Daily Brief TMT/Internet: Hua Hong Semiconductor, ARM Holdings, Taiwan Semiconductor (TSMC), Sakura internet, Wiwynn Corp, Redbubble Ltd, Globalwafers, Hewlett Packard Enterprise and more

For our next Corporate Webinar, we are glad to welcome Hua Hong Seminconductor’s Chief Financial Officer, Daniel Yu-Cheng Wang. 

In the upcoming webinar, Daniel will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Eric Wen. The Corporate Webinar will include a live Q&A session.

The Corporate Webinar will be hosted on Tuesday, 12 March 2024, 16:00 SGT.

About Hua Hong Semiconductor

Hua Hong Semiconductor Limited, an investment holding company, manufactures and sells semiconductor products. The company provides embedded non-volatile memory, standard logic and mixed-signal, radio frequency, power management integrated circuits, power discrete, and automotive solutions. It also offers foundry services; and design services comprising standard and customized IP development, full-custom layout design, and customer-specific integrated solutions, as well as design support and tape out services. In addition, the company provides multi-project wafer services; mask making services; and backend services, such as in-house testing, backside processing and dicing, and backend turnkey services, as well as assembly and testing services. 

Further, it engages in real estate development. Its products are used in consumer electronics, communications, computing, industrial, and automotive markets in the People’s Republic of China, North America, Europe, Japan, and other Asian countries. The company was founded in 1997 and is headquartered in Shanghai, the People’s Republic of China. Hua Hong Semiconductor Limited is a subsidiary of Shanghai Alliance Investment Ltd.

• Softbank Group (9984 JP)’s 180-day lock-up period on its 89.75% ARM Holdings (ARM US) shareholding expires on 12 March. SoftBank’s stake is worth US$124 billion.
• SoftBank will likely monetise its ARM stake using the Alibaba (ADR) (BABA US) playbook. This playbook uses prepaid forward contracts to raise capital with eventual settlement through shares. 
• ARM is currently trading 2.6x its IPO price on AI-driven hype. ARM trades at a premium multiple to NVIDIA Corp (NVDA US), despite forecasted lower growth and margin.  

• We first wrote about the iShares Emerging Markets ex-China (EMXC US) ETF 3 years ago when AUM was less than US$500m. AUM now stands at US$11bn.
• IShares Emerging Markets ex-China (EMXC US) has outperformed iShares Emerging Markets (EEM US) and iShares Emerging Markets Asia (EEMA US) with lower volatility and a lower drawdown.
• With the Chinese economy misfiring and markets under pressure, we could see a further shift in positioning away from China and that means inflows to other Emerging Markets.

• Sakura Internet, a Japanese cloud provider, has seen a significant surge in stock price and market capitalization due to entry into AI cloud services.
• The company plans to invest in NVIDIA H100 GPUs for AI servers, expecting substantial demand but with uncertain revenue and profitability projections.
• Risks include concentrated ownership, lack of analyst coverage, potential shareholder pressure, and competition from larger cloud providers like AWS with advanced AI computing capabilities.

• Wiwynn Corp (6669 TT) is looking to raise up to US1.3bn in its upcoming global depository receipts (GDRs) offering.
• Wiwynn recently reported its board’s resolution to issue up to 17m new shares in the form of GDRs for purchasing overseas raw materials, debt repayment, investing overseas and others.
• 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.

• Redbubble was a bubble. On the wings of pandemic mania, the stock price increased 13 times from March 2020 to January 2021.
• Reaching a 1.9B market cap. Today, the situation looks quite different.
• The stock is down 93% from its highs of 7 AUD and currently sits at 0.

• The sales in January 2024 were the lowest during the period of 2022-2024, indicating a likely downtrend for the first quarter of 2024.
• Demand is expected to be flat or slightly increase in 2Q24F for GlobalWafers, which is encouraging.
• The market for 12″ raw wafers is expected to have a more stable demand-supply balance, while raw wafers of 8” and smaller sizes could experience reduced demand in 1H24F.

Key points

• HPE is a $21.5 billion provider of networking, servers, and storage products, with a focus on higher quality businesses and services
• The company generates cash from operations and divestitures, presenting an attractive investment opportunity with potential for upside to $29/share or a 35% IRR through 10/2025
• HPE’s recent Security Analysts Meeting emphasized its business segments, particularly highlighting opportunities in the Compute segment for AI inferencing needs and Proliant Gen 11 servers

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.