In today’s briefing:
- Chindata: Bain’s Move Spurs China Merchants Into Action
- Ant Group Proposes Share Buyback at Roughly 30% of IPO Valuation
- POSCO DX Could Switch Its Listing from KOSDAQ to KOSPI by End of 2023
- Rorze (6323) | Q1 Miss, Buying Opp
- Fadu Pre-IPO – Peer Comparison – Hardly Comparable in Scale to Its Peers
- NTGR: Easing Inventory Concern
- [Tencent (700 HK, BUY, TP HK$450) TP Change]: “DNF Mobile” And Strong Ads Are Two Catalysts
- SS&C Technologies Holdings: New Products
- SunPower Corporation: A Story Of Market Expansion and Digital Enhancements! – Key Drivers
Chindata: Bain’s Move Spurs China Merchants Into Action
- My read of Bain’s Offer last month, was a tactic to flesh out a competing Offer. It seemed unlikely Bain would get the regulatory approval to take Chindata (CD US) private.
- Now state-backed China Merchants Capital Holdings International Ltd. has made a non-binding offer of $9.20/ADS, compared to $8/ADS from Bain.
- This Offer is indicative. But an SOE taking over data centres makes a lot of sense.
Ant Group Proposes Share Buyback at Roughly 30% of IPO Valuation
- Ant Group Co. Ltd. has offered to buy back some shares at a whopping 70% discount to the unrealized valuation for its ill-fated IPO, shortly after regulators hit the fintech giant with an almost $1 billion fine.
- Ant Group announced Saturday that it had proposed to repurchase as much as 7.6% at a price that values the company at approximately 567 billion yuan ($78 billion).
- The offer represents a roughly 40% discount to the approximate 960 billion yuan figure achieved in Ant Group’s last fundraising round in 2018, and is around 70% cheaper than the 2.1 trillion yuan valuation touted in its planned 2020 IPO.
POSCO DX Could Switch Its Listing from KOSDAQ to KOSPI by End of 2023
- On 10 July, it was reported in the Hankyung Business Daily that Posco DX (022100 KS) could switch its listing from KOSDAQ to KOSPI by the end of 2023.
- One of the key reasons for the change in the listing venue from KOSDAQ to KOSPI is that POSCO Group believes this could lead to improved valuations for the company.
- We believe the valuations of Posco DX have become too high. Therefore, we have a Negative View of Posco DX at current prices.
Rorze (6323) | Q1 Miss, Buying Opp
- Rorze’s stock price has risen 35% since we became bullish on the stock in August
- Q1 sales and operating profits big miss versus analyst consensus due to slowing semicon capex cycle
- We would be buying into any stock weakness with an eye on recovery in 2H23 into 2024
Fadu Pre-IPO – Peer Comparison – Hardly Comparable in Scale to Its Peers
- Fadu (440110 KS) is looking to raise up to US$147m in its Korean IPO.
- Fadu is a South Korean fabless semiconductor maker mainly engaged in flash storage technology innovation. Its core products are Enterprise Solid State Drive (SSD) and Enterprise SSDs.
- In our previous notes, we looked at the company’s past performance. In this note, we talk about peer comparison.
NTGR: Easing Inventory Concern
- NTGR has spent the last two years adjusting to a consumer spending environment post pandemic and should begin to show greater benefits of the new business strategy
- The inventory rebalancing at NTGR’s main retailers is mostly sorted out and NTGR has been putting greater emphasis on its super premium wireless systems
- NTGR’s ability to generate free cash flow this year should improve investor sentiment in owning the stock.
[Tencent (700 HK, BUY, TP HK$450) TP Change]: “DNF Mobile” And Strong Ads Are Two Catalysts
- We expect that Tencent’s 2Q23’s rev./non-IFRS net income to be 0.2%/5.2% vs cons.
- We raise Tencent’s ads growth in 2Q23 from 18.2% to 28.4% YoY per our recent checks with ads agencies.
- There is an increasing possibility that “DNF Mobile” could be launched in the next several quarters. We raise the TP to $450, which implies 20.1X PE in 2023.
SS&C Technologies Holdings: New Products
- SS&C Technologies delivered a mixed set of results for the previous quarter with revenues above analyst expectations but below-par earnings.
- With a focus on innovation and investment in key areas, SS&C Technologies saw growth in various segments, including alternatives, global investor and distribution services, retirement, and the Institutional and Investment Manager segment.
- SS&C Technologies’ strong financial performance and customer satisfaction are anticipated to position the company as a trusted partner in the financial services sector.
SunPower Corporation: A Story Of Market Expansion and Digital Enhancements! – Key Drivers
- SunPower delivered a mixed set of results for the previous quarter with revenues above the analyst consensus estimates.
- Despite challenges like unfavorable weather conditions in California and increased costs, its management remains confident in achieving its financial goals.
- SunPower added many new customers, with revenue experiencing notable growth driven by price increases.
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