TMT/Internet

• Shift Up (462870 KS) plans to raise up to US$320m in its South Korean IPO.
• Shift Up is a South Korean games developer, which as released three games so far for the global markets.
• We have looked at the company’s performance, undertaken a peer comparison and talked about valuations in our past notes. In this note, we talk about the refiling and other updates.

• We expect strong 30-35% YoY earnings growth in Plover Bay Technologies (1523 HK) for its earnings to be released in July for H1 FY24. 
• We expect the company to continue its 80% dividend payout ratio, which will result in a 4% semi-annual yield (8% annualized). 
• Trading at 12.2x with >50% ROEs and net cash of >30 mn USD, we expect the strong results to catalyze a further multiple rerate.

• Nokia and Foxconn are collaborating to manufacture 5G products in northern Vietnam, potentially boosting the country’s tech industry.
• Huawei’s entry into the automotive tier-1 market raises questions about its impact on traditional car manufacturers.
• The UK semiconductor industry and Taiwan Semiconductor Manufacturing Company (TSMC) are highlighted at London Tech Week, showcasing their importance in the tech world.

• Intel’s 2023 10K includes two new risk sections relating to its foundry plans and Smart Capital approach to funding them. 
• It labels its foundry plan as “Highly Risky” and rates its chances of success as “highly uncertain”
• They also helpfully warn that they have “limited experience” with the third party foundry business, just FYI

• Revenue for 1H FY10/24 was JPY85.9bn, up 35.5% YoY, with a business profit of JPY2.2bn, up 146.1% YoY.
• RENOSY Marketplace business revenue was JPY83.6bn, up 35.3% YoY, and ITANDI business revenue was JPY2.1bn, up 34.1% YoY.
• FY10/24 company forecast revised to JPY185.0bn in revenue and JPY3.7bn in business profit, with EPS unchanged at JPY45.90.

• Severe cyclical downturn impacting broadband/optical telecom equipment vendors
• Author believes ADTN has significant upside potential of 2.5x-5x from current price
• Expectation for ADTN to reach $1-$1.50 EPS power over next two years, confident in company’s ability to manage tight liquidity situation without diluting shareholders

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• The Technology Select Sector SPDR (XLK US) ETF tracks the Technology Select Sector Index and has an AUM of over US$70bn.
• NVIDIA Corp (NVDA US) has broken through the US$3tn market cap barrier and is very close to Apple (AAPL US) in terms of free float market cap.
• If NVIDIA ranks higher than Apple on free float market cap at the close on Friday, there could be huge inflows to NVIDIA and outflows from Apple a week later.

• TSMC: +21.3% Premium; Trading at New +15-25% Range This Year
• ASE: +12.7% Premium; We Continue to View 14%+ as Fresh Short Level
• CHT: +1.2% Premium; Good Level to Short Relative to History

• Crucial Vote: Shareholders are voting on Musk’s $56 billion compensation deal and Tesla’s reincorporation in Texas, pivotal decisions for the company’s direction.
• High Stakes: The outcome will determine Musk’s commitment to Tesla, potentially shifting his focus to other ventures and impacting Tesla’s operations.
• Institutional Opposition: Significant resistance from institutional investors and logistical issues for global shareholders create uncertainty. Abstaining from voting counts as a vote against, hindering Elon-supporting retail investors.

• AEM (AEM SP) announced a new CEO as of 30th of May 2024. The new CEO officially starts 1st of July 2024.
• Amy Leong will take over from Chandran Nair as she leaves her Chief Commercial Officer role at Formfactor Inc (FORM US). 
• Given the weak business results and inventory management issues it should be expected that Mrs Leong would want to clean the proverbial house before she starts in her new role.

• India is limiting Chinese participation in Indian subsidiaries while seeking investments from Taiwan, diversifying its economic ties.
• AWS is committing significant funds to establish data centers in Taiwan, anticipating obstacles in securing renewable energy sources.
• Elephantech is seeking collaborators to scale up their eco-friendly PCB manufacturing operations to meet the escalating demand. Join the sustainable production movement.

