United States

• At the EGM held on January 31, O2Micro International (OIIM US)’s shareholders approved the Merger Agreement. Completion was subject to satisfying certain conditions, which appeared rudimentary. 
• An equity corporate action notice released yesterday (15 February) indicates the last day of trading will be the 24 February, with an effective date of 27 Feb.
• O2Micro is currently at a 2.7% gross spread. At the other end of the spectrum, Glory Star New Media (GSMG US) is at a staggering 79% spread, despite shareholder approval.

• We expect ACMR to report C4Q22 top-line, non-IFRS operating profit, and IFRS net income in-line, 21% and 96% vs. consensus, respectively. 
• New SPE import limits provide ACMR with a multi category quasi-monopoly. Thus, we raise our FY23 market share estimate for ECD/wafer clean/furnace to 51%/32%/2% from prior 25%/25%/0%.
• ACMR’s quasi-monopoly position in multiple categories sustain its long-run growth, which underlines a 58% TP increase to US$ 30 and continued status as our top hardware pick.

• NHTSA has recalled all Teslas with FSDBeta, more than 362,000 cars. 
• This comes just before Tesla releases substantial upgrades to Autopilot including the return of radar. 
• Which means NO legacy Teslas really are FSD hardware ready, despite what CEO Elon Musk has claimed for years when selling the option for thousands of dollars

• MSTR US has rallied strongly in 2023 (+138%), peaking at a new 6 month high of 315.00 on 16 February 2023.
• The 315.00 peak was plagued by extreme ST momentum failure and new highs were quick to fail and reverse.
• Our TSS methodology triggered a TSS < 10 at the high and justifies a further 10-13% decline in the coming 1-2 weeks.

• The crypto industry was again shaken this week when news came out that the NY Department of Financial Services (NYDFS) had ordered Paxos to stop issuing BUSD, with an NYDFS spokesperson saying Paxos “violated its obligation to conduct tailored, periodic risk assessments and due diligence refreshes of Binance and Paxos-issued BUSD customers to prevent bad actors from using the platform.”
• Additionally, it was revealed that the Securities and Exchange Commission (SEC) sent a Wells notice to Paxos, informing the company that the SEC is considering legal action against Paxos, alleging that BUSD is a security. (I’ve offered my thoughts on the regulatory aspect of this here.) 
• We’ve covered BUSD’s growth and market share extensively in previous Data Debriefs, noting that about 35% of Binance volume is denominated in BUSD and it quickly grew to the third largest stablecoin by market cap

• We forecast that Unity’s top line/bottom line would be 2.8% /24.7% vs cons. in 4Q22, with  synergies from ironSource merger to take effect and gaming market to gradually recover. 
• Price increase for Create segment and improved monetization for Operate segment would further boost the company’s 2023 outlook, leading to top line/bottom line beating cons. by 3%/55%.
• Due to our optimism of both industry and company uptrend, we upgrade to BUY and raise TP to US$ 48.2, implying 7.2X PS/ 159X PE in 2023.

• EEM topped ahead of the DXY 101 bottom (lead) showing strong synergy with our bull DXY and bullish yield charts from last week.
• Bull divergence implies a 2-3 month USD and yield up cycle is in store. EEM rising channel breakdown due.
• HK was the first to crack trendline support. Korea is a weak link. India is one of the clearer shorts. Australia, Taiwan and then Japan are set to roll over.

• We continue to expect the 4165-4200 level to cap upside on the S&P 500, but cannot rule out a trip to 4300-4325 (August 2022 highs)
• Either way, we continue to preach caution and believe that upside is limited on the market indexes.
• Treasury yields are starting to reverse above multi-month downtrends, and we are monitoring for similar reversals on the U.S. dollar (DXY) and high yield spreads.

• Thermo Fisher produced a solid set of results in the fourth quarter, with impressive growth in the low teens for the quarter and mid-teens for the entire year.
• The management saw a decent growth in industrial and produced significant year-over-year growth in the businesses of mass spectrometry, chromatography, and electron microscopy.
• Overall, we give Thermo Fisher a ‘Hold’ rating with a revised target price.

