In today’s briefing:
- Renesas (6723) – Denso Selldown Starts; Fourth Large Renesas Block in 6mos (Two More To Come)
- Renesas Block – While Not Particularly Well Flagged, Recent Selldowns in the Stock Have Done Well
- Shift Up IPO Preview
- Tech Supply Chain Tracker (21-May-2024): EVs and smart driving tech hit by Chinese car market price war.
- GLOBALFOUNDRIES Inc.: Government Funding Partnership & 3 Critical Growth Drivers
- Twilio Inc.: Twilio Alpha To Pioneer Early AI Developments & Other Major Drivers
- EQT/Keywords Studios: An Offer You Can’t Refuse
- Datadog Inc.: How Is The Increase in AI Adoption Impacting Their Future Growth Trajectory? – Major Drivers
- Electronic Arts Inc.: Are The AI Investments Speeding Up Their Game Creation? – Major Drivers
- Match Group: Will Its Investments In AI For Enhancing Their Algorithms Pay Off? – Major Drivers
Renesas (6723) – Denso Selldown Starts; Fourth Large Renesas Block in 6mos (Two More To Come)
- Today post-close, Denso Corp (6902 JP) (via BofA) announced a selldown of 78,127,800 shares of Renesas Electronics (6723 JP). This is the latest in a line of block exits.
- There was the 130mm offering in November last year by INCJ. There was 123mm shares in Jan 2024 by NEC and Hitachi. A month later, 50mm shares from Mitsubishi Electric.
- In general, they have been absorbed, but one hasn’t needed to buy in the market. Some have broken price. Here, the pricing range is aggressive.
Renesas Block – While Not Particularly Well Flagged, Recent Selldowns in the Stock Have Done Well
- Denso Corp (6902 JP) is looking to raise US$1.39bn from selling a portion of its stake in Renesas Electronics (6723 JP).
- DENSO’s selldown is a small one at just 4.3 days of ADV. While there is an overhang of around 4% of TSO, DENSO will be locked up for 270 days.
- In this note, we will talk about the placement and run the deal through our ECM framework.
Shift Up IPO Preview
- Shift Up (462870 KS) is getting ready to complete its IPO in KOSPI in June 2024. Established in 2013, Shift Up is one of the leading game developers in Korea.
- The IPO price range is 47,000 won to 60,000 won. The IPO offering amount is 340.8 billion won to 435 billion won.
- According to the bankers’ valuation, the market capitalization range of the company ranges from 2.73 trillion won to 3.4 trillion won. This is the second largest IPO in Korea YTD.
Tech Supply Chain Tracker (21-May-2024): EVs and smart driving tech hit by Chinese car market price war.
- EVs and smart driving systems in China’s car market impacted by price competition, leading to changes in industry dynamics.
- Blue carbon uncertainties could hinder progress towards achieving net-zero goals, says scientist, highlighting need for further research.
- Indian solar firm reducing dependence on Chinese imports for solar components to enhance self-sufficiency, aiming for greater control over supply chain.
GLOBALFOUNDRIES Inc.: Government Funding Partnership & 3 Critical Growth Drivers
- GlobalFoundries Inc. has presented its first quarterly financial results for the fiscal year of 2024.
- Despite facing some challenges, the outcomes have exceeded the guidance ranges indicated in the firm’s fourth-quarter earnings call.
- The industry is showing signs of emerging from a period of inventory correction and uncertainty due to ongoing macroeconomic and geopolitical issues.
Twilio Inc.: Twilio Alpha To Pioneer Early AI Developments & Other Major Drivers
- Twilio Inc., a cloud communications platform, had a strong start to the year, exceeding its first quarter guide and reporting $1.04 billion in revenue and $160 million in non-GAAP income from operations.
- The company’s revenue represents a significant year-over-year increase, driven by a record quarter of non GAAP gross profit of $566 million and strong free cash flow of $177 million.
- Twilio has demonstrated disciplined execution across the board, leading to year-over-year growth and profitability.
EQT/Keywords Studios: An Offer You Can’t Refuse
- Keywords Studios (KWS LN) is in advanced discussions with EQT regarding a 2,550p/share possible cash offer (+1.76p final dividend), which the Board is minded to recommend. PUSU deadline is 15 June.
- Premium (including divi) is c.74%; the implied equity value is c. €2,363 million and the implied EV is c. €2,477 million. The offer seems fair vs. the median of comparables.
- The offer is pitched at a level that cannot be refused, even considering that Keywords Studios seemed grossly mispriced before the offer from EQT. Gross spread is 11.7%. Long.
Datadog Inc.: How Is The Increase in AI Adoption Impacting Their Future Growth Trajectory? – Major Drivers
- Datadog, during its First Quarter 2024 Earnings, has revealed optimistic outcomes for the quarter.
- A 27% year-on-year increase in revenue at $611 million, surpassing the higher end of company expectations, signaled solid financial growth.
- Furthermore, the increase in the customer base to approximately 28,000, up from about 25,500 during the same period last year, brings a positive outlook for the company.
Electronic Arts Inc.: Are The AI Investments Speeding Up Their Game Creation? – Major Drivers
- The past fiscal year and the final quarter of Electronic Arts (EA) have seen an unexpected increase in growth, bringing more entertainment and deeper experiences to consumers.
- During this timeframe, live services significantly contributed to revenue streams by providing fresh content which translated into long term consumer loyalty and increased spending.
- The past year witnessed the successful launch of EA SPORTS FC, a multi-platform experience which drove strong engagement across experiences due to its ability to connect and engage players globally.
Match Group: Will Its Investments In AI For Enhancing Their Algorithms Pay Off? – Major Drivers
- Match Group’s latest earnings revealed a challenging environment, but also highlighted several growth opportunities for the company in the long-term.
- While acknowledging some headwinds, Bernard Kim, the CEO, emphasized the enduring power of their dating applications, and how they have transformed the way people meet and connect.
- The transcript suggested that despite some users still harbouring a nostalgic preference for organic encounters, dating apps like those created by Match Group have become indispensable tools in today’s dating scene.
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