods.
However, the firm has generated a substantial portion of revenue from a related party and is reliant on a particular foundry for its front-end manufacturing.

Link’s Scheme on Life Support as the FCA Lands a Heavy Blow

FCA approval, a condition precedent, will be granted subject to a condition that Link Administration (LNK AU) makes funds available to cover any redress payments related to the Woodford matters.
The FCA’s maximum redress payment is £306 million. The timeline and amount of the final FCA fine remain unknown. Dye&Durham/DND and Link will struggle to find a resolution.
With a 30 September end date, the deal is teetering on collapse. The share price may prove attractive for long-term value investors as it reflects a sizeable FCA fine.

NEC (6701) | Even Higher Conviction

By Mark Chadwick

NEC’s buyback announcement sends a clear message that the MTP is on track and management feel the stock is undervalued
The recent IR DAY increased our conviction in the financial model. We were impressed with the improving pipeline of Open RAN customers
The stock is significantly undervalued, trading below book value, with improving ROE

111 Inc’s Low-Balled Homecoming Is A Done Deal

111 Inc (YI US), an online healthcare platform operator in China, announced an unsolicited preliminary non-binding proposal from Gang Yu and Junling Liu – both co-founders and co-chairmans.
Yu and Liu are offering US$3.66/ADS, a 20% premium to the undisturbed price.
Yu and Liu control 92.1% of the votes. There is no shareholder vote on this transaction should a firm Offer unfold.

Netdragon Websoft – Ms Tang Yu Becomes World’s First Virtual Humanoid Robot CEO

By Douglas Kim

NetDragon Websoft announced that it has appointed Ms. Tang Wu (a virtual humanoid robot powered by AI) as its new CEO which would be the first ever in the world.
The company’s education revenue increased by 71.2% YoY to reach 2.4 billion RMB in 1H 2022. Profitability of the edtech business is also improving.
Despite the company’s lower valuation multiples than its peers combined with catalysts including improving edtech business, we are cautious on its shares mainly due to the overall market related risks.

Taiwan Dual-Listings – TSMC Premium Almost Wiped Out, UMC & ChipMOS ADRs Trading at Discounts

By Vincent Fernando, CFA

Taiwan ADR premiums vs. their local shares have generally decreased across the board.
Is TSMC’s high ADR premium a thing of the past?
UMC and ChipMOS ADRs are both trading at historically rare discounts to their Taiwan shares.

Supports to Be Tested Again Following CPI? Stick With Solar Stocks, Buying Manufacturing Names

By Joe Jasper

Key supports that we highlighted in last week’s Compass (Sept. 7) held strong, including 3900-3910 on the SPX, $293 on the Nasdaq 100 (QQQ), $177-178 on the Russell 2000 (IWM).
We got the bounce where bulls needed to hold, but these levels could be tested again following this morning’s hotter-than-expected CPI report.
As long as the aforementioned supports continue to hold, we continue to believe the lows are likely in for this bear market — something we noted throughout late-July and August.

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Sep 12

Daily Brief TMT/Internet: 111 Inc, Total Access Communication, Tencent, Enovix Corp and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

111’s Opportunistic US$3.66 Bid from the Co-Founders
Merger Arb Mondays (12 Sep) – DTAC/True, Link Admin, Ramsay, Genex, Tyro, EVOC, Giordano, 111
ECM Weekly (12th Sep 2022) – Onewo, CALB, YSB, Medanta, Beneunder, JMDC, SH Holdings, Indigo
Breakthrough Battery Innovation
China Internet Weekly (12Aug2022): Tencent, JD.com, Meituan, NetEase, Inkeverse

111’s Opportunistic US$3.66 Bid from the Co-Founders

111 Inc (YI US), the largest virtual pharmacy network in China, disclosed a privatisation proposal from a co-founder-led consortium at US$3.66 per ADS, a 20.0% premium to the undisturbed price.
For privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. The co-founders represent 92.04% of the total voting power.
The offer price is unattractive but this is a done deal. At the last close, the gross and annualised spread for a January 2023 completion is 11.6% and 33.4%, respectively.

Merger Arb Mondays (12 Sep) – DTAC/True, Link Admin, Ramsay, Genex, Tyro, EVOC, Giordano, 111

We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
Highest spreads – 21Vianet Group (VNET US), Alliance Aviation Services (AQZ AU), Ramsay Health Care (RHC AU), Genex Power Ltd (GNX AU), Infomedia Ltd (IFM AU), 111 Inc (YI US).
Lowest spreads – Tyro Payments (TYR AU), Nitro Software Ltd (NTO AU), Nearmap Ltd (NEA AU), Dongzheng Automotive Finance (2718 HK), MyDeal.com.au Ltd (MYD AU), MACA Ltd (MLD AU).

ECM Weekly (12th Sep 2022) – Onewo, CALB, YSB, Medanta, Beneunder, JMDC, SH Holdings, Indigo

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, a few large Hong Kong IPOs are lining up to launch soon.
Placements picked up this week in Japan and India with most being secondary deals.

Breakthrough Battery Innovation

By subSPAC

For those unfamiliar, Battery Maker Enovix has developed the next generation of Lithium-ion cells that powers everything from Smartphones to Electric Vehicles.
The company’s 3D silicon Cells use 100% active silicon anodes, compared to graphite anodes that are used by most Li-on batteries manufactured today.
Battery makers have stayed away from Silicon anodes due to several technical challenges, including battery swelling and short usable lifespan.

China Internet Weekly (12Aug2022): Tencent, JD.com, Meituan, NetEase, Inkeverse

By Ming Lu

Tencent invested more in Ubisoft Entertainment, a French game developer.
The monthly active users of local life recovered in China in June and July.
NetEase will close Music Street, the social networking-oriented karaoke app.

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Sep 11

Daily Brief TMT/Internet: Tyro Payments and more

By Smartkarma Daily Briefs | Daily Briefs, TMT/Internet

In today’s briefing:

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Tyro, Shidax, Link Admin, Giordano, Hitachi Transport

(Mostly) Asia-Pac Weekly Risk Arb Wrap: Tyro, Shidax, Link Admin, Giordano, Hitachi Transport