Daily Brief TMT/Internet: Black Sesame Technologies, Robosense Technology, Amazon.com Inc and more

In today’s briefing:

Black Sesame Pre-IPO: Earnings Show Strong Potential
RoboSense Technology: A Risky IPO As LiDAR Stocks Underperformed
Amazon: Monetary Conditions Are In The Driver’s Seat And Higher Margins Are Already Priced-In

Black Sesame Pre-IPO: Earnings Show Strong Potential

Chinese autonomous driving chip maker (SoCs) Black Sesame Technologies (BLACKSES HK) has filed for HKEx IPO and plans to raise around US$200m which will be spent on R&D and commercialisation.
According to Frost & Sullivan, Black Sesame was ranked the third largest provider of automotive- grade high computing power SoCs, based on shipment in 2022.
The company is in early stages of commercialisation, and the top line has expanded significantly in 2022 with launch of SoCs in 2021. Black Sesame’s earnings show significant growth potential.

RoboSense Technology, one of the leading providers of LiDAR sensor systems and AI perception software, filed for a Hong Kong IPO with J.P. Morgan and China Renaissance leading the offering.
RoboSense Technology is a high-growth mass producer of LiDAR products with mounting operating losses. The company is growing revenue in double digits and still has heavy losses.
I believe RoboSense Technology IPO is risky due to the company’s high cash burn rate, fierce competition, pricing pressure and unhealthy fundamentals. Moreover, LiDAR stocks continue to underperform.

Amazon has significantly underperformed the broader equity market, in spite of the recent rally.
The narrative for generative AI is strong, but the share price is currently driven by other factors.
Margin improvements are being priced-in, which significantly limits any potential upside, without monetary conditions becoming supportive.

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