Daily Brief TMT/Internet: Bukalapak, Pando, Hyve Group , Hua Hong Semiconductor, Advance Intelligence Group, Vection Technologies Ltd and more

• Bukalapak (BUKA IJ) announced 1Q2023 results with encouragingly strong headline growth coupled with even stronger revenues as take rates increased, with its marketplace being the standout driven by specialty verticals. 
• Mitra Bukalapak also registered solid growth, with increasing active Mitra’s with greater frequency, higher take rates, and an improvement in contribution margin which should turn positive over the next 2Qs. 
• Take rates should continue to improve as the specialty businesses pick up momentum, and once the Mitra business turns CM positive, growth in that segment will also accelerate.

• Reliance on ecommerce has intensified within the past few years, but the pandemic, geopolitical tensions and government restrictions have disrupted the global supply chain.

• Over the course of a decade, companies are expected to see losses equal to nearly half of what they make in a year.

• US- and India-based Pando is looking to solve this issue and has raised funding to help it do so.

• Another British company taken over by private equity. On 25 April, Providence sweetened its offer to 121p/share, a 12% increase (22.1x trailing EBITDA; 13.1 EV/Fwd NTM EBITDA).
• On 3 May, all of the resolutions were passed at both Court Meeting and General Meeting. The Scheme Court Hearing is scheduled for 18 May. Settlement should happen on/before 2 June.
• Although there isn’t enough liquidity for large tickets, at 120.4p the spread is 0.5%/6.6% (gross/annualised).

• We expect Hua Hong to report C1Q23 top-line, IFRS operating income, and IFRS net income in-line, 14.1% and 19.1% vs. consensus, respectively. 
• Our sample of 1Q23 A-share fabless balance sheets showed that inventory days rose, which we expect will lead to a slowdown in wafer orders beginning in 2Q23.
• Despite near-term weakness, we are positive the longer-term benefits of (1) localization, and (2) EV demand. We maintain BUY and raise TP to HKD35.

• Singapore-based AI company Advance Intelligence Group today announced it has raised US$80 million from an investor consortium
• The fundraising follows its previous Series D funding round of over US$400 million in 2021.
• In total, the company has raised over US$700 million and has secured capital in excess of US$1 billion supporting its credit book.

Vection Technologies’ Q323 activities report confirms that contract growth continued to accelerate in H223, with the company reporting 100% total contract value (TCV) growth from the end of January to 28 April. The momentum in TCV growth indicates that management is well-positioned to deliver the triple-digit half-on-half top-line growth required to reach its FY23 expectations. Cash receipts on a quarterly and nine-month basis increased year-on-year. Vection Technologies’ balance sheet is set to be sustained by a further A$3.5m in Q423 from an R&D tax receipt and outstanding invoices, supporting the company’s M&A pipeline.