Daily Brief TMT/Internet: BYD Electronics, Samsung Electronics, Cigniti Technologies, Silergy Corp, Vitec Software Group , Fortinet Inc, Motorola Solutions, PTC Inc, Cdw Corp/De, HCL Technologies and more

• Post market close tomorrow, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 7 June.
• There were no constituent changes to the index in March. We highlight ten profitable and eligible stocks that could be added to the index in June.
• Changes to the Hang Seng Industry Classification System (HSICS) could lead to inclusions for the Information Technology industry while there could also be inclusions for the underweighted Healthcare industry.

• US tariff hike on Chinese electric vehicles, solar cells, and semiconductors could raise costs for clean energy industry in China, affecting competitiveness and growth.
• AT&S to sell medtech PCB factory in South Korea, indicating potential changes in the global supply chain.
• AI rush leading to staffing shortages at companies like Amazon and Google, while India sees surge in AI spending by 2027.

• The Cigniti-Coforge acquisition presents a unique investment opportunity in the IT services sector, with potential for significant returns.
• Coforge plans to acquire a 54% stake in Cigniti Technologies, expanding its presence in digital assurance and AI services.
• The deal is expected to be completed by Q2 of FY25, with an open offer price potentially higher than the current market value of Cigniti shares.

• Inventory levels were at 90 days by the end of 1Q24, returning to a normal level.   
• It is expected to see consecutive QoQ growth throughout 2024, with normal orders observed since 2Q24. 
• Although Chinese mature technology is advancing, current analog capacity still falls short of local demand in China.

• Vitec Software Group AB is the largest Nordic-based vertical market software company with exceptional growth and outperformance compared to peers
• Despite being lesser-known, Vitec has significant potential for growth and is expected to become more well-known internationally, attracting more institutional investors
• Under CEO Olle Backman’s leadership, the company is expected to continue its high organic growth trajectory, offering a promising investment opportunity with a base case target price of ~870 SEK and a potential return of ~55% over the next two years.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Fortinet, the multinational cybersecurity company, has showcased notable financial results for the first quarter of 2024.
• They declared an operating margin increase of a first quarter record of 28.5%, and a record cash flow from operations of $830 million.
• Their adjusted free cash flow margin was also their highest yet at 61%.

• Motorola Solutions, Inc. showcased robust financial performance in the first quarter of 2024, marked by a 10% revenue growth and a significant 27% increase in its earnings per share.
• This strong performance was complemented by an expanded operating margin by 220 basis points and a record first quarter operating cash flow of $382 million.
• The growth was propelled by various segments.

• PTC experienced robust results in this quarter, continuing the positive trend evident in their product portfolio’s resonance with customers.
• Despite changing their mid-term targets, the company has an unequivocal commitment to delivering on its cash flow guidance.
• This will be achieved by updating their mid-term ARR growth objectives, with constant currency ARR growth targeted to be in the low double digits over the mid-term.

• CDW Corporation has reported its Q1 2024 earnings.
• Despite a challenging market environment, gross profit came in at $1.1 billion, while non-GAAP operating income stood at $404 million.
• Gross margin for the period was a Q1 record, demonstrating the resilience of CDW’s underlying profitability and strategic integrity.

• Following HCL Technologies (HCLT IN)‘s fiscal 4Q2024 earning report last month, we have witnessed an acceleration in near-term earnings estimates downgrades.
• Based on near-term momentum indicators, it seems that we are only at the beginning stage of a prolonged period of underperformance.
• HCL Technologies currently trades roughly one standard deviation above its rolling 5-year historic average PE ratio.