• Revenue was JPY954mn (+32.5% YoY), with subscription-based recurring revenue at JPY837mn (+23.6% YoY), accounting for 87.8% of total revenue.
• Operating profit was JPY315mn (+94.2% YoY), with operating expenses at JPY638mn (+14.5% YoY), and OPM at 33.1% (+10.5pp YoY).
• Companywide ARR totaled JPY3.4bn (+22.7% YoY), with user count at 1,292 companies (+6.2% YoY) and churn rate at 1.05% (+0.01pp YoY).

• Last night Bloomberg’s Mark Gurman reported that in exchange for OpenAI’s position in MacOS, IOS, and iPadOS, Apple would pay OpenAI nothing. 
• To level set, earlier this week, Apple unveiled their implementation of artificial intelligence, branded “Apple Intelligence”.
• Apple Intelligence separates itself from Google’s Gemini and OpenAI’s ChatGPT by identifying and addressing user queries that contain personal information, but for capabilities it isn’t capable of performing, asking for user permission, and outsourcing the request to OpenAI’s ChatGPT, anonymously. 

• Revenue increased by 10.6% YoY to JPY4.0bn, with cloud services revenue up 79.3% YoY due to subscription growth.
• Operating loss was JPY109mn, pre-tax loss JPY42mn, and loss attributable to owners JPY35mn, all improved from Q1 FY12/23.
• Revised 1H FY12/24 forecast: revenue JPY8.2bn, operating loss JPY500mn, pre-tax loss JPY500mn, and loss attributable to owners JPY400mn.

• In FY12/23, CSC reported revenue of JPY3.1bn (+34.5% YoY), operating profit of JPY550mn (+42.5% YoY), recurring profit of JPY560mn (+41.5% YoY), and net income attributable to owners of the parent of JPY427mn (+39.4% YoY).
• Revenue expanded on improved annual recurring revenue (ARR) and user count of Shadankun, WafCharm, and SIDfm products.
• The company released its new product, CloudFastener, in October 2023.

• Sales rose by JPY1.9bn (+5.3% YoY) due to growth in Security Equipment, Peripheral Computer Equipment, and Others segments.
• Recurring profit increased by JPY6.1bn (+76.2% YoY) due to equity method investment gain from Iwatsu Electric Co., Ltd.
• Ai Holdings revised full-year earnings forecast for FY06/24: Recurring profit JPY18.6bn, net income JPY15.6bn, sales JPY53.0bn.

• A8 New Media (800 HK) disclosed a Cayman scheme privatisation offer from Mr Liu Xiaosong (Founder, Chairman, CEO) at HK$0.36 per share, a 162.8% premium to the last close price. 
• The massive premium is unsurprising, as A8’s EV has been negative since April 2023 due to headwinds from the weak Chinese leasing sector and uncertainty about cash use.  
• The high takeover premium, no shareholder holding a blocking stake, and low AGM minority participation rate point to a done deal. However, this is a small-cap illiquid stock.  

• On 12 June, SK Telecom (017670 KS) confirmed that its affiliate Sapeon plans to merge with its competitor Rebellions by end of this year.
• Sapeon and Rebellions’ largest global competitor is Nvidia. A key aim of the merger is to challenge Nvidia and try to take away its global dominance in AI chips.
• If the combined Sapeon and Rebellion can take away just 1% market share resulting in 1% of Nvidia’s market cap, this would suggest valuation of US$31 billion.

• Transsion is the global No. 4 largest smartphone producer according to IDC.
• In 1Q24, shipments increased by 34% YoY and revenue increased by 88% YoY.
• We see the stock’s upside at 17% and the price target at RMB100.00.

