Daily Brief TMT/Internet: Kokusai Electric , Sea , Boku Inc and more

• Kokusai Electric (6525 JP) is a speciality manufacturer of semiconductor production equipment. KKR & (KKR US) seeks to raise about US$750 million through listing Kokusai.   
• Kokusai has the leading market share in the batch deposition equipment market and the second largest market share in the treatment equipment market, according to TechInsights and Gartner.
• The key elements of the bull case rest on a leading market share, strong IP, healthy forward revenue indicators, increasing recurring service revenue, solid gross margin trends and modest leverage.

• The news that the Indonesian Government will target social commerce in Indonesia, as well as placing additional scrutiny on imported products sold through digital channels will impact TikTok hard.
• TikTok Shop will not be allowed to operate in Indonesia in its present guise given the requirement to split social media and e-commerce, which will benefit peers Shopee and Tokopedia.
• Sea Ltd through Shopee will be the biggest beneficiary given it will require less promotional spending in Indonesia and it has also re-entered the Indian market with FreeFire. 

Boku reported H123 revenue growth of 26% y-o-y to $38.2m, with a growing and now material contribution from local payment methods (LPMs). Adjusted EBITDA was 28% higher and the margin expanded by 0.7pp, as upside from higher revenues was partially offset by further investment to support LPMs. We have revised up our forecasts to reflect faster growth in total payment volumes (TPV) partially offset by higher investment in Boku’s payments network.