TMT/Internet

• Sea Ltd (SE US) reports 1Q22 results tomorrow and we expect results to follow the overall sector’s trend of weak revenue growth but lower losses.
• Consensus 1Q22 revenue expectation was lowered in the last three months but there’s still a bit more downside due to Free Fire’s struggles.
• The biggest risk is the remaining three quarters of 2022 and the next year as consensus revenue seems too bullish with estimates of 42% revenue CAGR through 2021-23.

• The review period for the September rebalance of the KRX New Deal indices started on 1 May and will run till 31 July. Implementation is on 8 September.
• Intellian Technologies (189300) could replace Danal Co Ltd (064260) in the Internet index, while KMW Co Ltd (032500 KS) could replace AfreecaTV (067160 KS) in the top 3 index stocks.
• Nexon Games (225570 KS) could replace Devsisters (194480 KS) in the Game Index, though the flows are small on the stocks given the small benchmarked AUM.

• freee (4478 JP)  reported 3QFY06/2022 results on Friday. Revenue grew 35.7% YoY to JPY3.65bn (vs consensus JPY3.63bn) driven by strong growth in paying users.
• Operating losses declined to 18.5% of revenues during the quarter from 24.0% in the same period a year ago.
• The company’s shares moved up by about 9% at the end of Friday’s close following its earnings announcement.

• Generic segment positively surprised; maintain BUY
• Results within expectations
• Key takeaways from 3QFY22 results
• Resilient but not immune to downside risks

Inari posted another set of strong results for 9MFY22, supported by steady growth for its RF/Opto products, and a surprise beat by its Generic segment. In line with our recent moderation of the sector’s valuation pegs (given the Fed’s aggressive monetary tightening), we lower Inari’s to 28x FY23E PER, at +0.5SD to the LT mean (from 32x FY23 PER, at +1SD). Our TP is also lowered to MYR3.50 (-11%), but we maintain our BUY call/forecasts for now. Inari remains our top M’sian OSAT pick, premised upon its (i) RF division’s sustained resilience, (ii) proven mgmt team, and (iii) solid fundamentals (net cash pile of c.MYR2b, or 53 sen/share).

• On Friday 13 May, two days after earnings, Capcom Co Ltd (9697 JP) announced a share buyback via Tender Offer from its CEO. 
• The Announcement talks about how buying the shares back “contributes to the improvement of capital efficiency such as earnings per share (EPS) and return on equity (ROE) of the Company.”
• Then another company announcement erases 99% of that accretion, and money out the door. ROE goes up because cash goes out, and pro-forma EPS rises from ¥161.59 to ¥161.61. Whoopee!

• We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia and the US (ADRs only).
• This week, highest gross spreads are Dongzheng Automotive Finance (2718 HK), Sezzle Inc (SZL AU), 21Vianet Group (VNET US), Infomedia Ltd (IFM AU), Link Administration Holdings (LNK AU), Alliance Aviation.
• Lowest gross spreads are Virtus Health (VRT AU), China Logistics Property Holdings (1589 HK), Uniti Group Ltd (UWL AU), Mapletree North Asia Commercial Trust (MAGIC SP), Irongate Group (IAP AU).

• Coinbase reported its first net loss since listing, as warned by the management before, due to both declining trading/transaction revenue and a continued increase in operating expenses.
• Besides the impairment charges, the increase in Q1’22 operating expenses was mainly because of the headcount growth as Coinbase plans to further expand its business offerings this year.
• Coinbase’s earnings for the year will unlikely improve as the company sticks to the plan to make 2022 an investment year regardless of the downturns in the broader crypto markets. 

• Its revenue, GM and NM were NT$16.3bn, 42.6% and 36.1% in 1Q22. 
• GlobalWafer experienced their China Suzhou subsidiary, SST, suspended production during April 2~27 by local government’s COVID-19 control measure, but it had resumed production.
• The stock dividend is NT$16 in 2022, which is 58.7% payout ratio from 2021 earnings. The payment date is to be 2022/08/05.

