In today’s briefing:
- Amari Ni Mo… NTT (9432)
- Kyoden (6881 JP) MBO – An Small, Easy, Illiquid, Light But Not Horribly Unfair Done Deal at ¥600
- AMD. Doubling Down On AI Acceleration
- Softbank (9984 JP): WeWork on the Brink and Other Factors
- KPIT: Stellar Q1FY24 Earnings
- Kyoden Company (6881 JP): Founder’s JPY600 Tender Offer
- Taiwan Tech Weekly: U.S. Announces New Bans on Investment into Chinese High Tech Industries
- Fujifilm: Earnings Beat; Yet to Trade in Line with Healthcare Players
- Charter Communications Inc.: Powering Ahead With These 3 Growth Catalysts! – Financial Forecasts
Amari Ni Mo… NTT (9432)
- NTT reports a Q1 which looks like KDDI where the business looks like KDDI and a bit better than that where it doesn’t. Good. Not great.
- But NTT announced a ¥200bn buyback. Again good. Not great.
- And on Sunday, LDP politician Amari spoke on a Sunday news show about the possible govt selldown of NTT shares. 20yrs is a long time. So no overhang.
Kyoden (6881 JP) MBO – An Small, Easy, Illiquid, Light But Not Horribly Unfair Done Deal at ¥600
- Today, the personal holding company of Kyoden Co Ltd (6881 JP) founder Hashimoto-san announced a Tender Offer to take the company private.
- Together with his company, he owns 64.75%. He only needs 1.93% to tender. The combination of Shokochukin, SMBC, and Yokohama Bank get him over the line.
- This is small, illiquid, and will trade tight, but it’s a done deal.
AMD. Doubling Down On AI Acceleration
- AMD reported Q2’23 revenues of $5.4 billion, $100 million above the guided midpoint, flat sequentially but down 18% YoY, largely attributable to weakness in their client segment revenues.
- Q3’23 revenue of $5.7 billion at the midpoint, a modest 5.5% increase sequentially and ~2.5% YoY.
- AMD has a lot riding on its MI300 launch but can it really take a bite from NVIDIA’s lunch?
Softbank (9984 JP): WeWork on the Brink and Other Factors
- Softbank and the Vision Fund’s exposure to WeWork – estimated at USD1.8bn – look increasingly to be at risk of being written off
- Masa’s debts to SoftBank stand at USD5.1bn at 1QFY23 end and we believe that private company valuations are vulnerable, especially in the light of the recent Union Square Ventures write-downs
- Softbank shares trade at a 36% discount to the stated NAV; with Alibaba gone, the potential Arm IPO valuation is critical but SVF1 and 2 private company valuations remain questionable
KPIT: Stellar Q1FY24 Earnings
- KPIT reported a strong Q1FY24 with 7.1% constant-currency (CC) revenue growth and EBIDTA growth of 13.3% QoQ. EBITDA margin expanded by 90bp QoQ to end at 20%.
- KPIT is upbeat about the demand environment. OEMs are continuing to spend heavily on new technologies. KPIT itself is investing significantly in R&D, especially Generative AI.
- Deal wins was healthy at $190mm vs typical run-rate of $150mm+. The pipeline is also healthy across practices.
Kyoden Company (6881 JP): Founder’s JPY600 Tender Offer
- Kyoden Co Ltd (6881 JP) has recommended the founder’s tender offer of JPY600 per share, a 32.5% premium to the undisturbed price (9 August).
- The transaction is a two-step acquisition through a cash tender offer and subsequent squeeze-out. The lower limit of the tender offer is set at a 1.91% ownership ratio.
- The minimum acceptance condition (lower limit) requires an undemanding 5.4% minority acceptance rate. The tender offer is reasonable.
Taiwan Tech Weekly: U.S. Announces New Bans on Investment into Chinese High Tech Industries
- U.S. has announced new bans on PE and VC investment into key Chinese tech industries.
- Elan Microelectronics, ChipMOS reported good results, two longs to consider as we still see upside.
- Apple earnings short-term trades update — We’re closing out both trades, one at a loss and one roughly flat.
Fujifilm: Earnings Beat; Yet to Trade in Line with Healthcare Players
- FUJIFILM Holdings (4901 JP) reported 1QFY03/24 results today. Both revenue and OP increased 5.6% and 5.2% YoY to ¥660.8bn (vs consensus ¥649bn) and ¥52.2bn (vs consensus ¥52.1bn) respectively.
- Materials segment’s earnings were negatively impacted during the quarter due to a stagnant semiconductor market, however, we expect segment’s earnings to improve with the completion of Entegris acquisition.
- Despite the company successfully transitioning into a healthcare player, Fujifilm is still trading in line with imaging/photocopy players and there is significant upside to the company’s current share price.
Charter Communications Inc.: Powering Ahead With These 3 Growth Catalysts! – Financial Forecasts
- Charter Communications delivered a disappointing set of results as the company was unable to meet the revenue and earnings expectations of Wall Street.
- The company attracted 77,000 new Internet users in the second quarter, and its Spectrum One product and network development plans continue to pay off.
- The overall number of mobile lines was over 6.6 million at the end of the second quarter.
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