• This is a special, one-time report on Catalent, a leading contract manufacturer and provider of advanced delivery technologies, development, and manufacturing solutions for drugs, biologics, cell and gene therapies, and consumer health products.
• This report aims to examine the factors that could influence Catalent’s valuation and provide an unbiased assessment of the company’s worth.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• T-Mobile has recently been in the news for suffering from a major network outage affecting around 83,000 customers.
• T-Mobile added many new customers but the company ended Q4 on a mixed note.
• Their financial results also enabled them to launch share repurchases earlier than anticipated and speed up network rollouts.

• Alphabet is going through a tough period.
• The company’s stock is losing value given the expected impact of the popularity of ChatGPT on its Search revenues.
• We downgrade the stock of Alphabet and give it a ‘Hold’ rating with a revised target price.

• Virgin Orbit’s first international launch, after four 100% successful commercial ones, failed to deliver its payload because an in-line fuel filter was dislodged, which caused a fuel pump to run in a degraded mode.
• Thus, the engine was starved for fuel and the rocket did not deliver its payload.
• On the January 9 attempt, Cosmic Girl released the rocket, which began accelerating to 11,000 mph.

• Amazon delivered a mixed result as its worldwide net sales grew by 12% year over year which was above the expectation of Wall Street.
• The company worked hard to secure millions of deals and offer low prices for customers this quarter, including its foremost Prime Early Access Sale and the Thanksgiving.
• In the quarter, Amazon customers spent more on everyday essentials and shifted to lower-priced and value brands in electronics.

• Ametek continued to deliver excellent results with strong growth in the fourth quarter as well.
• The company delivered an all-around beat in this quarter and has seen a positive impact in the organic growth initiatives.
• On the other hand, the organic sales growth was 9%.

• NDX continues to hug lower range support after meeting the 13k short level. 12,050 is the level to break to ratchet lower to 11,800. Ultimately, new lows attract.
• Use an uptick to add to this short and linked assets. USD strength, higher yields will weigh on tech going forward.
• A rotational shift is due that favors a more defensive stance. 

• Waste Management delivered a highly disappointing result in the last quarter and did not live up to analyst expectations with respect to revenues as well as earnings.
• They observed a slowdown in the rate of labor increases and remained committed to managing operating costs and bending costs to match shifting volumes.
• The company advanced its planned recycling investments and provided more details in the supplemental presentation on its website.

• Bio-Techne delivered a disappointing result in the last quarter while failing to meet Wall Street expectations in terms of revenues as well as earnings.
• The company also noticed the strongest effects of decreasing biotech spending in Q2 in North America.
• The multiyear growth rates in North America remain in double digits and are consistent with its long-term objectives.

• Monday.com Ltd.’s Q4 earnings report could be the catalyst investors have been waiting for.
• The company’s sustained hyper-growth trajectory is assisted by the successful integration of CRM tools and a synergetic marketplace.
• monday.com Ltd. (NASDAQ:MNDY) released its Q4 earnings report on Monday morning. The company’s quarterly results beat analysts’ estimates comprehensively, which caused MNDY stock to surge.

• Viavi’s result for the second quarter of 2023 performed better than Wall Street expectations as the company delivered an all-around beat, driven by NSE performance aided by stabilization in service provider demand and spending.
• The company’s OSP business increased year over year and performed within the forecast.
• NSE decreased sequentially and year over year due to weaker fiber and wireless lab product demand.

• Downgrading to Neutral from Buy. Target is now $6 from $9.
• ACCO faces greater challenges than could be currently priced in the stock with a longer duration of retailers rebalancing inventory against a weak consumer spending environment
• We have grown concerned the softness ACCO experienced in the third quarter of 2022 could spill over into 2023

• Meta Platforms performed a mixed result with earnings below expectations, ending a rather difficult fiscal year.
• The management claims that number of daily users of Facebook, Instagram, and WhatsApp is at an all-time high.
• Facebook’s engagement is decent, and it is expanding globally, with over 2 billion daily and approximately 3 billion monthly active users.

