Daily Brief TMT/Internet: Mimasu Semiconductor Industry, SK Hynix, ASE Technology Holding , Meta Platforms (Facebook), Darktrace, Intel Corp, NextNav , Freelancer Ltd and more

• Shin Etsu Chemical (4063 JP), owner of a 44% stake in Mimasu Semiconductor Industry (8155 JP), has announced a Tender Offer to take out minorities in Mimasu. 
• This is not surprising. They bought in 19 years ago, raised to 40+% 18yrs ago, then waited. Finally, we have a deal. But it’s too cheap. 
• Shin-Etsu starts with ~45%, and crossholders and the chairman get it to 52%. Then they need a bit to get them to 67% but it should be straightforward.

• SK hynix earnings were announced, with a 10% Q/Q revenue increase driving a 734% increase in operating profit
• Although the company cited AI demand as the basis for this, its DRAM revenues, which are very AI dependent, increase very little
• NAND SSD demand increased significantly, with a 30% increase in revenues, largely attributable to price increases

• Almost every sectors are recovery since 1Q24, and auto and industrial applications sectors still need more time to digest inventory. .    
• The capex for 2024F has been increased by 10% for further investments in the testing business, targeting turnkey or testing customers. 
• All product lines expected to grow in 2H24F, with APT outperforming corporate average. UTR growth expected in 2H24F, reaching above 70%. 

• If you have been following Meta for some time, you probably are accustomed with after-hours (AH) volatility by now.
• While Meta was -20% at one point AH today, it does seem a bit overdone.
• Of all the post-earnings drop that I have experienced following Meta since 2018, this one probably made me nervous the least.

• The SE600 index is one of the most widely followed benchmark indices in Europe. This index is rebalanced on a quarterly basis.
• In this insight, we take a look at the potential index changes that could take place between now and the end of the June 2024 index rebal event.
• Currently, I see 7 ADDs and 7 DELs for the SE600 index. There are more names just outside the border requiring small price changes to get involved in index changes. 

• Intel misses 1H24 market consensus again, post market correction of over 7%. Can shifting focus away from foundry/manufacturing help?
• Is the breakdown change for future spin off/IPO of foundry/manufacturing, and non focus businesses like Altera and Mobileye positive?
• We disagree Intel foundry to breakeven in two years; we see AI product lagging behind competitors and non AI server CPU being squeezed by AI server GPU and GPU/CPU integration.

• Nextnav is a flying car company with valuable low band spectrum covering 93% of the US population
• The spectrum could be worth $18 per share within a year
• Investment in Nextnav is likely to be successful due to the valuable spectrum and experienced team

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.

Freelancer’s Q124 results were mixed. Operationally, the company is seeing rising demand for AI specialists as customers seek affordable ways to develop proprietary AI. Notably, in Enterprise, the company delivered a large-scale AI pilot for a tech giant, sourcing 20,000 freelancers in 24 hours across 52 languages. This impressive achievement could lead to a substantial multi-year contract. Major initiatives across Loadshift and Escrow with leading organisations are set to be deployed over the coming months, potentially catalysing performance and diversifying revenue streams. We revise our forecasts to account for a weaker Q1 than anticipated, though positive lead indicators, especially relating to AI, underscore long-term optimism.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• SK Hynix
• Vedanta Resources