• Sony plans to achieve profitability in car camera business by 2026, aiming for 6x growth in the sector.
• Samsung cancels anniversary events to focus on new management plan in response to crisis within the company.
• Taiwan’s passive component makers like Yageo and Ample flourish in AI boom, indicating growth potential in semiconductor industry.

• Following a suspension on the 28th May, property rental play A8 New Media (800 HK) has now announced an Offer by way of a Scheme from chairman/founder/major shareholder Liu Xiaosong.
• The Cancellation price is $0.36, a whopping 162.77% to last close. The price is final.
• This is a done deal. But A8 is an illiquid micro cap. 

• i-mobile reported cumulative Q3 FY07/24 revenue of JPY16.3bn (+14.3% YoY), operating profit of JPY3.7bn (+9.2% YoY).
• Consumer Service business cumulative Q3 revenue was JPY14.2bn (+19.4% YoY), with segment profit of JPY3.5bn (+18.9% YoY).
• Online Advertising business cumulative Q3 revenue was JPY2.1bn (-11.8% YoY), with segment profit of JPY316mn (-39.3% YoY).

• Apple Announces New AI Features at WDC; Shares Surge to New All-Time Highs
• Top Movers: Major Computex Exhibitors See Share Prices Fall Despite Strong Presence
• Computex 2024: Chip Companies Notably Competing to Win PC Makers

• Core Scientific, a leading entity in the cryptocurrency mining and data center sector, has recently positioned itself as a pivotal player in the evolving digital infrastructure landscape.
• The firm reported robust financials for the first quarter of Fiscal Year 2024, showcasing significant growth and operational efficiency.
• Notably, Core Scientific rejected an unsolicited acquisition proposal from CoreWeave, an event that merits analysis concerning its impact on shareholder value and corporate strategy.

• AI technology is driving sustainability efforts while posing environmental risks, as discussed by Nvidia CEO Jensen Huang at London Tech Week 2024.
• AI is revolutionizing computing and task optimization through advanced PCs and architectures, with AMD CEO predicting its dominance in the future and emphasizing Taiwan’s crucial role in the tech industry.
• Google is investing $5 billion in expanding its Singapore Data Center and Cloud Region campus, Apple is introducing VisionOS for spatial computing, and the UK is seeking Taiwanese partnerships for high-tech collaborations, while also focusing on privacy with Apple Intelligence at WWDC.

• SmartRent has provided a noteworthy set of results for the first quarter of 2024, accompanied by the company’s initiative of exploring a potential sale.
• In the recent report, SmartRent disclosed a revenue for the quarter amounting to $50.5 million, with $12 million attributable to SaaS (Software as a Service) recurring revenue products, representing a year-over-year increase of 32%.
• This growth is largely driven by the scaling of total deployed units and new gains from cross-selling strategies, demonstrating an effective execution of their business and product expansion strategy.

• Instructure’s latest financial performance presents a nuanced picture for potential investors and acquirers, reflecting both strengths and challenges.
• The company, anchored by its market-leading Canvas Learning Management System (LMS) in North America, reported robust first-quarter results.
• Total revenue reached $155.5 million, marking a 20.7% year-over-year increase, with organic constant currency revenue growth at 6.8%.

• BigCommerce has made notable strides in improving its business model and focusing on efficient revenue growth, particularly in the first quarter of 2024.
• As expressed by the company’s CEO, Brent Bellm, and CFO, Daniel Lentz, on their latest financial results, BigCommerce reported a 12% year-over-year revenue increase to approximately $80 million.
• This growth combined with an adjusted EBITDA of just over $4 million, indicating a trajectory towards sustainable profitability.

• Solid State (SOLI) is a British electronics manufacturer and distributor specializing in mission-critical components and systems for industries with high regulatory barriers.

• The founding families still lead the company, owning over 13% of outstanding shares. Since 2010, the CEO has driven annual sales and EPS growth of 18%.

• Despite this strong track record, the shares trade at a normalized 7.3% owner earnings yield and an 11.1 adj. EV/EBIT.

