In today’s briefing:
- Naver: Under Pressure from the Japanese Government To Sell Its Stake in LINE
- Taiwan Dual-Listings: TSMC Spread Slumps Then Fully Rebounds; Shorts Spiking Ahead of IMOS Results
- KLAC. Priced For Perfection In 2025 & Beyond
- ICTK IPO Book Building Results Analysis
- Local Institutional Flows Towards Overweighting Samsung SDS in Samsung Group Context
- Games Global IPO: Strong Profitability and Impressive Portfolios of IGaming Content
- Bentley Systems: The Infrastructure Software Giant Poised for a Major Buyout? What Value Can It Extract? – Major Drivers
- SPS Commerce Inc.: Network Effects in Business Model & 3 Pivotal Growth Drivers
- AppFolio Inc.: Is Its Revenue Growth Sustainable? – Major Drivers
- Lattice Semiconductor Corporation: Increasing Server Share
Naver: Under Pressure from the Japanese Government To Sell Its Stake in LINE
- On 8 May, it was mentioned in numerous local media that Naver is under pressure from the Japanese government to sell its stake in LINE.
- One of the reasons behind Japanese government’s efforts to force Naver to sell its stake in LINE is due a major data breach incident in November 2023.
- Based on our current understanding of this situation, the most likely scenario is for Naver to sell about 20-30% stake in A Holdings (the controlling shareholder of LINE) to SoftBank.
Taiwan Dual-Listings: TSMC Spread Slumps Then Fully Rebounds; Shorts Spiking Ahead of IMOS Results
- TSMC: Premium Fell and Then Rebounded, Now +15.6%; Can Consider Shorting Again
- ASE: Falls to +12.3%; Wait for Higher Level Before Considering a New Short Again
- ChipMOS: -0.6% Discount; Massing of Short Interest Right Ahead of Earnings
KLAC. Priced For Perfection In 2025 & Beyond
- Q124 revenues of 2.36 billion, $60 million above the guided midpoint, down 5% QoQ and down 3% YoY.
- Current quarter revenue guidance of $2.5 billion representing a ~6% QoQ increase and about the same YoY.
- Share price close to record highs yet CY2024 outlook is tepid while the massive over reliance on China just keeps on going
ICTK IPO Book Building Results Analysis
- ICTK reported excellent book building results. ICTK’s IPO price has been determined at 20,000 won, which is 25% higher than the high end of the IPO price range.
- ICTK is a security company specializing in Internet of Things (IoT) based on physical copy prevention technology called PUF which is a cutting-edge technology during the chip manufacturing process.
- Our base case valuation is implied market cap of 376.8 billion won or target price of 28,694 won, which is 43% higher than the IPO price (20,000 won).
Local Institutional Flows Towards Overweighting Samsung SDS in Samsung Group Context
- Local institutions, notably pension funds, are increasingly investing in Samsung SDS, coinciding with the company’s more active investor engagement. This has sparked speculation about Samsung’s strategic motives.
- Timing-Wise, as AI infra demands rise in Samsung Group, conditions for boosting SDS’s performance improve. They monitor Samsung’s moves to drive SDS’s stock upward, considering its reliance on Samsung’s revenue.
- Local pension funds actively adopting overweight positions in Samsung SDS underscore the importance of crafting strategies tailored to overweighting SDS within the broader Samsung Group context.
Games Global IPO: Strong Profitability and Impressive Portfolios of IGaming Content
- Games Global, a promising iGaming content provider and B2B online gaming supplier, set terms for its U.S. IPO. The IPO price is expected to be between $16 and $19/share.
- With the most recent F-1/A, the company may raise ~$114M at the high end of the range at $19/share. Zinnia Limited sells additional 8.5M shares in this offering.
- Games Global has created an impressive portfolios of iGaming content through a series of successful acquisitions, and I see upside potential vs. IPO price of $17.50 at the midpoint.
Bentley Systems: The Infrastructure Software Giant Poised for a Major Buyout? What Value Can It Extract? – Major Drivers
- This is a special one-time report on Bentley Systems, an infrastructure engineering software company.
- The company is currently exploring a sale and it presents a mixed but compelling case for potential acquisition.
- Several factors contribute to its attractiveness, balanced by challenges that might influence a buyer’s decision.
SPS Commerce Inc.: Network Effects in Business Model & 3 Pivotal Growth Drivers
- In the first quarter of 2024, SPS Commerce launched a strong start to the year with a 19% increase in revenue, amounting to $149.6 million, along with a corresponding growth in recurring revenue.
- Notably, SPS Commerce capitalized on its position as a leading supplier of supply chain cloud services by intensifying investments in automation, reflecting the trend among supply chain and manufacturing leaders, 74% of whom are planning to invest in supply chain innovation and technology.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
AppFolio Inc.: Is Its Revenue Growth Sustainable? – Major Drivers
- AppFolio, a property management software provider, showcased strong financial results for Q1 2024.
- The company reported a significant 38% year-over-year increase in revenue, which calculated to $187 million for the quarter.
- This substantial growth was primarily due to increases in units and customers, along with upgrades and further adoption of value-added services.
Lattice Semiconductor Corporation: Increasing Server Share
- Lattice Semiconductor Corporation witnessed a dip in its Q1 ’24 results due to softening demand across most of its segments and end customers reducing their inventory levels.
- Sequentially, the Industrial and Automotive segment was down by 25%, while the Communications and Computing segment declined by 7%.
- Even Computing performance was affected by weaker demand in the Communications segment.
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