Daily Brief TMT/Internet: Adtran Inc, iQIYI Inc, Shift Up Corp, Acal PLC, Tencent, VA Corporation and more

• In this insight, we take a look at Quiddity’s estimates for the names leading the race to become ADDs/DELETEs for the DAX, MDAX, and SDAX Indices.
• At present, I do not see any movements between the DAX and MDAX indices.
• However, there could be two changes between the MDAX and SDAX index and there could be one more ADD/DEL for the SDAX index.

• We forecast iQIYI 1Q23 top line/bottom line to miss cons. by (3.6%)/(6.3%), largely due to the rebound of content costs to cope with competition pressure. 
• We raise our full year ads revenue estimate slightly to reflect the better-than-expected macro recovery. Our top and bottom lines in 2023 are (3.3%)/(7.0%) vs cons, due to long-term competition. 
• Maintain SELL but slightly raise TP to US$ 5.60, implying 18.4X PE in 2023.

• In this insight, we provide 2022 key income statement items of 12 major unlisted companies in Korea that are likely to complete their IPOs in the next 6-12 months. 
• Among these 12 private companies, the top five with the highest sales growth in 2022 include Shift Up, Foosung Global, Ecopro Materials, Nexteel, and Smilegate RPG.
• The top five companies with the highest operating profit growth in 2022 include Nexteel, Ecopro Materials, CJ Olive Young, Foosung Global, and Smilegate RPG. 

With Q423 trading slightly better than expected, discoverIE is on track to deliver FY23 underlying earnings ahead of board expectations. The year-end order book was also higher than anticipated due to stronger than expected order intake in Q423, providing good visibility for FY24. We have upgraded our underlying EPS forecasts for FY23 and FY24 and reduced our net debt forecasts over the same period.

• China just announced game approval for April batch. The number of games approved is in-line with the pace of approval in recent month.
• Pace of China game approval stays flattish, at a much slower pace than pre-tightening.
• Both Tencent and Netease received approval for none. Tencent is behind its peers since the approval resumed.

• Founded in 2021 and headquartered in Seoul, VA Corporation (VA KS) has developed a virtual media platform for the metaverse industry.
• Through the use of VR, the company’s metaverse platform provides services from planning and production to branding and distribution of content.
• The company achieved the unicorn status within 13-months of its founding due to its proven track record, making it an attractive investment in the metaverse space.