• DXC Technology reported its financial results for the fourth quarter of the fiscal year 2024, displaying a mixed performance amidst challenging market conditions.
• Total revenue experienced a decline of 5% on a constant currency basis, outpacing expectations slightly but reflecting broader industry and economic challenges.
• The adjusted EBIT margin decreased by 50 basis points year over-year to 8.4%, indicating pressure on profitability despite efforts to optimize costs.

• There are 5 adds and 5 deletes to the Yuanta/​P-Shares Taiwan Dividend Plus ETF in June with implementation taking place from 21-27 June.
• The constituent changes and capping changes result in an estimated one-way turnover of 12.8% and in a one-way trade of TWD 37.2bn (US$1.15bn).
• The changes are in line with our forecasts with one exception. Uni President Enterprises (1216 TT) was not added and Yulon Finance (9941 TT) was added instead.

• Starting 24 July, there will be a mandatory pre-announcement requirement for block deal sales in Korea. 
• In other words, the major shareholders of the Korean companies need to report publicly prior to their actual sales of their stakes in these companies through block deal sales.
• The potential block deal sales candidates could continue to underperform on average the companies that are selling these stocks in potential block deal sales in the next several weeks. 

• There is 1 change for the S&P/ASX20 Index, 1 change for the S&P/ASX50 Index, 2 changes for the S&P/ASX100 Index, and no regular changes for the S&P/ASX200 INDEX in June.
• The surprise inclusion of Wisetech Global (WTC AU) means that positioning is likely to be lower than the passive buying and there could be a move higher in the stock.
• There will be one adhoc inclusion to the S&P/ASX 200 (AS51 INDEX) at the close on 19 June following Cie De Saint-Gobain (SGO FP)’s acquisition of CSR Ltd (CSR AU). 

• Firms that split their shares show an avg. return of +25.4% one year after split. That’s more than 2x the average return of the S&P 500 during those periods. 
• Critically, returns post stock splits are mainly seen from announcement to actual split date. Mega caps have shown 9.3% absolute returns 12 months post split. Be cautious of misleading averages.
• On relative terms (v/s S&P500) price returns were down 6.3% 12-months after stock splits. All splits generated negative returns except for Tesla in 2020.

• Asia Vital Components (3017 TT) will replace Chang Hwa Commercial Bank (2801 TT) in the Yuanta/P-Shares Taiwan Top 50 ETF at the close of trading on 21 June.
• Asia Vital Components (3017 TT) was added to a global index at the end of May and the stock has dropped nearly 25% from its highs.
• Asia Vital Components (3017) trades at a much higher forward PE compared to its peers while Chang Hwa Commercial Bank (2801) trades at a lower PB compared to its peers.

• Based on returns and margins, US-listed Full Truck Alliance is best comp
• Lalatech probably deserves premium valuation multiples vs Full Truck Alliance 
• An equity valuation of US$11bn+ justifiable; will investors look at recent flops?

• AViC upwardly revised its full-year FY24/9 earnings forecast at the time of its 1H earnings announcement, demonstrating renewed and accelerated growth after recovering from the temporary slowdown in growth caused by business conditions and funding difficulties among startups and other emerging companies in FY23/9.
• While many of its competitors are showing sluggish business performance, the Company has been able to pursue growth on its own by committing to improving both client advertising efficiency and in-house productivity through meticulous and data-driven business operations as well as executing its fast-paced Plan-Do-Check-Act (PDCA) cycle.
• Meanwhile, its share price has not risen in line with the boost in EPS, with the latest P/E ratio hovering around 20x based on the revised earnings forecast.

