Daily Brief TMT/Internet: Gigabyte Technology, PC Partner, Super Micro Computer, Cambricon Technologies Lt, I-Scream Media, Onestream Inc, UL Solutions Inc, Lenovo, Intelsat Sa and more

• Gigabyte Technology (2376 TT) is looking to raise up to US$350m in its upcoming GDR offering. The firm is also looking to raise another US$300m via convertible bonds.
• In late Jun 2024, Gigabyte announced that it had received its shareholder’s approval to issue between 32-38m common shares via a GDR offering. 
• Similar to previous GDR listings, the deal is a long drawn out process with the firm required to jump through a number of board/shareholder/regulatory approval loops.

• Gigabyte Technology (2376 TT) is looking to raise up to US$307m in its global depository receipts (GDRs) offering. The firm is also looking to raise another US$300m via convertible bonds.
• Similar to previous GDR listings, the firm has undergone a long drawn out process prior to launching the deal, having to jump through a number of board/shareholder/regulatory approval loops.
• In this note, we run the deal through our ECM framework and comment on deal dynamics.

• Back on the 18th June, personal computer parts and accessories play PC Partner (1263 HK)  announced a SGX listing was under consideration; and a possible withdrawal of the HKEx listing.
• This development was discussed in PC Partner (1263 HK) Muses SGX Listing & HKEx Withdrawal.  PC Partner subsequently announced a privatisation would not accompany any proposed withdrawal (should it happens).
• My recent discussions with SFC confirms this is possible. And there was a recent precedent. But there may be caveats.

• SMCI has surged 214% YTD and will form part of NASDAQ-100 from 22/Jul topping $50 billion in valuation. Strategic partnerships with Nvidia & AMD boosted its AI server market presence. 
• Walgreens has declined 56% YTD with its market cap falling below $10 billion. Failing to maintain at least 0.1% of NASDAQ 100’s market value has led to its exclusion. 
• Historically, stocks added to indices outperformed briefly post-announcement. Although recent trend shows minimal outperformance, SMCI and WBA have shown strong trends due to idiosyncratic drivers.

• With 70% of the review period complete, 4 non-constituents are in inclusion zone and 5 constituents are in deletion zone.
• We estimate one-way turnover of 6.5% at the December rebalance leading to a one-way trade of CNY 8.8bn (US$1.2bn). Index arb balances could increase the impact on the stocks.
• The potential adds have outperformed the potential deletes. With multiple days ADV to trade on the changes and the recent short selling clampdown, there could be further outperformance.

• Our valuation analysis suggests a base case implied market cap of 567 billion won or implied price per share of 41,450 won.
• This suggests a 3% upside to the high end of the IPO price range. We would not subscribe to this IPO due to lack of upside.
• Our base case valuation is based on P/E of 18.8x using the company’s net profit of 30.2 billion won in 2023.

• OneStream, the financial software maker and enterprise-focused technology company, set terms for its IPO and plans to raise ~$441M at the midpoint of the range at $18.00 per share.  
• The company was backed by American global investment company KKR, D1 Capital Partners, Investment Group of Santa Barbara and Tiger Global Management.
• The offering is attractively valued vs. peers given 30%+ growth rates at scale and cash flow generation. OneStream shares are expected to list on the Nasdaq next week.

• UL Solutions offers independent testing, inspection, and certification services globally as a newly listed company
• They are the only US-listed player in the TIC industry, making them a valuable investment option for potential compound growth
• With a strong brand and historical roots dating back to 1894, investors see ULS as a potential premium multiple due to their market position, revenue growth, and earnings growth opportunities.

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.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Lenovo

• Intelsat’s secured bonds offer a potential short-term re-rating opportunity due to discussions of a merger with SES
• A merger with SES would benefit Intelsat’s equity owners by de-risking their investment and increasing liquidity for SES
• The Intelsat 6.5% 2030 secured bond could see a significant increase in value if a merger is announced, trading at a yield similar to SES’s <4.5%

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.