• Phison reached to NT$17.1bn, 32%, 14% and NT$10.49 for revenue, GM, NM and the Diluted EPS in 1Q22.
• We estimate it could be a slight positive growth in 2022, which could reach NT$18.1bn/32.5% for revenue/GM respectively.
• Phison and its competitors shall continuously strive in Flash card and the related business.

• KYEC reached revenue, GM, OPM and Diluted EPS of NT$8,984mn, 35.8%, 25.6% and NT$1.47 respectively in 1Q22.
• KYEC could reach to ~10% revenue QoQ growth in 2Q22 because of some orders delayed in Suzhou for COVID-19 controlling measure in 1Q22.
• The mainland China smartphone is not strong in 2Q22, but the smartphone chipset testing demand could still be the largest demand in KYEC. 

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

• What I try to look for is the holy Trifecta of value investing: Revenue growth, margin expansion and multiple expansion.
• I think this stock has got all three of them. I think the company has reached an inflection point in the past few years in terms of product and service offering with SaaS revenue of $100m and growing 50% YoY.
• Overall service and subscription revenue being 30% of revenue, up from 24% 3 years ago. With an overall very sticky revenue base with high switching costs. 

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

• MSCI announced the changes to the Standard and Small Cap Indexes, along with FIF/NOS changes as part of the May SAIR. Plenty of flows in Asia Pacific.
• Announcement of changes to the FTSE AW/AC, HSI INDEX, HSCEI INDEX, HSTECH INDEX and SENSEX INDEX will be made after market close on Friday.
• There were inflows into Taiwan, Australia and Hong Kong focused ETFs, while there were redemptions from China and Korea focused ETFs.

• Online auto parts and service provider Infomedia Ltd (IFM AU) has received a non-binding proposal  – by way of a Scheme – from TA Associates and Viburnum Funds. 
• The Offer price is A$1.70/share, a 32.8% premium to last close. 
• Via a tie-in with Viburnum, TA disclosed a 14.46% interest.  IFM said it is also in preliminary discussions with other interested parties. 

• Maxell Ltd (6810 JP) has been restructuring itself and the cost-cutting and rationalising of sales efforts and regions has led to post-relisting record OP.
• But another (non-cash) write-off this past year has led to the third year of net losses in a row.
• The company has, however, taken its actual cashflows and turned them into a large buyback

• The NTT (9432 JP) / NTT Data (9613 JP) transaction is a little complicated, but the end goal appears, like before, to push operating control below holdcos on the chain. 
• Both Link Administration (LNK AU) and Dye & Durham tanked over the unfortunate timing of an ACCC delay and MAC disconnect – before a price recovery to close the week.
• MCB says the AGL Energy Ltd (AGL AU) de-merger plan is bad, and now analysts say it is “underwhelming.” Duh.  But the alternative? Underwhelming too, but less independent.

• This is the second weekly series on the “Top 20 Best Performers in the Korean Stock Market Adjusted for Trading Value & Mkt Cap.” 
• Starting this weekly, we include stocks in both KOSPI and KOSDAQ. All the stocks in KOSPI and KOSDAQ are ranked, adjusted for market cap and trading value. 
• Among the top 20 performers, NCSoft, Hyundai Motor, Kia Motors, Dohwa Engineering, DB Hitek, SK Telecom, and KT Corp were included. 

• The 1Q22 revenue/GM/OPM was US$215mn/55%/36% respectively, with revenue growing 50% YoY and -2.6% QoQ. Silergy considers its own business will grow quarter by quarter in 2022.
• Silergy expects to see ~3% revenue contribution for Automotive in 2022, which means it should grow over 3% by the end of 2022.
• Silergy’s order visibility is extended from 3 quarters to over 6~8 quarters now. Meanwhile, Silergy aims to split the share to let more retail investors to hold their shares.    

• TA Associates and Viburnum Funds’ non-binding indicative privatisation proposal is A$1.70 per Infomedia Ltd (IFM AU) share in cash, a 32.8% premium to the last close.
• The timing of the bid looks opportunistic in the context of the shares hitting a 3-year low on 9 May. Viburnum with a 14.5% stake is the largest shareholder.
• The Board notes expressions of interest from other parties. TA and Viburnum’s bid is the catalyst for other bidders to show their hands.  