• Qorvo delivered a strong set of results and managed an all-around beat.
• Its power business in particular, reported a successful quarter with active design work for its silicon carbide power products.
• For WiFi products in their Connectivity and Sensors Group, the third quarter showed decreased end-market demand and channel inventory consumption.

• Skechers had a solid result in the last quarter, reaching $7.4 billion in sales annually, an astounding rise of over $1.1 billion year over year, driven by worldwide expansion across all channels.
• Sales in the Americas increased 22% year over year in the fourth quarter to $925.6 million, driven by double-digit growth in every channel.
• In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

• Peloton delivered a mixed performance in the quarter as its revenues were well above Wall Street expectations but the company’s losses were wider than expected.
• Peloton’s reserves, related to the stock from their Tonic production facilities, decreased their Connected Fitness gross margin by around $32 million for the quarter.
• FaaS has doubled and expanded quickly in the quarter though it does face significant competitive threats from players like Tonal.

• January CPI is due on Tuesday 14th and the market is expecting the biggest rise since October
• The SPX has rallied over 7% since December but the Yield Curve has been moving higher and the equity rhetoric is turning negative
• We look at a short-term trading opportunity in the options market to play the print

• Over a dozen companies focused on building out Electric Vehicles have gone public through a SPAC merger in the past two years, albeit with mixed results.
• Legendary Motorcycle Maker Harley Davidson shocked the public markets in 2021 when it announced that it was spinning off its EV segment LiveWire through a $1.8 billion SPAC merger.
• The move came as the legacy bike maker has faced a period of slowing sales, losing market share to competitors, and failing to reach younger first-time riders.

• Bakkt is enhancing its focus onto scalable B2B2C products and sunsetting its consumer app.
• Bakkt will continue its core focus of providing businesses with crypto and loyalty experiences for their customers through SaaS and API solutions on a secure and compliant platform.
• President & CEO Gavin Michael commented that as the company continues to “gain traction with our B2B2C strategy, we are laser focused on providing our partners and clients with seamless solutions that best serve their needs.

• Coca-Cola delivered nearly 36% total return in a matter of only two and a half years.
• There are a number of positive signs leading to a high probability of a dividend increase during 2023, according to the company’s full-year 2022 results.
• Coca-Cola (NYSE:KO) has been one of the best-performing large-cap consumer staple companies in recent years.

• Bitcoin sold off in December and rallied in January for a reason.
• Big banks are coming with a digital payments option. Big banks will have a digital payment option in the coming days.
• Bitcoin sold off last month and rallied again in January, with a rise in popularity in the wake of contagion.

• Price Movements: cbETH, Coinbase’s liquid staking derivative, started trading at a discount after news broke that the SEC had fined Kraken $30mn. 
• Market Liquidity: LocalBitcoins shut down after 10 years of service after competition and a prolonged bear market sapped trade volume. 
• Derivatives: ETH options markets look bullish but more volatile than BTC. 

• The stage is set for an equity/risk off decline after the SPX met our 4,200 rally objective as have Asian and European indices.
• We are treating the DXY 101 low as a key USD turn support that will see dollar upside follow through on the back of a bullish 10 yr yield breakout.
• Equity weakness due from mid- Feb into Q2. NDX is hovering near pivotal lows (tech/growth U/P). Scales are tipped toward new lows.

This is Part 1 of our exclusive deep dive on “Sogo Shosha”, or Japanese trading companies.

We’ve decided to break this deep dive into two parts given its length.

Part 1 will build the foundation and covers the business, history, and a discussion of Berkshire’s investment.

• Lululemon Athletica Inc.’s calendar year margin compression is due to variable costs that will probably adjust lower this year.
• Many analysts mistake’monetized costs’ such as excess amortization for cash costs.
• Lululemon Athletica Inc. (NASDAQ:LULU) stock has surged by nearly 2000% since its initial public offering in 2007.

• Electronic Arts delivered a mixed set of results in the last quarter.
• In the quarter more than 10 million new players entered into the community which drives strong engagement.
• The player network of EA also continues to grow and its flagship, EA SPORTS FIFA delivered strong engagement this quarter across the company’s entire ecosystem.

