Daily Brief TMT/Internet: NVIDIA Corp, Taiwan Semiconductor (TSMC) – ADR, Money Forward , Manycore Tech, Next 15 Group , Acal PLC, ASML Holding NV and more

• NVIDIA Corp (NVDA US)  said it will take a $5.5 billion financial hit after Washington fresh restrictions on H20 AI chips designed for the Chinese market. 
• The Trump Administration’s move comes as as a surprise, the U.S. now requires a special export license for these chips, but historically, no such licenses have ever been granted.
• Some estimates Nvidia may lose $10 billion in revenue, as most of the affected chips are already manufactured and now unsellable, plus the ban could benefit Chinese competitors like Huawei.

• TSMC: +21.5% Premium; Consider Shorting the Spread at This Level
• ChipMOS: +3.2% Premium; Good Level to Consider Shorting the Spread: Local Shares’ Short Interest at Multi-Year Highs
• CHT: +1.3% Premium; Good Level to Consider Shorting the Spread; ADR Short Interest at Multi-Year Highs

• Money Forward (3994 JP) MF’s recent earnings was no surprise to us as we continued to highlight that the company’s business model is far inferior to its counterpart freee. 
• The last 2-3 quarterly results have made that discrepancy clear and MF’s non-BO SaaS businesses are only dead weight and have helped conceal weaknesses of its business model.
• MF’s share price is down 19.3% YTD and think the market has finally come to terms that MF is losing ground whereas freee has managed to turn around its profitability.

• Manycore Tech (KOOL US)  is looking to raise up to US$300m in its upcoming Hong Kong IPO.
• Manycore (MC) is a fast-growing, disruptive design and visualization platform powered by artificial intelligence (AI) technologies and purpose-built graphic processing unit (GPU) clusters.
• In this note, we look at the firm’s past performance.

Next 15 faced a number of challenges in the year to end January, with a difficult macroeconomic backdrop, relatively high exposure to the tech sector and the loss of the Mach49 contract. This masked some strong performances elsewhere within the group, particularly at SMG where existing relationships with retailers have been extended and important new customers brought on board. Next 15 has been responding to market conditions through simplifying the group structure (with more to do here), taking out duplicated costs and working to drive greater alignment between the various group companies and activities. The balance sheet is in good enough health to support continuing bolt-on M&A, investment in AI and new capabilities, with the maintained dividend providing an attractive yield.

discoverIE’s FY25 trading update confirmed that it generated record underlying earnings despite a 3% revenue decline. Encouragingly, Q425 orders were 11% higher q-o-q and up 15% y-o-y on an organic basis. Tariffs are not expected to have a material direct impact and, with a track record of protecting profitability during downturns and organic revenue growth at the upper end of its peer group over the cycle, we view the company as well-placed to navigate this uncertainty. Good growth in design wins over the last year provides the foundations for organic revenue growth when customers start to order in line with end demand.

• Small beat in 1Q25, small miss in 2Q (guidance vs Consensus). 2025 outlook unchanged but higher uncertainty, possibly weaker margins in 2H. Consensus on the middle of the guidance range.
• Management comments on the benefits of High NA EUV, trying to counter the concerns on higher cost. Mngt says there are other benefits (cycle time, process simplification meaning higher yield)
• The stock is trading at -1 stdev below average PEx, or 25x forward EPS. Problem is Avg PEx includes 2 valuations bubble. Excluding these, the stock is at average PEx.