• Greenhaven Road Capital Partners Fund returned approximately -26.5% net in the first quarter.
• The three big factors that currently appear to be dominating investors’ focus are rising interest rates/inflation, rising oil prices, and war in Ukraine.

• Polen Capital is a high-conviction growth investment manager.
• During the first quarter of 2022, the Polen Focus Growth Composite Portfolio returned -13.39% and -12.56% gross and net of fees.

• Polen Capital is a high-conviction growth investment manager.
• We scour the globe in search of the highest quality, sustainable companies to invest in.
• Aon, Visa, and Mastercard were the top absolute performers during the quarter.

• There are quite a lot of stocks that have changes to their Foreign Inclusion Factor (FIF) at the May SAIR since MSCI comprehensively assesses the float for stocks.
• The largest passive inflows will be on Tencent, Kuaishou Technology, JD Health, Macquarie Group, Shin Etsu Chemical, Recruit Holdings, Olympus Corp, Naver Corp and Sun Hung Kai Properties.
• Changes to FIFs are tougher to forecast and not very widely tracked, so pre-positions are likely to be lower and the stocks with higher ADV to buy/sell should outperform/underperform.

• DND’s 3QFY22 last night continued to suggest DND’s commitment to complete the Link Administration Holdings (LNK AU) acquisition.
• DND management’s messaging in the call downplayed the MAC risk of a contract renewal but shifted incrementally more bearish on the ACCC review, in our view.
• The risk-reward calculus is now incrementally more positive. The gross spread is wide at 24.4% with the “deal-break” valuation of A$4.18 (-5% below the last close) limiting downside risk.

• BASE Inc (4477 JP) is up more than 27% today as the Mothers Index bounced back 4.5% following a steep sell-off during the last one-month period.
• Nevertheless, results were disappointing on both the top line and the bottom line with Q1 revenue and operating loss of ¥2,512m (consensus ¥2,659m) and ¥272m (consensus ¥139.2m) respectively.
• After disappointing the market with a guidance range that was significantly below consensus in 2021, Base Inc has withheld from providing 2022 guidance.

• Downtrends remain intact for Japan’s TOPIX/Nikkei 225, Hong Kong’s Hang Seng, Europe’s EURO STOXX50, Germany’s DAX, China (MCHI-US), and all the MSCI global indexes (ACWI, ACWI ex-US, EM, and EAFE).
• The majority of these indexes are in well-defined downtrends; that means when the downtrends eventually reverse, it will be clear and we will be ready to buy/turn bullish.
• Relative strength on Japan’s TOPIX is reversing topside a 4.5-year downtrend, signaling Japan is emerging as leadership. We highlight buy opportunities in Japan and also in defensive Sectors

• Shufti Pro (1988739D LN) provides AI-based identification verification solutions offering real-time global identity verification for KYC/AML and KYB compliance.
• In 2020, the company grew its revenue by over 100% due to strong adoption skills and flexibility allowing to capture the growth in demand due to the COVID-19 pandemic.
• While flexibility helps Shufti Pro stand out from competitors, global expansions, growth in identity fraud and a number of strong partnerships would drive company revenues over the medium-term.

• Polen Capital is a high-conviction growth investment manager.
• Over the first quarter of 2022, Polen Global SMID Company Growth Composite Portfolio returned -22.37% gross and – 22.48% net of fees, respectively, versus the -6.41% return of the MSCI ACWI SMID Capitalization Index.

• Sift Science (0747031D US) uses machine learning to help companies with detecting fraud, fake accounts and money laundering.  
• The company’s business is claimed to have tripled since 2018.
• The growth of internet crime and increasing account takeover fraud will act as drivers for the company.

• Hummingbird Technologies (1681343D LN) allows companies without easy access to IT or engineering resources carry out anti-money laundering practices.
• Unmet demand in the AML market, strong partnerships and expansion to new markets are expected to act as key drivers.  
• The company claims to allow clients reduce investigation and reporting times by 70-90%.