• Church & Dwight delivered a strong set of results in the last quarter, with revenue growth of around 0.4% that was beyond Wall Street expectations.
• Its international business delivered 3.2% organic growth, driven by impressive performance across international subsidiaries.
• On the other hand, TROJAN condoms returned to share growth, while OXICLEAN stain removers and ARM & HAMMER baking soda achieved double-digit consumption growth.

• Corning faced the impact of a series of pandemic-driven effects during the last quarter but the company managed to deliver an all-around beat.
• The purchase of laptops, tablets, smartphones, televisions, and cars was below the company’s estimation in the last quarter.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• Equinor rose 75% over the three-year period but has stalled.
• European gas prices may be nearing a bottom, according to the company.
• The company’s 10-year outlook looks good after record profits this quarter. It has been offered as an alternative to U.S.

• Exxon Mobil delivered a mixed set of results for the last quarter.
• The company’s cash flow performance was solid.
• Exxon merged its downstream and chemical businesses to create Product Solutions, one of the world’s biggest fuels, chemicals, and lubricants companies.

• Despite high inflation and declining demand in the second half of the year, International Paper managed a fair result.
• Despite the strong marketing efforts, the company failed to meet the revenue expectations of Wall Street.
• International Paper has made strategic investments to support the profitable development potential across its Industrial Packaging business.

• KLA Corp managed to deliver an all-around beat in its last quarterly results, demonstrating steady execution despite the supply chain issues.
• Their customers also continue to invest in technological transitions regardless of the business situation which is a good sign.
• Among new launches, KLA Corporation introduced the Axion T2000 X-ray metrology equipment for memory chip producers that could become a good revenue driver.

• McDonald’s delivered an all-around beat in its last result as it continued advancing its brand’s top-line momentum and global reach.
• For the fourth quarter, comparable sales increased by double digits, and they kept gaining market share in most key markets.
• In addition, McDonald’s Monopoly made a triumphant comeback to the Canadian market during the fourth quarter, enhancing the experience by employing their app.

• Wash trading was at one point a pervasive problem in cryptocurrency markets.
• Today, most major exchanges have strict anti-wash trading measures, which has drastically reduced the problem since the ICO-led trading boom of 2017-18.
• Yet, due to the relatively low barriers to entry for launching an exchange, this type of market manipulation is far from eradicated on lesser-known, unregulated venues. 

• Bill Ackman’s analysis was good, but his timing was poor. Netflix subscriptions recover, but margins fall.
• The outlook for Netflix under a new leadership model is good, according to Ackman.
• Netflix stock bottomed as expected, but it was down for the first time since Ackman took over.

• Beijing’s city market regulator has warned the public to steer clear of firms promising big returns with little risk from investments in non-fungible tokens (NFTs) and the metaverse.
• The statement is the latest indication that China’s watchdogs are unlikely to change their stance on speculative investments like NFTs, a form of digital token, anytime soon.
• The latest warning comes less than two years after China outlawed cryptocurrency trading and mining, also seeking to stamp out rampant speculative investment in virtual currencies like bitcoin and ether.

• Barrick Gold Corporation’s stock is bearish on the premise of underwhelming operational performance and an overblown gold price outlook.
• However, ramp-ups of critical assets are yet to be realized, according to the company.
• Barrick is committed to a substantial share buyback program and promises solid dividends.

• Record high quarterly margins at Disney’s parks and experiences would not be the silver bullet to high shareholder returns.
• Higher future margins are already priced in and with that upside appears limited, even if management executes on its current strategy.
• Disney’s business model is shaken by yet another restructuring, according to the company.

• Abbvie Inc (ABBV US) reported 4Q22 results, with revenue increasing 2% to $15B, mainly driven by Skyrizi and Rinvoq. EPS grew 17% to $3.60, better than consensus and company guidance.
• The company has initiated 2023 EPS guidance at $10.70–11.10, representing a decline of 19–22% YoY, as Humira has started facing competition in the U.S.
• 2023 guidance contemplates the expected headwind from direct biosimilar competition, with the U.S. Humira sales declining ~37%, which is at the lower end of previous erosion projection of 35–55%.

