Daily Brief TMT/Internet: Krafton , Roland DG Corp, Tencent, HYBE , Taiwan Semiconductor (TSMC) – ADR, Xiaomi Corp, Policybazaar, Iridium Communications, Ebay Inc and more

• SK Square is looking to raise around US$198m via selling 2.1% of Krafton (259960 KS).
• The stock has been doing well over the past few months and its earnings and price momentum remain strong.
• In this note, we will run the deal through our ECM framework and talk about the recent updates.

• On 19 April, Taiyo Co-CEO Brian Heywood told Bloomberg and Reuters they were considering three options to Brother Industries (6448 JP)’s tender for Roland DG Corp (6789 JP). 
• Taiyo’s options are bumping its offer, walking away or tendering into the Brother’s offer if it bumps and alleviates dis-synergies concerns.
• All three options are likely a ruse. Taiyo’s primary play is to frustrate and pressure Brother to withdraw its bid if it cannot get the Board’s recommendation.

• After the market close on 22 April, it was reported that SK Square plans to sell 2.2% stake in Krafton in a block deal sale worth about 270 billion won. 
• The estimated block deal sales price range is from 243,000 won to 251,000 won, representing a 3.1% to 6.2% discount to the closing price of 259,000 won on 22 April.
• We would take the deal. The company’s valuations remain attractive and it has been successful in expanding its sales and profits. 

• A shares were up on the week, while Hs were down. BIG divergence among liquid names. 
• Net SOUTHBOUND buying was +HK32.1bn. SOUTHBOUND ended its consecutive post-CNY daily net buy streak on 25 March, then started a new one. No net sell days since.
• Little market news. More geopolitical news. SOE bank H-shares are seeing relentless net and gross buying, very very little selling.

• A nasty power struggle between ADOR CEO Min Hee-Jin and HYBE has erupted which is likely to continue to negatively impact HYBE’s share price in the next several months.
• ADOR CEO Min Hee-Jin owns an 18% stake in ADOR which was founded in 2021. HYBE owns the controlling 80% stake in ADOR.
• Given the nasty fight between ADOR and HYBE, it is likely that the two companies (including ADOR’s CEO Min Hee-Jin) are likely to part their ways.

• Taiwan Tech Shares Fell Sharply Along With Global Selling — Semiconductor and AI Names Most Exposed
• What Is TSMC Telling Us About Semi Supply Chain Stories at Its Investor Conference? 
• ASE Technology Holding (3711 TT) Wins iPhone 16 System-in-Package Order from Apple (AAPL US)

• In 1Q24, Xiaomi and Transsion shipments grew rapidly, while Samsung Electronics (005930 KS) and Apple (AAPL US) shrank.
• Tims China’s revenue expanded with new openings, which is encouraging in the competitive market.
• In China, Tesla fired salespeople who had served the company for less than six months.

• Mr. Yashish Dahiya is an impatient man. In one of the interviews with The Ken, he narrated a story of how while in college he used to run home to Noida every Friday and back to college on a Monday morning (both 30kms in one direction) as he found public buses too slow for his liking.
• Mr. Dahiya, is also persistent and doesn’t give up easy – he is one of the few people in the world who has completed the grueling Ironman triathlon – an intense race that consists of swimming, bicycle ride and a marathon all raced in that order – widely considered one of the most difficult one-day sporting events in the world.
• It’s these qualities of impatience, persistence and continuously improving oneself that can be found in the business of PolicyBazaar or PBFinTech, the name of the parent company applying for IPO.

• IRDM reported first quarter results with equipment revenue providing the necessary lift to total revenue for IRDM to beat consensus estimates
• IOT subscribers continued to rise in the quarter with IRDM disclosing it has entered into a two-year agreement with a major IOT partner that provides revenue clarity for both parties.
• IRDM reported first quarter revenue of $203.9 million compared to our estimate of $197.7 million. The reason for the outperformance was due to equipment revenue

• eBay has the potential to become a trillion-dollar AI powerhouse in e-commerce
• Offers anti-inflationary savings and eliminates fraud risks
• Seen as undervalued with high growth potential compared to Amazon

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.