• Polen Capital is a high-conviction growth investment manager.
• Over the first quarter, Polen U.S.
• Small Company Growth Composite Portfolio returned -21.98% gross and -22.18% net of fees, respectively, underperforming the -12.63% return of the Russell 2000 Growth Index.

• Polen Capital is a high-conviction growth investment manager.
• Over the first quarter of 2022, Polen International Small Company Growth Composite Portfolio returned -22.48% gross and – 22.73% net of fees, respectively, versus the -6.

• Softbank reported record losses, as expected, including some writedowns in the private portfolio. That may not be enough to assuage concerns with valuations still in free fall
• Management says tech’s day will come again and it is best to be more defensive for now, including a slower pace of investing, which we think is positive
• Concern on weak tech and high leverage likely keep the discount in the mid-50s range.  There was nothing today to signal an inflection is at hand

• TEL generated ¥169bn in OP in 4Q, well above consensus at ¥150bn and even our ¥160bn estimate. 
• The issue is that this was on ¥565bn in revenue, well above ourselves and consensus, due to ramping R&D and depreciation expenses. 
• Those expenses also meant that guidance of ¥716bn in OP was just barely above consensus at ¥692bn.

• MicroStrategy Inc Cl A (MSTR US) is now trading at a ~26% discount to NAV as the bitcoin barbeque continues.  
• Bitcoin is down ~40% YTD. If it falls another 24%, this will trigger a margin call on one of its loans.
• Should bitcoin decline to US$17.5k, MSTR’s crypto bet falls short of its debt obligation; debt that its software ops are not sufficiently profitable enough to service. 

• Sumco 1Q revenues were on the strong side, 1.5% above consensus but OP beat by 9.9%. 
• As we have been flagging, consensus is underestimating operating leverage and that was before the weakening of the yen. 
• Revenue guidance for 2Q was 4.9% above consensus and OP 12.8% higher but we expect results to be an even larger beat.

• XPER reported first quarter results setting the path for the Company to generate approximately $200 million in free cash flow in 2022
• The outperformance on the revenue line resulted in XPER exceeding our non-GAAP net income and EPS estimates
• During the first quarter of 2022, XPER renewed a license with a virtual multichannel video programming distributor (“MVPD”)

• ARLO continued to grow the number of paid subscribers as consumers see the benefits of having an alert for their installed security cameras
• ARLO reported a positive net income for the second straight quarter just as the firm is getting ready to launch a new brand awareness campaign in 2H22
• ARLO reiterated its plans to increase marketing expense in the second half of 2022 to accelerate growth in 2023

• The supply chain issues that became an obstacle for Ubiquiti (UI) have yet to abate. Ubiquiti missed fiscal third quarter (March) estimates with a meaningful decline in service provider revenue
• The Company burned through inventory in the quarter and used its cash flow to aggressively repurchase shares
• Ubiquiti’s foray into services should broaden the revenue stream and improve cash flow, but it could be another few quarters before this becomes a needle moving endeavor

• AVYA has exhausted investor patience in the Company’s quest to transform into a subscription revenue business
• Liquidity overtaking the conversation from ARR could have bigger impact to the stock price as investors try to assess the timing of when AVYA could generate free cash flow
• AVYA reported fiscal second quarter revenue of $716 million below the Company’s guidance and our $739 million estimate

• Link Administration Holdings (LNK AU) cratered this morning ahead of a pause in trading. 
• Link said it is unaware of the reason for the decline; however, the unfortunate timing of the ACCC delay and the MAC disconnect between Offeror and Target are not helping. 
• Break price fair value has emerged. Separately, Link is coming up “cheap” versus its holding in PEXA Group (PXA AU).

• Link Administration Holdings (LNK AU) claims to be not aware of any reason for today’s -15% share collapse. The market seems nervy that DND will exhibit buyer’s remorse. 
• The scheme consideration is now 2.6x DND’s market cap. The ACCC delayed review and the contract renewal MAC clause could be DND’s get-out-of-jail-free card for a lower price/walk-away. 
• Our “deal-break” SoTP valuation suggests a valuation of A$4.24 per share, which is broadly in line with the last close price. The next catalyst is DND’s results tomorrow.