• LiDAR works by emitting laser beams and measuring the time it takes for the beams to bounce back to the sensor.
• By using this information, LiDAR can create a 3D map of the surrounding environment, including the location and shape of objects, such as buildings, trees, pedestrians, and vehicles.
• One of the main advantages of LiDAR is its accuracy and range.

• On February 9, SES announced it was awarded cash grants from the South Korean Central Government, represented by the Ministry of Trade, Industry and Energy (MOTIE), as well as Chung-Buk Province and Chung-Ju City.
• In September 2022, President Yoon Suk Yeol of the Republic of Korea invited Dr. Qichao Hu, CEO and founder of SES, to a meeting, which included CEOs of renowned US technology firms, to discuss how SES and the South Korean government may collaborate to advance next-generation battery technology.
• Following this meeting, SES announced its intention to increase investments in South Korea to support manufacturing and development of its large-capacity Apollo cells.

Immix Biopharma has announced interim response rate data from its newly formed subsidiary, Nexcella, concerning the BCMA-targeting cell therapy NXC-201 in multiple myeloma and AL amyloidosis. The data, presented at the 5th European CAR T-cell Meeting, shows a 90% overall response rate (ORR) in 29 patients (of 42 total enrolled) treated with NXC-201 at the recommended Phase II dose (RP2D). This result is comparable to approved BCMA-targeting cell therapies. Importantly, cytokine release syndrome was manageable, and no neurotoxicity was observed at the RP2D (800m cells). In our view, NXC-201’s potential main point of differentiation is its favorable safety profile, which we believe the latest data supports. Immix will continue to investigate NXC-201 as the first potential outpatient CAR T-cell therapy. This announcement follows the recent initiation of patient enrolment in a new Phase Ib/IIa clinical trial, investigating the use of Immix’s lead asset, IMX-110, in combination with tislelizumab (BeiGene/Novartis’s anti-PD-1 antibody) for the treatment of advanced solid tumors.

• Hesai Group (HSAI US) (HSAI) raised around US$190m in its US IPO.
• HSAI is a manufacturer of three-dimensional light detection and ranging (Lidar) solutions. It has shipped over 103,000 Lidar units from 2017 to the end of 2022.
• We have looked at the company’s past performance and valuations. In this note, we will talk about the trading updates.

• New Relic reported a solid quarter pushing shares up ~18% during the regular trading session as y/y revenue growth accelerated while gross margin and operating income continued to expand.
• We like New Relic’s fundamentals and transformation plan driven across the business. The company raised the outlook for FY23 revenue as 3QFY23 results exceeded guidance. 
• New Relic invites investors to an Analyst Day in May, where the company will announce the FY24 financial plan details and give more color about the updated GTM strategy. 

• Vertex Pharmaceuticals (VRTX US) reported mixed 4Q22 results. Revenue grew 11% YoY to $2.30B, in-line with expectations. Adjusted EPS surged 25% YoY to $3.76, 7% ahead of consensus.
• Revenue was driven by the strong uptake of Trikafta/Kaftrio in multiple countries internationally and continued performance of Trikafta in the U.S. Trikafta/Kaftrio revenue grew 19% YoY to $2.02B.
• Vertex guided for 2023 revenue of $9.55–9.70B (+7–9%), with the low end matching current consensus. The company aims to launch five new products over the next five years.

• New Ruipeng Pet Group (RPET US) is looking to raise at least US$100m in its upcoming US IPO.
• New Ruipeng Pet Group (Ruipeng) is a pet services platform, primarily offering pet care services, supply chain services and local services, covering the entire lifecycle of pets. 
• In our previous notes, we have looked at the company’s past performance. In this note, we undertake a peer comparison.

• Adobe rival Nitro Software Ltd (NTO AU) has granted Potentia Capital due diligence through to the 22 February on the possibility it sweetens its Offer to A$2.20-A$2.30/share. 
• Alludo’s hands are tied to its A$2.15/share Offer price, which it has declared ‘best and final’ and will not be increased – even if a superior proposal emerges.
• But Potentia pitching an Offer A$0.01/share above Alludo’s Offer won’t be sufficient for Alludo and other shareholders to tender. 

