In today’s briefing:
- Renesas (6723 JP) ANOTHER Clean-Up Block Trade as Hitachi/NEC Exit
- Renesas Electronics (6723 JP): Passives Will Need to Buy a LOT This Year
- Renesas Electronics Placement – Another US$2bn Deal, Momentum and Index Weights Should Help
- Alibaba’s Share Prices Are Lacking Further Catalysts After Jack Ma and Joe Tsai’s Stock Acquisition
- Good Entry Point as Tesla Stabilizes Its 4Q23 Asp and Profits Per EV
- ASML Guides Q124 Down 27% QoQ, Shares Surge >8%. What Gives?
- What SK Hynix’s Latest Results Indicate for PC & Mobile Makers into 2025E, Including Apple
- Huawei’s Latest Operating System Completely Breaks with Android
- MicroStrategy: Initiation of Coverage – Revolutionary AI and Cloud Surge! Why MicroStrategy Could Be Your Next Goldmine in Tech Investment! – Major Drivers
- Vanguard (5347.TT): 1Q24F Revenue Outlook Is Down QoQ; 2024F Demand to Grow by Around 10% YoY.
Renesas (6723 JP) ANOTHER Clean-Up Block Trade as Hitachi/NEC Exit
- Last November saw the clean-up trade of INCJ getting out of Renesas Electronics (6723 JP). That was 180+mm shares, well over-subscribed.
- Today we have news Hitachi and NEC are getting out of their stakes. That’s 123mm shares in an Accelerated Block Offering of about US$2bn. I expect it will go well.
- Recent gains in semiconductor stocks globally make this larger discount attractive. I expect a little heaviness but not much. There are index repercussions for international indices.
Renesas Electronics (6723 JP): Passives Will Need to Buy a LOT This Year
- Hitachi Ltd (6501 JP) and NEC Corp (6701 JP) are looking to sell their entire stake in Renesas Electronics (6723 JP) in a deal that will raise around US$2.2bn.
- Renesas Electronics (6723 JP) dropped a bit in November following INCJ’s stake sale but momentum has picked up again as the stock reaches for new highs.
- The float increase in global indices will coincide with the offering. There will be BIG buying by TSE Tokyo Price Index TOPIX (TPX INDEX) trackers in October.
Renesas Electronics Placement – Another US$2bn Deal, Momentum and Index Weights Should Help
- Hitachi Ltd (6501 JP) and NEC Corp (6701 JP) aim to raise around US$2.1bn via a sell-down of their stake in Renesas Electronics (6723 JP).
- The stock has seen a number of deals over the past few years with the most recent one being a cleanup in Nov 2023, which did well.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Alibaba’s Share Prices Are Lacking Further Catalysts After Jack Ma and Joe Tsai’s Stock Acquisition
- Investor confidence toward the Chinese tech sector remains fragile after the government crackdown, and Alibaba Group was particularly hard hit due to Jack Ma’s previous conflicts with Chinese regulators.
- Growth of its main eCommerce business is in question given the softening Chinese economy and intense competitions. Additionally, the growth of its cloud computing unit is also slowing down.
- China’s stock market stabilization fund is not likely to benefit Alibaba directly as it will be used to buy onshore stocks only.
Good Entry Point as Tesla Stabilizes Its 4Q23 Asp and Profits Per EV
- Blended ASP of decline of 1% q/q in the past two quarters in 2H23, better than 3-10% q/q decline during 3Q22-2Q23, resulting in Tesla’s blended ASP decline to decelerate.
- Due to Tesla’s cost cutting efforts with nice inventory control, we calculates profits/EV rebounded nicely by 21% q/q to US$3,490 per EV in 4Q23, much nicer than no profits.
- Good improvement on its FSD Beta version 12.1.2 lately might become a pure profits/EV boost by incremental subscription of US$10,000-15,000 per EV or monthly fee by existing Tesla owners.
ASML Guides Q124 Down 27% QoQ, Shares Surge >8%. What Gives?
- ASML reported Q423 revenues of €7.2 billion, up 7.5% QoQ and ~€100 million above the guided midpoint for the quarter.
- ASML guided Q124 at €5.25 billion, down a very significant 27% sequentially. Also reiterated their previous forecast for 2024 revenues to be remain flat with 2023
- ASML shares surged >8% in overnight trading. What’s going on here?
What SK Hynix’s Latest Results Indicate for PC & Mobile Makers into 2025E, Including Apple
- SK Hynix results surpised consensus with a swing to positive operating profit; The company expects industry demand growth to exceed supply growth by a wide margin in 2024E.
- Management suggests optimism not just for 2024E, but also for 2025E. 2025E is when a much larger positive demand impact from AI is expected as AI products will expand substantially.
- SK Hynix comments regarding AI phones imply that consumers will most likely need to upgrade their phones, including iPhones, to take full advantage of AI capabilities
Huawei’s Latest Operating System Completely Breaks with Android
- Huawei Technologies Co. Ltd. on Thursday launched the latest version of its own operating system — HarmonyOS NEXT, which will no longer support Android apps and can only accommodate apps specifically developed for it.
- The Chinese telecom equipment giant said the Beta version for developers will be released in the second quarter, and the general version for consumers in the fourth quarter.
- Insiders from Huawei expect the new Mate smartphones to be released in the second half with the HarmonyOS NEXT installed.
MicroStrategy: Initiation of Coverage – Revolutionary AI and Cloud Surge! Why MicroStrategy Could Be Your Next Goldmine in Tech Investment! – Major Drivers
- This is our first report on MicroStrategy, a company at the forefront of enterprise analytics software.
- In the third quarter of 2023, the company revealed notable developments in both its primary software ventures and its strategic Bitcoin investments.
- The overall revenue for this period reached $129.5 million, marking a 3% year-over year increase, with a significant 16% rise in software license revenues, totaling $45 million.
Vanguard (5347.TT): 1Q24F Revenue Outlook Is Down QoQ; 2024F Demand to Grow by Around 10% YoY.
- The current market outlook is expected to improve, although the demand is still down in 1Q24F.
- The 2Q24F revenue could potentially increase by a high single digits QoQ at least.
- The demand is expected to grow by around 10% YoY in 2024F. This indicates a rebound, although not a strong one.
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