• Ceragon Networks is a wireless backhaul solutions provider helping customers transition to 5G connectivity
• Faces competition from companies like Aviat Networks and Airspan Networks
• Recent unsolicited acquisition offer from AVNW rejected, with potential 83% upside in stock price according to 18-month price target

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• POET Technologies is a startup disrupting the photonics industry with a new technology that eliminates parts of an optical transceiver and replaces them with a single integrated device which is smaller, cheaper, faster, more scalable and with much lower power consumption than the current solutions.
• It has a $50M joint venture with Sanan IC to make and sell optical engines to data centers and telecom.
• Its solution can be produced at wafer scale, eliminating costly manual steps, and allowing it to be easily produced in large quantities and at low cost.

In a difficult trading environment, with customers in the largest target market in a digestion phase after widespread supply chain disruption, discoverIE reported strong underlying operating profit growth and margin expansion. Despite higher net finance costs and currency headwinds, underlying EPS increased 5% y-o-y (+10% at constant exchange rates). We forecast modest growth in FY25 and FY26 and continued margin expansion in line with company targets and expect further M&A to boost growth.

• 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, we looked at Guzman Y Gomez (0817833D AU), QuantumPharm (QUP HK) and Webtoon Entertainment (WBTN US) this week.
• On the placement front, there were a few deals across Hong Kong, Australia and Japan.

• The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
• Last week saw NORTHBOUND net BUY RMB 5.3bn of A-shares on lower gross volumes. NORTHBOUND bought utilities, renewables, and semiconductors, and sold Kweichow Moutai, Midea, Bk Jiangsu, and Wuliangye Yibin.
• Ongoing questions as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected from earlier announcements.

• Tuniu’s revenue grew by 71% YoY in 1Q24, as the company benefited from the travel industry’s recovery.
• Smart Share Global’s revenue plunged by 52% YoY in 1Q24 due to fewer customers in shopping malls.
• PDD plans to price products on behalf of retailers, which reflects the severe competition in e-commerce.

• Shares of RoboSense Technology, a mass producer of LiDAR products and perception solutions, rose ~86% since IPO and outperformed Hesai Group and Hang Seng Index on a YTD basis.
• Founder-Led LiDAR company priced its IPO at HK$43/share and raised ~HK$1B gross proceeds in January. RoboSense shares fell on first day of public trading on the Hong Kong stock exchange.
• Today, RoboSense Technology became the most valuable LiDAR company in the world and is now valued at roughly $4.6B. 

Key points

• Dropbox was last pitched in August 2022 with nearly reached $1B FCF guidance for 2024
• Company hit a plateau with guidance for $957M to $997M in last earnings call, factoring in stock-based compensation resulting in over $620M in FCF on an $8.1B equity
• Despite recent drop in equity value, Dropbox offers higher earnings yield and potential upside in equity value compared to Box

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Whilst the Chinese online games market has struggled since 2023, NetEase (9999 HK) has continued to gain revenue market share driven by the success of its mobile titles.
• Future revenue growth will depend on the continued success of NetEase’s legacy titles and its robust pipeline of upcoming releases, including several highly anticipated launches.
• NetEase trades nearly 2 standard deviations below its 5-year historic average PE trading range, a level that has proved to be a very good entry point.

• I tally 47 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Two new deals discussed on Smartkarma this week: Asia Cement China (743 HK)‘s rubbish Scheme; and the low-balled MBO for Nagatanien Holdings (2899 JP).
• Key updates took place on: CPMC Holdings (906 HK), APM Human Services (APM AU), Altium (ALU AU), Austal  (ASB AU),Shinko Electric Industries (6967 JP), and Hollysys Automation Technologies (HOLI US).

• Ciena Corporation reported its fiscal second quarter 2024 financial results, delivering a mixture of strengths and areas for caution.
• Revenue for the quarter reached $911 million, aligned with market expectations but reflecting the ongoing variability in the order patterns of service providers, particularly impacted by inventory adjustments.
• The adjusted gross margin stood at 43.5%, showcasing the company’s ability to maintain profitability even in a fluctuating market scenario.

