In today’s briefing:
- Trading Setup Targeting the Netmarble PSR Contract, as Seen in the Case of Doosan Bobcat
- TSMC’s June Revenue Declined 9.5% MoM. Should We Be Worried?
- TSMC (2330.TT; TSM.US): The 25% YoY Growth Rate Will Be Expected in 2024.
- The Heat Is On: News Flow and Sentiment China/Hong Kong (July 12)
- China Communications Services Corp. (552.HK)-Riding the AI Wave…
- Wolfspeed Inc.: Will Its Strategic Focus on Electric Vehicle Market Become The Single Biggest Growth Lever? – Major Drivers
- Fabrinet: Why We Are Pessimistic Despite The Rapid Growth in Datacom Driven by AI Applications! – Major Drivers
- Rambus Inc.: A Story Of Market Expansion through Silicon IP Portfolio! – Major Drivers
- Softcreate Holdings (3371 JP): Coverage initiation
- Viavi Solutions Inc.: A Dive Into The Market Dynamics and Competitive Strategies in Network Expansion! – Major Drivers
Trading Setup Targeting the Netmarble PSR Contract, as Seen in the Case of Doosan Bobcat
- This block deal has an unusual PSR (price swap return) contract at ₩58,200, the July 10th closing price, likely preventing Netmarble’s typical stock price correction today.
- In 2022, a similar-sized local PSR transaction involved Doosan Bobcat Inc, with 9.9 million shares and a PSR swap price of ₩37,500.
- As for Doosan Bobcat, the stock initially dropped but rebounded near the PSR swap price, prompting local brokerages, focused on PSR fee income, to sell rather than realize capital gains.
TSMC’s June Revenue Declined 9.5% MoM. Should We Be Worried?
- June 2024 revenues of NT$207.87 billion, a decrease of 9.5% MoM but an increase of 32.9% YoY
- Q224 revenue of US$20.9 billion, $457 million above the high end, up 10.5% QoQ and up 33.7% YoY. It was also TSMC’s highest revenue quarter ever
- At NT$1,266,154 (around US$39 billion), TSMC’s YTD revenues are up 28% YoY, well in line with the company’s forecast for a >20% YoY increase in 2024.
TSMC (2330.TT; TSM.US): The 25% YoY Growth Rate Will Be Expected in 2024.
- Taiwan Semiconductor (TSMC) – ADR (TSM US) could reach a growth rate of 25% YoY this year, with a very promising outlook for 2025.
- Artificial Intelligence (AI) remains the primary focus, with plans to continue expanding capacity in 2H24 and 2025.
- The demand from Apple (AAPL US) is expected to drive higher growth in 2H24.
The Heat Is On: News Flow and Sentiment China/Hong Kong (July 12)
- Onshore Equity ETF flows in China continued to be positive for 8th week. Southbound Connect flows in July are lower than June.
- Baidu, Bilibili and GDS have had positive share price moves on the back of news flow.
- The container shipping segment has had a sharp pullback on positive Middle East news and cement maker CNBM flags a loss in the first half.
China Communications Services Corp. (552.HK)-Riding the AI Wave…
- Stable, Steady, State-owned Enterprise with upside from policy push on AI
- Lowly rated company with a new cyclical growth story in a strategic sector
- Good balance sheet with the opportunity to raise payouts and yields.
Wolfspeed Inc.: Will Its Strategic Focus on Electric Vehicle Market Become The Single Biggest Growth Lever? – Major Drivers
- Wolfspeed, a leading vertically integrated silicon carbide company, shared its fiscal Q3 2024 results, emphasizing accomplishments in operational performance yet acknowledging the market’s undervaluation of its potential.
- A key point of focus was their Mohawk Valley facility’s substantial progress towards increasing utilization and revenue generation.
- Facility enhancements and strategic shifts in production capacities were regularly discussed, reflecting an agile response to market demands, particularly within the electric vehicle sector.
Fabrinet: Why We Are Pessimistic Despite The Rapid Growth in Datacom Driven by AI Applications! – Major Drivers
- Fabrinet Q3 of Fiscal Year 2024 reflects a robust performance exceeding its own forecasts with a notable increase in revenue and earnings per share (EPS).
- The company reported a record revenue of $731.5 million, representing a 10% year-over-year growth and a 3% sequential increase from the previous quarter.
- Non-GAAP EPS was also impressive at $2.39, marking a significant rise from previous periods and exceeding the guidance provided by the company.
Rambus Inc.: A Story Of Market Expansion through Silicon IP Portfolio! – Major Drivers
- Rambus Inc. delivered favorable results for the first quarter of fiscal year 2024, demonstrating resilience and strategic agility amid varied market conditions.
- A pivotal aspect of Rambus Inc.’s growth strategy involves diversifying its product offerings, including the expansion into DDR5 server Power Management Integrated Circuits (PMICs), which complements its existing memory interface chips.
- This development is well-timed, as the industry increases demands for enhanced memory performance driven by applications like AI.
Softcreate Holdings (3371 JP): Coverage initiation
- In FY03/24, revenue grew 15.1% YoY to JPY27.9bn, operating profit increased 19.6% YoY to JPY5.2bn, recurring profit increased 19.3% YoY to JPY5.4bn, and net income attributable to owners of the parent increased 19.0% YoY to JPY3.3bn.
- In the EC Solutions business, revenue increased 16.7% YoY to JPY15.6bn, and recurring profit rose 17.8% YoY to JPY4.0bn, mainly due to growth in revenue from e-commerce site development and e-commerce cloud services.
- In the IT Solutions business, revenue grew 12.7% YoY to JPY12.5bn and recurring profit rose 8.2% YoY to JPY2.8bn owing to higher revenue from IT cloud services and security and infrastructure construction.
Viavi Solutions Inc.: A Dive Into The Market Dynamics and Competitive Strategies in Network Expansion! – Major Drivers
- Viavi Solutions, a prominent network testing company, recently disclosed its financial results for the third quarter of Fiscal Year 2024, revealing mixed outcomes in a challenging market environment.
- The company reported a total net revenue of $246 million, marking a modest year-over-year decline of 0.7% and a sequential drop of 3.3%.
- This revenue, although slightly above the lower end of their forecasted range, underscores the cautious spending patterns observed across several of its customer segments, particularly within enterprise solutions.
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