Daily Brief TMT/Internet: ARM Holdings, GLOBALFOUNDRIES , VNG (VinaGame), Shinsung ST, Intel Corp, Kinatico, Lenovo and more

• ARM Holdings (1822695D US) has launched a roadshow for its IPO. Softbank Group (9984 JP) offers 95.5 million ADSs (over-allotment option of 7.0 million ADS) at US$47.00-51.00 per ADS.
• We previously discussed the IPO in ARM Holdings IPO: The Bull Case, ARM Holdings IPO: The Bear Case and ARM Holdings IPO: Valuation Insights. 
• The IPO price range values ARM at a premium to peers’ multiples. DCF sensitivity analysis suggests a need for ambitious forecasts to justify the price range.

• Softbank Group (9984 JP) aims to raise around US$8-10bn via selling some of its stake in ARM Holdings‘ US IPO.
• ARM develops and licences high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.
• In our earlier note, we looked at Arm’s past performance and undertook a peer comparison. In this note, we talk about valuations.

• Globalfoundries may be considering filing a complaint regarding TSMC’s recently announced European JV with three of their customers, Bosch, Infineon and NXP
• Yet they just inked their own deal for a JV with ST Micro in France. What gives?
• In conjunction with their recent CFO hiring fiasco, one wonders if all is well with the GF leadership team. 

• VNG (VinaGame) (VNG US) is Vietnam’s leading, homegrown digital ecosystem. VNG has filed for a Nasdaq listing to raise US$300 million.    
• VNG is the number one mobile games publisher in Vietnam. VNG’s Zalo, Zing MP3 and Bao Moi applications are Vietnam’s leading messaging, music streaming and online news applications. 
• The bull case rests on the core games business’ improving KPIs, return to growth, good revenue visibility, and reducing dependence on critical partners combined with VNG’s improving margin.

• The IPO price range of Shinsung ST is from 22,000 won to 25,000 won and the expected IPO offering amount is from 44 billion won to 50 billion won.
• Shinsung ST produces busbars that connect currents of electric components in secondary battery batteries for EVs and ESSs, and module cases that protect battery cells from external shocks.
• The total order backlog of the company’s products reached 1.5 trillion won at the end of 2022. Order backlog ratio is 14x, which is very high. 

• Tower Semi will pay Intel $300 million to acquire and own equipment and other fixed assets to be installed in the New Mexico facility
• Intel’s termination fee on the failure of the proposed Tower Semi acquisition was $353 million
• It’s quite the clever move and doesn’t require China’s approval…

• Our base case valuation is implied price per share of 51,050 won, which is 104% higher than the high end of the IPO price range of 25,000 won. 
• We estimate Shinsung ST to generate sales of 133.9 billion won (up 25.7% YoY) and operating profit of 15.4 billion won (up 94.6% YoY) in 2023. 
• Our valuation sensitivity analysis suggests an IPO price range of 41,351 won to 61,771 won per share.

• Softbank Group (9984 JP) aims to raisebetween US$4.5-4.9bn via selling some of its stake in ARM Holdings‘ US IPO.
• ARM develops and licences high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.
• In our previous notes, we looked at the company’s past performance. In this note, we talk about valuation.

• Kinatico Ltd (ASX:KYP) is a ‘Know Your People” regtech company providing workforce compliance monitoring and management technology and services.
• KYP has reported FY23 NPAT of $0.237m, an increase of 116% on the previous corresponding period (pcp), the company’s best-ever result.
• On an adjusted basis (for non-cash items), NPAT was $0.75m, a turnaround of $1.5m on the prior period while the gross margin and EBITDA margin hit record levels of 65.7% and 11.2% respectively. 

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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