• Indie Semiconductor’s Q1 2024 financial results and strategic discussion provide both encouraging and cautionary insights.
• During this period, the company reported a year-over-year revenue increase of 29% to $52.4 million, driven by strong performance in their Autotech market segment, albeit slightly below the provided guidance.
• Gross profit stood at $26.4 million, reflecting a gross margin of 50.3%, which fell short of expectations due to unfavorable product mix adjustments.

• Samsung chairman kicks off US visit with Verizon, highlighting importance of partnerships for expanding US market presence.
• French tech startups shine at InnoVEX, showcasing innovation and talent in the tech industry at Computex 2024.
• Taiwan chipmakers showcase cutting-edge tech at Computex 2024, while India’s EV market shows promise and challenges with Modi’s third-term win.

• Yanolja is getting ready to complete its IPO in the US in the next several months. Softbank invested about US$1.7 billion in Yanolja in 2021.
• The valuation of Yanolja could be between US$7 billion to US$9 billion. The company could raise nearly US$400 million in this IPO. 
• Overall, we are concerned about the valuations of Yanolja if indeed the bankers push ahead with the IPO at the valuation range of US$7 billion to US$9 billion.

• As per the Q1 2025 earnings, Asana experienced a positive start to the year, with revenues growing 13% year-over-year.
• Revenue from large customers grew even faster.
• Non-operating margins also improved by 5 percentage points year-over-year.

• CrowdStrike Holdings Inc. has reported its fiscal first quarter 2025 results, demonstrating robust growth and financial performance.
• CrowdStrike’s investment appeal is anchored on its comprehensive cybersecurity solutions delivered through the Falcon platform, an AI-native software that consolidates various cybersecurity functionalities.
• This platform strategy leverages artificial intelligence to enhance cybersecurity measures, streamline operations, and improve cost-efficiencies for clients.

• In its second quarter of fiscal 2024, Hewlett Packard Enterprise (HPE) reported notable performance, surpassing its initial revenue and non-GAAP diluted net earnings per share (EPS) expectations.
• This growth was primarily driven by a robust increase in demand for AI systems, highlighted by a significant uptick in revenue contributing to a cumulative AI systems orders of $4.6 billion for the quarter.
• HPE’s optimistic outlook is further supported by a raise in full-year revenue and non-GAAP EPS guidance, though it maintains its forecast for free cash flow.

• The Descartes Systems Group reported its robust quarterly earnings, displaying solid growth and notable investments in acquisitions.
• Ed Ryan, CEO, opened by highlighting key metrics revealing that revenues were up 11% from last year, adjusted EBITDA increased 16%, with a margin of 44%, and $63.7 million was generated from operations.
• The company concluded the period with almost $270 million in cash and had an untapped $350 million credit line, even after using about $140 million for acquisitions.

• Elastic, the search AI company, has reported strong results for Q4 and FY 2024, signalling its growth trajectory and strategic focus for the coming years.
• Its top-line earnings for the quarter exceeded analysts’ estimates, demonstrating its solid execution strategy and validating its land, expand and consolidate growth model.
• The firm’s revenue grew by 20% in Q4 to reach $335 million, boosted by a 32% increase in cloud revenue and the steady progression of its self-managed annual cloud subscriptions.

• HashiCorp recently released its fourth-quarter financial results, which revealed revenues of $156 million, marking an annual growth of 15%.
• The firm extended non-GAAP remaining performance obligations to $483 million, representing 21% year-over-year increase, exhibiting continued demand for its products.
• The key drivers for this performance were new enterprise wins and current remaining performance obligations (cRPO) growth.

• Autodesk, a leading design software and services company, had a robust financial performance for the Fourth Quarter and Full Year Fiscal 2024.
• The company reported a 14% constant currency revenue growth for the fourth quarter and emphasized its subscription business model and product and customer diversification as the foundations of its resilience.
• Autodesk’s earnings call highlighted marked growth and strong renewal rates in new business.