• Ricoh Company Ltd (7752 JP) announced earnings disappointed, but guidance is above forecast as some Q4 business was pushed back.
• The company also announced a buyback. The headline at 7.5% of shares out is big. Reality is lower. 
• This sets up a somewhat complex dynamic of flows in near space and far space, and relative to peers. But we look at it anyway.

• TSMC decided to notify clients that it will raise wafer price about 6% from the beginning of 2023.
• It’s believed the Fabless company’s margin could be raised too much, which is considered to be abnormal.
• There are too many factors influencing the market right now, like the inflation, geopolitical confrontation,  Russia-Ukraine war, supply-chain risks, and etc.

• Capcom results were previously flagged with a late guidance upgrade and so were unsurprising. 
• Guidance was a touch above consensus at both the revenue and OP levels but look somewhat conservative even on assumed unit volumes. 
• But we think there is significant upside to unit volumes and Capcom’s biggest challenge will be to hold down profit so they can generate double digit growth the year after.

• We think SMIC is likely to reach the high-end of 1Q22 guidance, which was US$6,259~6,368mn/36~38% respectively.
• We thick SMIC is likely to reach ~US$6,680mn/39% for revenue/GM respectively in 2Q22.
• SMIC cannot have the EUV machine because of the Wassenaar Arrangement. Therefore, SMIC has to optimize its operation and to expand 28nm and above technologies.

• Coupang reported better than expected results in 1Q 2022. Coupang had operating loss of $205.7 million in 1Q 2022, which was 31% better than consensus. 
• This is a High Conviction turnaround story marked by significant improvement in profit margins. The company’s gross profit increased by an impressive 42% YoY. 
• Given Coupang’s excellent earnings in 1Q 2022, the tide has turned on Coupang and there is likely to be improving positive sentiment on this stock in the next several weeks.

• Chainalysis (1316611D US) is a leading blockchain data platform which helps carry out investigations into illicit crypto activity and hence prevent crypto crime.
• Around 2/3rd of Chainalysis’ revenue comes from government agencies and the company is said to have generated around US$ 10m from Federal Organisations since inception.
• There are now several growth drivers including a fast-rising level of crypto crime, growing cryptocurrency market and implementation of cryptocurrency regulations among others.

• Ayasdi (0343503Z US) is somewhat unique in it using a mathematical framework – topology, to analyse data sets and detect financial crime and fraud.
• The company follows a quote-pricing model, but pricing is generally considered less expensive than the industry average.  
• The growth of financial crime and the bioinformatics industry alongside improved recognition for the company can be expected to drive future revenues.

• Forter (1397978D LN) uses machine learning to detect fraud and approve online transactions in real-time.
• With the surge in online shopping with COVID-19, the amount of online fraud increased, allowing Forter to experience strong revenue growth.
• New product innovations and a number of strong partnerships will continue to drive the company forward.

• Nintendo has announced in-line-ish results for March 2022, and quite disappointing forecasts for March 2023. Mio Kato called it on 30 March as a sell. Excellent timing. 
• Nintendo has a buyback tomorrow and if you don’t like the guidance, you should DEFINITELY read on below.
• But Nintendo also announced something truly extraordinary – a stock split. Everyone pooh-poohs the impact of a stock split but… in this case it is probably not nothing.

• The Supreme Court of New South Wales today approved the convening of a Scheme Meeting for Link Administration Holdings (LNK AU) on the 13 July.  
• The Explanatory Booklet has been registered with ASIC. The Independent Expert (Deloitte) has concluded that the A$5.50/share Scheme Consideration is fair and reasonable. 
• Separately, the Offeror, Canada’s Dye & Durham, has seen its shares decline 57% since the release of its 2Q22 results.

• Nintendo results were in-line with both revenue and OP within 1% of consensus. 
• Guidance was extremely weak missing consensus by 5.5% at the revenue line and 20.5% at the OP line. 
• Nintendo gonna Nintendo so this is nothing to panic about but it isn’t positive either… though the stock split is.

