In today’s briefing:
- Gigavis IPO Bookbuilding Results Analysis
- SUMCO Q1’23 Revenues of ¥109.9 Billion, -6.4% QoQ but up 10% YoY. Q2’23 Flat QoQ
- Softbank (9984 JP): Private Company Valuations Still in Question
- XL Axiata (EXCL IJ) – Convergence Blast-Off
- IMMR: Optionality to Cash
- ARLO: Recurring Revenue Growth, PT to $11
- Flash Coffee Closes $50m Funding, Targets Profitability by 2024
- PayPal: Panicking As A Result Of Quarterly Trends And Narratives Is Not A Viable Strategy
- ServiceNow Inc.: The Next King of Digital Transformation? – Key Drivers
- Alphabet Inc.: A Major Challenge From Bing AI – Key Drivers
Gigavis IPO Bookbuilding Results Analysis
- On 12 May, GigaVis announced its IPO price of 43,000 won, which is 8% higher than the high end of the IPO price range of 39,700 won.
- Our base case valuation of Gigavis is target price of 61,755 won per share, which is 44% higher than the IPO price of 43,000 won.
- Gigavis makes automatic optical inspection equipment (AOI) and automatic optical repair equipment (AOR) for the inspection and repair process of inner layer substrates, which are core components of semiconductor substrates.
SUMCO Q1’23 Revenues of ¥109.9 Billion, -6.4% QoQ but up 10% YoY. Q2’23 Flat QoQ
- Q1’23 revenues of ¥109.9 billion, better than forecasted, down 6.4% QoQ but up 10% YoY.
- Q2’23 forecasted flat sequentially, no full year 2023 forecast provided
- There’s a major headwind looming on the horizon for the broader silicon wafer segment…
Softbank (9984 JP): Private Company Valuations Still in Question
- 4QFY22 saw the best result for the Vision Funds since 3QFY21; SVF private companies saw minimal valuation write-downs last quarter, and we suspect valuations may still be too optimistically marked
- Masa’s debts to SoftBank stand at USD5.2bn in 4QFY22; in addition, the group’s credit risk exposure to troubled company WeWork was over USD1.1bn at fiscal year end and going higher
- Softbank shares trade at a 46% discount to the stated NAV; with the Alibaba valuation “cushion” largely consumed, the potential Arm IPO is critical but private company valuations remain questionable
XL Axiata (EXCL IJ) – Convergence Blast-Off
- XL Axiata reported a robust set of 1Q2023 results as the competitive environment remains rational allowing it to raise prices, whilst its convergence strategy is starting to gain traction.
- XL’s convergence penetration grew in 1Q2023 but the key announcement was that Link Net will become a pure fibre player whilst the retail element of fixed broadband will fall under XL.
- XL Axiata (EXCL IJ) has seen the MAUs for its digital platform reach 26m with increased user transactions and higher spending. Valuations remain attractive on 4.1x FY2023E EV/EBITDA.
IMMR: Optionality to Cash
- IMMR reported first quarter results reflecting the slowdown in smartphone shipments and the benefits of the Company’s investing activity
- Of the $150.3 million invested, at the end of March 2023, equity securities were $56.5 million of the portfolio compared to $53.3 million in December 2022
- IMMR’s legal pursuit of patent infringing parties could become an option on the current valuation of the stock
ARLO: Recurring Revenue Growth, PT to $11
- ARLO reported a non-GAAP profit in the first quarter of 2023 after the Company implemented a price increase on its subscription plan
- ARLO added 182 thousand paid subscribers in the quarter and ended the first quarter with more than 2 million paying subscribers
- Service revenue has allowed for greater operating leverage with gross margin expected to rise further in future quarter with the growth in service revenue
Flash Coffee Closes $50m Funding, Targets Profitability by 2024
- Rocket Internet-backed Flash Coffee has officially closed its series B round totaling US$50 million.
- In a statement, the company said it would expand deeper into Indonesia, with plans to open a branch in Surabaya in July. It already has a presence in Jakarta and Bandung.
- Besides Indonesia, Flash Coffee also operates in Singapore, Hong Kong, South Korea, Thailand, and Taiwan.
PayPal: Panicking As A Result Of Quarterly Trends And Narratives Is Not A Viable Strategy
- PayPal has significant competitive advantages, and the management is making the right moves to improve them.
- PayPal continues to slide to multi-year lows, with a mixed quarter that was perceived as a very negative one.
- PayPal has been in a strong position in the market for the past three years.
ServiceNow Inc.: The Next King of Digital Transformation? – Key Drivers
- ServiceNow delivered an outstanding first quarter for 2023 which was an all-around beat.
- The subscription revenue showed a 27% growth in constant currency, surpassing the high end of guidance by 150 basis points.
- The latest release of ServiceNow, Utah, offers a range of new features and capabilities to increase automation, simplify user experiences, and provide greater organizational flexibility.
Alphabet Inc.: A Major Challenge From Bing AI – Key Drivers
- Alphabet reported an all-around beat in Q1 2023, with a steady increase in Google Services and Other revenues.
- There were indications of stabilization and performance in YouTube Ads, while advertiser spending pulled back slightly in the network.
- Alphabet identified Google AI, retail, and YouTube as the three critical areas for long-term growth in advertising.
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