Daily Brief TMT/Internet: Glosel , Hollysys Automation Technologies, Lam Research, Prosus NV, Intel Corp, Mitek Systems, Centralnic and more

• Two months ago, Macnica Holdings Inc (3132 JP) launched a tender on semiconductor trading house Glosel (9995 JP). OK, but… it was too cheap at 0.71x book. Why?  
• Glosel is special because it has three main assets. 1) 61% of net assets are inventory (<3mos), 2) 34% of net assets are net receivables (<3mos), 3) 8+% is securities.
• It took two months to get approvals in place and two months of trading well through terms, and so now the terms have been bumped 16%. Thank Murakami-san.

• On the 26th January, proxy advisor Glass Lewis issued a report recommending Hollysys (HOLI US) shareholders vote against Ascendent’s merger. Two days later, ISS issued a similar opinion.  
• Both reports targeted HOLI’s efforts to maximize an Offer price. Elsewhere, some salient points were raised. But overall, there exists an air of naivety in their conclusions.
• HOLI’s EGM is scheduled for February 8th. The merger consideration of US$26.50/share is in line with, or above, the estimated values of Deutsche Bank’s fairness opinion.

• LRCX reported Q423 revenues of $3.76 billion, marginally ahead of the guided midpoint, up 8% QoQ but down 29% YoY
• Looking ahead, LRCX forecasted Q124 revenues of $3.7 billion, essentially flat sequentially.
• The memory recovery is happening, but only for HBM and node transitions. No spending on memory capacity additions means limited upside for LRCX. 

• Glosel (9995 JP) has recommended Macnica Holdings Inc (3132 JP)’s revised tender offer of JPY750 per share, a 16.3% premium to the previous JPY645 offer. 
• Murakami’s clever manoeuvring to build a 12.67% stake and propose a JPY750 competing offer has forced Macnica to bump its offer. 
• The minimum acceptance condition requires a 66.7% minority acceptance rate. This acceptance rate is achievable because the offer is attractive and Murakami is supportive. 

• On the 17th of January, we published an insight flagging an opportunity to put on a pairs trade long Naspers, short Prosus.
• Since the start of the year, Naspers’ underperformance relative to Prosus was, in our view, overdone.
• Naspers has outperformed Prosus by 3.98% over the last 8 trading days. We suggest closing out at current levels.

• Intel reported earnings last week. Intel was one of my favorite stocks last year, and I wrote about it here in “Is This the Intel Inflection”, where I successfully called the bottom in the stock.
• It’s worked pretty well, even against the SOXX index since then.
• I’ll summarize my thesis back then, update you now on what I think about Intel, and write about results and read-throughs.

Key points (machine generated)

• Mitek specializes in mobile image capture and digital identity verification solutions, with approximately 60% of its business in mobile image capture and 40% in digital identity verification.
• The company has experienced strong revenue growth, with a compound annual growth rate of 18% to 22% over the past one, three, and five years, reaching approximately $170 million as of September 2023.
• Mitek has focused on using profits from its mature mobile image capture business to build its identity verification segment, but the mobile deposit business has also grown at a similar rate, limiting portfolio rebalancing in recent years.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Team Internet’s FY23 trading update confirmed that trading has remained robust with double-digit sales growth across Online Marketing and Online Presence. The total revenue and EBITDA margin were slightly ahead of market consensus and our forecasts, both of which were upgraded in November 2023. Estimated FY23 net debt of US$74m was lower than our US$80.9m forecast, with operating cash conversion reverting to close to 100%. We maintain our FY24 estimates, but these could prove conservative, especially if advertising spend recovers. At 4.8x FY24e EV/EBITDA and 6.4x FY24e P/E, Team Internet’s rating looks low given the company’s growth profile, diversity and growing track record.