• The Link Administration Holdings (LNK AU) scheme meeting is scheduled for 13 July. The independent expert has concluded that the Dye & Durham (DND) offer is fair and reasonable.
• The offer faces significant risks which are ACCC review (findings delayed from the 26 May release date), a contract renewal potentially triggering the MAC clause and an ongoing FCA investigation.
• At the last close, the gross spread to the base offer is 10.7%. We would be buyers up to A$5.20 per share (implies 75% deal probability).

• The firm was founded in 1995 by Daniel S.
• Loeb, who serves as Chief Executive Officer.
• During the First Quarter, Third Point returned -11.5% in the flagship Offshore Fund.
• The path to wringing out the excesses in the financial system will be bumpy and create clear winners and losers.

• For the first quarter of 2022, Aristotle Atlantic’s Large Cap Growth Composite posted a total return of -9.61% gross of fees.
• We have also entered a period of increased geopolitical risks that will add to market volatility, according to Aristotle Atlantic’s Large Cap growth Composite.

• Despite not dealing with celestial objects, the company itself is a grouping of vertical market software companies, of which are obtained based upon a set of rigid principles and quantitative standards that I will touch upon in later sections of this report.
• In addition, I would argue that much like constellations (in the astronomical sense of the word) being associated with mythical figures, CSI is directly tied to one of the most elusive, mysterious and fascinating business personalities of our era, Mark Leonard, someone you can see if you look close enough in the night’s sky.  
• Out of all of the publicly traded companies I have written about thus far, CSI stands out amongst the pack.

• For the first quarter of 2022, Aristotle Atlantic’s Focus Growth Composite posted a total return of -9.30% gross of fees.
• In the near term, a recession seems unlikely with key economic indicators like the ISM Manufacturing Index pointing to an expanding economy.
• The ISM manufacturing Index points to an growing economy.

• Apple and Microsoft are pressing on pivotal supports that would weigh on the US equity cycle after the April 26 red flag for defensives and resource stocks to sell off.
• Mounting to break AAPL and MSFT key supports at 150 and 270 that would inflection the SPX cycle further given the SPX is flirting with a key break below 4,100/4,030.
• AAPL and MSFT support breaks target AAPL 120 and MSFT 220.

• When we reviewed Appier’s 2021 results we rambled on about the US for about half of our note discussing explosive growth potential. 
• We said that while Appier touted a >50% QoQ growth rate in the US we suspected it was actually closer to 100%. 
• In 1Q it accelerated to >180% QoQ growth prompting the sell side to go all surprised Pikachu.

• Meta Platforms surprised investors in Q1 but not because the quarter was outstanding. Rather, it wasn’t as bad as some had assumed.
• In an unusual turn of events, Zuckerberg’s earnings call appearance resulted in whispering sweet nothings into investors’ ears
• However great that might be, the quarter provided no conclusive update on the loss of signal from Apple’s iOS updates, with management offering on-platform messaging/commerce as a potential sidestep

• Delhivery (1058656D IN) IPO will run from 11-13th May. The company plans to raise INR52.35bn (US$680m) through the issuance of a mix of new shares and OFS by existing shareholders.
• At the indicative IPO price range of INR462-487 per share, Delhivery will have a market capitalisation of INR334.7-352.8bn and a post-money EV of INR294.8-312.9bn.
• Delhivery plans to use the IPO proceeds for funding organic growth initiatives such as building scale and expanding network infrastructure as well as for funding inorganic growth.

• We have been Bearish on Coupang since 12 May 2021. Now we are turning Positive since we believe the valuations have become a lot more attractive. 
• We highlight four major factors that could result in higher profit margins for Coupang in 2022 including competitors exiting early dawn service, lower COVID and EATS related costs. 
• Our base case valuation of Coupang is implied market cap of $24.9 billion and target price of $14.1 per share, representing 32% upside from current levels.

• For the first quarter of 2022, Aristotle Capital’s Global Equity Composite posted a total U.S.
• dollar return of -9.19% gross of fees (-9.28% net of fees) The company is an independent/employee-owned investment management organization that specializes in equity and fixed income portfolio management.

