Daily Brief TMT/Internet: Chindata Group, Alphabet Inc Cl C, Douzone Bizon, Bilibili Inc, Taiwan Semiconductor (TSMC) – ADR and more

• Chindata Group (CD US) disclosed a preliminary non-binding proposal from Bain Capital at US$8.00 per ADS, a 27.4% premium to the undisturbed price of US$6.28 per ADS.
• For privatisation to succeed, shareholders representing two-thirds of the shares present and voting need to approve the deal. The offeror represents 87.39% of the total voting power. 
• While the offer is unattractive, Bain Capital’s voting rights ensure that the vote will pass. The key risks are regulatory approvals and timing. 

• In this insight, we provided the most recent ranking of the top 100 most popular YouTube channels in Korea (according to Socialblade website).
• The top 100 YouTube channels in Korea have received 390.7 billion in total views as of June 2023. Of these total views, K-Pop channels views accounted for 46.4% share.
• YouTube has been meaningfully taking away market share from Kakao and Naver in the past three years. KakaoTalk’s MAU was 41.5 million in May 2023. YouTube was a close second.

• The review period for the September rebalance ends on 31 July, the changes will be announced towards end August and implemented at the close of trading on 7 September.
• There is one change currently for each of the Secondary Battery, Bio, Internet and Game indices. Large stock price moves mean no changes for the BBIG Index currently.
• Douzone Bizon (012510 KS) has flipped from a passive sell to a passive buy over the last month and the stock could move higher from here.

• Further evidence of BILI’s user base peaking reinforces our bearish view on its growth outlook.
• BILI’s business model is broken and we believe significant downsizing is unavoidable in the next 12- 18 months to achieve profitability.
• The company will survive as a leaner and slightly profitable business valued at high single-digit P/E. We still see tremendous downside from here and advise investors to avoid the stock.

• Chinese data centre outfit Chindata (CD US) has no end of alleged suitors, rumoured to include SOE-backed China Merchants, GDS (GDS US), PE outfit PAG, and EQT (EQT SS)-backed EdgeConneX.
• Now Bain Capital, Chindata’s largest shareholder with 42.17% (and 87.39% of the voting power) has made a non-binding proposal of $8/share per ADS, a 33% premium to last close.
• Chindata’s board has made no decision on the proposal. It’s hardly a knockout Offer. But the key question is whether Bain will get regular approval to take Chindata private. 

In the next installment of our Webinar Wednesdays, we go live with Smartkarma Insight Provider, Vincent Fernando, CFA. Vincent will be sharing with us his top picks in the Taiwanese Tech space. From trends in the industry, its opportunities, and insights into his top picks, join us as we hear more from Vincent.

The webinar will be hosted on Wednesday, 21 June 2023, 17:00 SGT/HKT.

Vincent Fernando, CFA has 20 years of experience researching capital markets in Asia and the USA. He is currently the Managing Director and founder of Zero One Partners. He has more than 15 years of investment research & capital raising experience working at both boutique firms and larger investment banks such as Citi and Macquarie. He has traveled extensively during his career, having been based in New York, Hong Kong, Thailand, and finally Singapore where he was Director of Equity Research covering Southeast Asia where he originated and marketed multiple investment banking deals.