• ATEN reported better than expected fourth quarter results, but it was the lack of quantitative revenue guidance that garnering all the attention
• We had highlighted increased macro risks in our January update leading to 2023 becoming dependent on the second half of the year.
• The first quarter is seasonally the slowest period of the year for ATEN, which could be the reason for management taking a conservative approach with 2023 guidance.

• Fiserv’s latest quarterly results were largely expected, and yet the market seemed to be caught off guard.
• Fiserv remains well-positioned to outperform most of its peers and the broader equity market in 2023, according to the company’s latest results.
• Fiserv (NASDAQ:FISV) is often seen as a slow-growth business with a significant share of legacy services and challenged profitability

• Hesai Group (HSAI US) has launched a Nasdaq IPO to raise up to US$171 million at an indicative price range of US$17-19 per ADS.
• We previously discussed the IPO in Hesai Group IPO: The Bull Case and Hesai Group IPO: The Bear Case. 
• In this note, we present our forecasts and discuss valuation. Our analysis suggests that Hesai is unattractively valued at the IPO price range. We would pass on the IPO.

• Over the past two weeks, we have been steadfast in our belief that this current rally/short squeeze is likely to fizzle in the 4100-4165 area on the S&P 500.
• There has yet to be any meaningful deterioration and we cannot rule out the SPX reaching higher, potentially for 4300-4325 (August 2022 highs).
• We continue to preach caution and believe upside is limited on the market indexes. Any combination of a continued strong labor market or hotter-than-expected inflation could upset the market.

• Varo bank published 4Q22 results that revealed lower quarterly cash burn through cost control, but revenue per client declined and the very high customer acquisition cost
• SoFi’s cost reduction success in 4Q22 seems, in contrast to Varo, to have limited revenue loss, thereby bringing SoFi closer to breakeven; it trades at a premium to peers
• These early 4Q22 results signals may provide some read across which we believe could be negative for Dave in particular, as well being a reality check for Inter’s US ambitions

• New Ruipeng is the largest pet care platform in China and second largest globally in terms of no.of hospitals and revenue from pet care services in both 2020 and 2021.
• The company has filed for an IPO in the US and plans to raise at least US$100m through the IPO.
• Though the company’s operations were negatively affected by Covid-19, our analysis shows that intense competition has led to the company losing its market share in the pet care services.

• MAUs grew just 5M or 1% QoQ while ARPU was flat. Little turnaround traction evident despite lots of empty statistics offered.
• Longtime CFO Todd Morgenfeld departing, offers vague margin expansion promises.
• Revenue and opex guidance for 1Q23 below consensus…not good for a consensus long.

• Soluna’s flagship Project Dorothy has now entered ERCOT’s operations phase, putting it on the cusp of energizing and generating revenues. 
• Texas electric grid operator ERCOT, which has held up the project while it created and implemented its Large Flexible Load approval process, has now moved the project through both of its multi-month-long planning and modeling phases where the project was evaluated for its impact on the Texas electric grid.
• A key milestone that allows Soluna to finalize the financing and set operational plans to energize.

• In May 2022, I wrote about ebay, and how they were ‘skating to where the puck is going’ after they announced an exclusive deal to sell Ice Hockey legend Wayne Gretzky NFTs, at the time.
• We haven’t seen much of (2) from Ebay so far, but it looks like they’re trying to push hard on the natively digital front.
• One of the things that I also wrote about was how important a place Ebay became for the reselling of physical collectables during the Covid pandemic.

• The Sprott Junior Gold Miners ETF’s investment strategy provides underwhelming value additivity.
• The ETF is experiencing cross-sectional momentum and hosts an alluring dividend.
• However, such features might not be enough to entice further gains. We do not think the ETF is a sell.

• Verizon emerges from a second year in a row of disappointing shareholder returns.
• The halo effect of Berkshire Hathaway leaving is also contributing to sentiment becoming very one-sided.
• Verizon is still well-positioned to deliver on its strategy while offering a 6.3% dividend yield.