• Elliott Management has emerged as a 2%+ shareholder in SoftBank group and is driving for share buybacks of upto USD15bn; we see this as a game changer for minority shareholders
• Recent moves to enhance corporate governance in Japan have taken root, yet we see Softbank group as a laggard on corporate governance which been targeted by an experienced activist
• Softbank shares trade at a 54% discount to the estimated NAV; an activist like Elliott on board could meaningfully drive shareholder value creation and a narrowing of the NAV discount

• Activist short seller Scorpion alleges Lasertec is a “colossal fraud” and “ticking time bomb”
• Most of their allegations relate to problems with Lasertec’s EUV mask inspection tools
• Lasertec achieved Intel’s distinguished supplier ward for the past six years and last December landed an award from TSMC for  “Distinguished EUV Mask Inspection and Metrology Collaboration”. What gives?

• FSS wants Nikke’s MAU data to address revenue concerns. They also seek April and May sales data for Stellar Blade to address valuation concerns despite its recent launch.
• Shift Up updated the prospectus with Nikke’s increasing MAU data but didn’t include Stellar Blade sales data. FSS may request further revisions, possibly delaying the IPO again.
• Nikke’s MAU has risen but plateaued versus the previous quarter, and uncertainty surrounds Stellar Blade’s April-May sales, potentially impacting IPO pricing.

• Quiddity’s “Who is Ready” series of insights aims to objectively identify names listed on the Tokyo Stock Exchange that are potential additions to the TOPIX Index in future.
• There have been no TOPIX Inclusions in 2024 so far although dozens of companies have been able to meet the key Section Transfer requirements on paper for several months.
• However, there are some pre-event candidates we believe are worth monitoring as they have previously confirmed their desire to move to the Prime Market.

• Taiwan Semiconductor (TSMC) – ADR (TSM US) is planning to launch its 2nm in 2025.   
• TSMC is expected to acquire one High-NA EUV machine this year for R&D purposes, but it will not be used for commercial production.
• TSMC is expected to increase the cost of its Chip-on-Wafer-on-Substrate (CoWoS) package by around 15% in 2H24.

• Air Liquide investing $250M in new US facility for Micron gas supply, reflecting commitment to growth and sustainability.
• Maruti Suzuki focusing on renewable energy expansion in India, showing dedication to environmental initiatives and reducing carbon footprint.
• EVs driving demand for high-tech satellite dishes, while Nvidia aims to hire 50% foreign workers for new R&D center in Taiwan. EU-China tariff risks highlighted.

• The Altium Ltd (ALU AU) IE considers Renesas Electronics (6723 JP)’ A$68.50 scheme offer fair and reasonable as it is above the midpoint of the A$62.37 to A$70.27 valuation range. 
• The offer is conditional on remaining regulatory approvals (FIRB, CFIUS) and shareholder approval. 
• The offer price is attractive and 31% above the all-time high. At the last close and for the 1 August payment, the gross/annualised spread was 1.7%/11.6%.

• Salesforce Inc.’s Q1 2025 results saw revenue growth of 11% year-over-year to $9.13 billion, with the CRM provider leading market share worldwide for the 11th consecutive year, according to the latest IDC software tracker.
• The company is managing over 250 petabytes of data for its customers as it continues to drive transformation in artificial intelligence (AI).
• The company maintained its FY ’25 revenue guidance of $37.7 billion to $38 billion, representing a growth of 8-9% year-over-year.

• Dell Technologies Inc’s stock price crashed after a disappointing set of earnings.
• The company reported its first quarter results for the fiscal year 2025, highlighting a 6% increase in revenue to $22.2 billion.
• The revenue growth was attributed to remarkable growth in servers and a return to growth in the commercial PC business.

• C3.ai Inc.’s 2024 fourth quarter financial results and their fiscal year report have illustrated continuous growth and increased profitability.
• With a record revenue of $310.6 million for the full year, indicating a 16% increase from last year, and Q4 revenue at $86.6 million, the company has significantly exceeded analyst expectations and its own guidance estimates.
• Its subscription revenue reached an impressive $278.1 million, a 21% rise from last year’s figures.

