In today’s briefing:
- Altman Allure at OpenAI: Where the Hunter Gets Hunted
- SET50 Index Rebalance Preview: KCE Could Replace TIDLOR
- LS Materials IPO Bookbuilding Results Analysis
- Memory Monitor: Micron Expects 2025E to Be Best-Ever for Memory; But Valuations Have Run Up a Lot
- TSMC: Defensive AI Play in Long Upward Re-Rating Trend?
- Micron. The Rally Is Premature
- Nvidia’s China Problems, Applied Materials, and Microsoft’s Accelerators
- CDW Corporation: Navigating Market Turbulence – A Strategic Masterclass in Resilience! – Major Drivers
- Broadridge Financial Solutions: NYFIX Fill Matching: Broadridge’s Post-Trade Game Changer! – Major Drivers
- ANSYS Inc.: Impact Of Export Controls On China Operations! – Major Drivers
Altman Allure at OpenAI: Where the Hunter Gets Hunted
- Sam returned as the CEO of OpenAI days after his surprise removal. Its board was overhauled with new members – Larry Summers and Bret Taylor.
- The surprise removal of Sam was driven by philosophical differences over AI safety. Fears of employee exodus to Microsoft is the primary driver of his return to OpenAI leadership.
- Recent events have solidified Microsoft’s partnership with OpenAI and Sam. Outcome from fallout suggests Microsoft will have a larger role in shaping OpenAI’s future.
SET50 Index Rebalance Preview: KCE Could Replace TIDLOR
- With the review period complete, KCE Electronics PCL (KCE TB) should replace Ngern Tid Lor (TIDLOR TB) in the SET50 INDEX at the December rebalance.
- Liquidity is poor in Intouch Holdings (INTUCH TB) and Thai Life Insurance (TLI TB) but the stocks should be maintained in the index.
- Passive trackers will need to buy 0.9x ADV (1.2% of float) of KCE Electronics PCL (KCE TB) and sell 0.8x ADV (1.6% of float) of Ngern Tid Lor (TIDLOR TB).
LS Materials IPO Bookbuilding Results Analysis
- LS Materials IPO price has been determined at 6,000 won per share, which is higher than the high end of the IPO price range (5,500 won).
- A total 2,025 institutional investors participated in this IPO book building. The demand ratio was 396.8 to 1. The IPO offering amount is 87.8 billion won.
- We believe that its share price is likely to trade higher than the high end of our valuation range (7,953 won per share) post IPO.
Memory Monitor: Micron Expects 2025E to Be Best-Ever for Memory; But Valuations Have Run Up a Lot
- Memory names have rallied strongly, with Nanya Tech outperforming since the start of November.
- DRAM bottomed and NAND flash prices have jumped. Micron says that 2025E could be a record year for the Memory industry.
- High valuations make near-term upside for Memory names uncertain. For Long/Shorts one can consider Long Micron vs. Short SK Hynix or Long Micron vs. Short Nanya Tech.
TSMC: Defensive AI Play in Long Upward Re-Rating Trend?
- We believe TSMC represents defensive exposure to AI for investors concerned that many other AI-related stocks’ valuations may be too high.
- While one may think TSMC seems too obvious as a play, we note that the stock is up only 4.5% over the last six months.
- We view TSMC as trading at an inexpensive valuation; even a cheap valuation should our hypothesis that the stock is structurally re-rating upwards turn out to be true.
Micron. The Rally Is Premature
- Improving outlook with Q1F24 revenue forecast slightly above the high end of the guided range
- 2024 is being positioned as a “recovery year”, helping reset investor expectations about the nature and speed of the recovery
- Micron’s share price typically rallies strongest into record revenue years. 2024 will not be a record revenue year. As such, we think the present rally is premature.
Nvidia’s China Problems, Applied Materials, and Microsoft’s Accelerators
- Nvidia’s quarter was surprising to me because it was boring. There were a few incremental pieces, but the big news was everything to do with China.
- As you know, there was another round of export restrictions with a myopic focus on AI Accelerators.
- This impacted results and the outlook.
CDW Corporation: Navigating Market Turbulence – A Strategic Masterclass in Resilience! – Major Drivers
- CDW Corporation delivered mixed results for the previous quarter, with revenues below the analyst consensus.
- A strategic response to evolving market dynamics marked the recent quarter for CDW Corporation.
- The quarter was also marked by the company’s launch of the integrated brand campaign, Make Amazing Happen.
Broadridge Financial Solutions: NYFIX Fill Matching: Broadridge’s Post-Trade Game Changer! – Major Drivers
- Broadridge Financial Solutions, Inc. managed to surpass the revenue expectations as well as the earnings expectations of Wall Street, marked by an 8% surge in recurring revenue, entirely organic.
- The adjusted EPS saw a remarkable 30% increase, propelled by robust recurring revenue expansion, event-driven fee timing, and sustained expense discipline.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
ANSYS Inc.: Impact Of Export Controls On China Operations! – Major Drivers
- ANSYS Inc. delivered a mixed result in the recent quarter, with revenues below market expectations, but it surpassed the analyst consensus regarding earnings.
- These restrictions included incremental approval processes and export restrictions on selling certain ANSYS products and services to entities in China.
- Despite these challenges, ANSYS delivered a robust quarter marked by double-digit growth in Annual Contract Value (ACV).
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