Daily Brief TMT/Internet: Renesas Electronics, NetEase , Uchi Technologies, OpenAI, QYOU Media , Delta Electronics and more

• Today after the close, Mitsubishi Electric (6503 JP) announced the sale of its position in Renesas Electronics (6723 JP). That’s 50,706,800 shares.  
• This is the third large block in four months (Renesas in November for 223mm shares, NEC and Hitachi in January 2024 for 123mm shares).
• This is smaller, and reasonably well-flagged. Index demand is longer-dated.

• Mitsubishi Electric (6503 JP) is looking to raise approximately US$800m through an accelerated secondary block deal, via selling 50.71m shares (2.6% of TSO) of Renesas Electronics (6723 JP) stock. 
• The deal will be an easy one to digest at only three days of three month ADV.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• China announced game approval for the Feb batch. The number of games approved remained at a higher level than 2023.
• The pace of China game approval appears to be accelerating, to the same level as pre-tightening.
• Netease gets one game approved but we don’t see that the acceleration of game approval benefits big names proportionally.

• Uchi Technologies (UCHI MK) reported a solid Q4FY23/FY23 result, with revenue up 18%/13.2% YoY, operating profit up 28%/21% YoY, but profits up 9%/8.3% YoY (due to increased taxation).
• For FY24, the company conservatively guided a mid-single-digit decline in revenue growth. In FY23, the company guided flat USD revenue growth (but delivered 9.2% YoY).
• Assuming the current currency and guidance, the stock trades at 14x FY24e with a yield of 7% (assuming a 100% payout similar to last two years) and ROCE above 60%. 

• OpenAI, founded in 2015 as a nonprofit research lab, has transitioned into a for-profit entity with ambitious goals of creating artificial general intelligence to benefit humanity.
• The company’s CEO, Sam Altman, is focused on solving the problem of super intelligence and has plans to set up his own semiconductor manufacturing pipeline and extend human lifespan.
• OpenAI’s business model now involves catering to enterprise customers to generate revenue, and they face challenges in balancing their grand mission with the need for significant investment.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• QYOU Media has reported several positive announcements over the last month that reaffirm our confidence in the story.
• This includes record months for its influencer marketing business and QGamesMela reaching various milestones.
• We recently published a management interview with QYOU, watch it here.

• Delta Thailand has underperformed Delta Taiwan since our last Delta Monitor piece. Delta Thailand’s market cap has fallen to become nearly equal to Delta Taiwan.
• Both have the same growth profile yet Delta Thailand is more expensive and will continue to suffer from a potential share sale overhang and risk of SET 50 Index changes.
• EVENT: Taiwan’s earnings release is imminent. Results could further highlight to the market that Delta Taiwan is the better stock to own.