• On 5 June, Shift Up announced that it will be postponing its IPO to July. The original book building period for the institutional investors was from 3 to 13 June.  
• The final book building date has been postponed to 27 June. The subsequent public offering subscription for general investors was also postponed to 2 to 3 July.
• A major investment positive of Shift Up is enormous initial success of Stellar Blade which was the best selling game in the U.S. and numerous other countries in April 2024.

• Sakura internet (3778 JP) is looking to raise US$127m from its primary follow-on. Proceeds will be used towards purchasing GPU servers, and constructing new data center facilities.
• While 11% of total shares outstanding are offered here, the deal would be easily digested by the market, representing just 0.8 days of its three month ADV.
• In this note, we run the deal through our ECM framework and comment on deal dynamics.

• Today, Maxell Ltd (6810 JP) announced its new MTMP “MEX26 – Commit to Value (CorporateValue,ProfitGrowth)” with lots of consultant-speak and corporate homily.
• But they present a capital investment plan, and a capital return plan. These may interest investors. The buyback is the same size as 2019 and 2022. They popped and faded.
• Todays tidbits were all announced during the lunch break today, and the stock popped 6% in the PM session on the news.

• Foxconn’s Hyderabad factory to begin producing Airpods in August, as confirmed by Telangana official.
• Qualcomm CEO backs Arm’s forecast of 50% Windows PC market share in 5 years.
• UnaBiz achieves record-breaking 90% accuracy with AI-enabled Wi-Fi geolocation; Nvidia and Foxconn unveil advanced computing center in Taiwan. EU establishes AI office to enforce AI Act. Tower Semi awaits wafer fab approval in India post-elections. Win Semiconductors propelled by mobile phone surge into 2024.

• Vanguard announce the establishment of a 12” Fab in Singapore with 60% stake, with Nxp Semiconductors Nv (NXPI US) will invest remaining 40%.  
• The nodes produced will span from 40nm to 130nm, encompassing mixed-signal, PMIC, and analog ICs to support automotive, industrial, consumer, and mobile applications.  
• Vanguard will uphold a healthy cash balance, along with large debt and a follow-up cash offering.

• Apollo-Managed funds and affiliates will lead an investment of $11 billion to acquire from Intel a 49% equity interest in a joint venture entity related to Intel’s Fab 34
• This deal follows a similar mid-2022 deal with Brookfield to co-invest in two new leading edge fabs in Arizona at a cost of up to $30 billion
• Why make the deal with Fab 34 in Ireland instead of the Ohio fab under construction?

• Surge in revenue during 1Q24 may have implications for a return to strong profit growth
• There is no evidence of structurally weaker core costs, like COGS and SGA and even R&D
• ROE is now above 20% and this after it large capital raising in FY22

• Marvell had a pretty solid result and guided to sequentially better revenue.

• The market didn’t like this, but I thought, looking through the result, I liked this result quite a bit. Shares did not.

• Marvell Technology reports Q1 EPS $0.24 ex-items vs FactSet $0.24.

• Lasertec shares dropped nearly 8% following a scathing 53-page report by Scorpion Capital, accusing management of “colossal fraud.” 
• The SC report is shrill, in our view, and therefore, we think we add value by contributing a second opinion. 
• In our view, Lasertec is due for a correction even if SC’s report is inundated by hyperbole.

• Astera Labs announced financial results for 1Q’FY24 in May. According to IPO prospectus, ~5.9M shares became eligible for sale following public release of earnings for the first quarter of FY24.
• The high-growth semiconductor company filed form S-8 on May 8, 2024. The selling stockholders, including current employees and service providers, offered additional ~3M shares as early lock-up expired.
• Astera Labs shares currently trade at rich multiples of ~37x EV/FY24E Revenue and ~25x EV/FY25E Revenue on my revised forecasts.