• On 6th May 2022, Larsen & Toubro (LT IN)‘s publicly-listed subsidiaries Mindtree Ltd (MTCL IN) and Larsen & Toubro Infotech (LTI IN) announced plans to merge.
• I discussed this situation previously in Mindtree-LTI: A Potential US$20bn+ Indian Tech Merger; Mindtree Could Outperform LTI when the ratio was 0.66, expecting a scrip ratio north of 0.70.  
• Below is a closer look at the details of the transaction and the outlook for the combined entity.

• Revenue growth ex-SPAC decelerated to 19% this quarter, 11% below consensus.
• 1Q22 20% operating margins vs. consensus 27% margins as the company invests to reaccelerate growth in 2H from rising government contracts due to war.
• Alex Karp warns that nuclear war in Ukraine is being dramatically underestimated.

• Canon Inc (7751 JP) on Monday announced a share buyback programme.
• It isn’t very big. But it bears consideration because of other things going on. 
• Shareholder structure is of much more importance than many investors appreciate. Here even more so.

• Hon Hai’s revenue was NT$1,408bn in 1Q22. We expect the OPM and EPS would be ~2.2% and ~NT$2.18 in 1Q22.
• It’s a gradually increase for end-product shipment in 2021, but we think it might be followed by a slower season in 2Q22.
• Hon Hai’s target is to address the profit in 2022. For 2022, we believe it could be the lowest revenue in 2Q22.

• The Larsen & Toubro Infotech (LTI IN) and Mindtree Ltd (MTCL IN) merger will create a company with revenue of US$3.5bn and a market cap of US$18bn.
• The merger ratio is 73 shares of Larsen & Toubro Infotech for 100 shares of Mindtree. The merger is expected to complete in 9-12 months. 
• There are likely to be some inflows from MSCI and FTSE trackers but the big kicker will be inclusion in the NIFTY Index – but a (smallish) rally is needed.

• Tokyo Electron reports FY3/22 results on 12 May. We expect the company to meet guidance and analyst expectations  
• But the outlook may disappoint. Management may guide FY3/23 more conservatively than analysts who are looking for operating profit to grow 20% to ¥700 bn 
• Despite favorable industry conditions and strong outlook for WFE, we think that the stock could continue to de-rate

• Crypto complex down double digits over the past week as yields climb beyond 3% and major asset classes all trade lower with heightened correlation. NFTs also down significantly. 
• TerraUSD (UST CURNCY) has depegged from USD1 and is again potentially at risk for the dreaded death spiral coupled with Terra (LUNA CURNCY) 
• As UST and LUNA have a combined market cap of around $40 billion, it could present systematic risk implications for crypto 

• The Nasdaq 100 is approaching some supports around 12,200 which may hold on first attempt
• However in the bigger picture they do not look particularly strong
• Instead there is a danger that overall we continue to trend down towards the 11k area

• The review cutoff for the FTSE All-World/All-Cap June QIR is 11 May. The changes to the MSCI indices for the May SAIR will be announced on 13 May Asia time.
• The review period for the KOSPI2 INDEX, KOSDAQ 150 Index, Shanghai Shenzhen CSI 300 Index, STAR50 INDEX and the SENSEX INDEX ended last week and there are changes.
• ETF inflows were larger than outflows for nearly all Asian markets. The largest inflows were in the Hang Seng H Share Index ETF (2828) and Vanguard Aust Shares Etf (VAS).

• JCET reported revenue/GM RMB$8,138mn/10.7% in 1Q22, which grew 21.2% YoY and 0.5% QoQ.
• We expect that its growth would continue and likely reach to revenue/GM for about RMB$8,234.5mn/10.8% in 2Q22.
• Although the mainland China insists in the Zero Policy against COVID-19, the GDP growth was targeting at ~5.5% in 2022. 

• Delhivery (1058656D IN) is the largest and fastest-growing 3PL express parcel delivery player in India. It will launch its Rs52.4 billion ($0.7 billion) IPO on 11 May.
• In Delhivery IPO: Yet to Convincingly Deliver, we noted that the negatives outweigh the positives.  
• In this note, we look at the valuation metrics. We think that Delhivery is at best fairly valued at the IPO price range.