In today’s briefing:
- Is Samsung M&A About to Happen?
- StubWorld: Intouch “Cheap” As Thaksin Returns
- ARM Holdings Pre-IPO – Pre-Privatisation to Pre-Listing Changes – Slower Growth, Lower Margins
- ARM Holdings IPO: The Bull Case
- Nvidia: Better than Dreamed
- Western Digital Corporation: How Cloud is Redefining Their Revenue Streams! – Major Drivers
- [iQIYI, Lnc. (IQ US, BUY, TP US$6.25) Review]: Ads Revenue Will Continue to Have Fair Growth
- Memory Monitor: SK Hynix Appearing Prescient; Relative Value in Micron
- Monolithic Power Systems Inc.: An Exciting Leap into EV & AI Domains! – Major Drivers
- Comparing Liquidity on Uniswap and Binance
Is Samsung M&A About to Happen?
- Local press states that Samsung Electronics Pref Shares (005935 KS)sold shares as they look to invest in their future capex
- The capex amount for 2023 will be around 40-50 trillion KRW and it doesn’t seem like W3 trillion is a needle mover
- With a new 3 year shareholder return plan, I would think maybe cash is needed to secure ammunition for M&A
StubWorld: Intouch “Cheap” As Thaksin Returns
- Intouch Holdings (INTUCH TB) plumbs new 12-month lows for its implied stub, and NAV discount as the former PM returns from exile.
- Preceding my comments on Intouch are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
ARM Holdings Pre-IPO – Pre-Privatisation to Pre-Listing Changes – Slower Growth, Lower Margins
- Softbank Group (9984 JP) aims to raise around US$8-10bn via selling some of its stake in ARM Holdings’ US IPO.
- ARM develops and licences high-performance, low-cost, and energy-efficient CPU products and related technology, which is used by semiconductor companies and OEMs to develop their own products.
- In this note, we compare its recent performance versus its performance prior to its privatisation and discuss the changes since then.
ARM Holdings IPO: The Bull Case
- ARM Holdings (1822695D US) is the world’s most widely licensed and deployed processor. Softbank Group (9984 JP) is seeking to raise about US$6-10 billion by listing ARM on Nasdaq.
- Softbank Privatised ARM for US$32bn in 2016 and unsuccessfully tried to sell it to NVIDIA Corp (NVDA US) for US$40bn in 2022. In August, Softbank acquired Vision Fund’s ARM stake.
- The bull case rests on the growth in licensees, high customer switching costs, rising royalty rates, strong revenue visibility and a highly profitable and cash-generative business model.
Nvidia: Better than Dreamed
- Nvidia, in characteristic fashion, murdered EPS estimates.
- Revenue was $2 billion ahead of the guide, and the guide was another $4 billion ahead of consensus for the next quarter.
- Going into the print, many people were concerned that positioning was bad, i.e., everyone was bullish and expectations were too high. Well, they did not disappoint.
Western Digital Corporation: How Cloud is Redefining Their Revenue Streams! – Major Drivers
- Western Digital Corporation delivered an all-around beat in the quarter, with total revenue of $2.7 billion.
- In the fourth quarter, cloud comprised 37% of all revenue at $1 billion, down 18% from the previous quarter and 53% from the previous year.
- Shipments of nearline bits were 59 exabytes, a 26% sequential decline driven by persistent difficulties among cloud clients.
[iQIYI, Lnc. (IQ US, BUY, TP US$6.25) Review]: Ads Revenue Will Continue to Have Fair Growth
- IQ reported 2Q23 revenue and non-GAAP net income 0.2%/28.5% vs cons.
- We cut our projections for 3Q23’s membership services revenue, but increased estimations for online ads services revenue, and raised margin forecasts for 2023.
- We maintain our US$ 6.25 TP, implying 16.2X PE in 2023.
Memory Monitor: SK Hynix Appearing Prescient; Relative Value in Micron
- Major memory names have fallen with the recent market concerns and only staged a small reboound due to Nvidia’s bullish results.
- NAND and DRAM price declines have stabilized. Demand for DRAM from servers is expected to exceed that from mobile devices, driven by AI usage.
- We see relative value in Micron vs. Nanya Technology and SK Hynix. SK Hynix is ahead of the game for AI, and Nanya offers focused DRAM exposure however.
Monolithic Power Systems Inc.: An Exciting Leap into EV & AI Domains! – Major Drivers
- Monolithic Power Systems managed to exceed the revenue expectations as well as the earnings expectations of Wall Street.
- Storage and computing revenue increased in the quarter.
- Industrial revenue for the second quarter of 2023 also increased due to higher equipment sales for power sources and industrial meter applications.
Comparing Liquidity on Uniswap and Binance
- Market depth is a widely used measure of liquidity, commonly calculated across the order books of cryptocurrency pairs on centralized exchanges (CEXes).
- It provides the amount of bids and asks at varying distances from the mid-price, encompassing a range from -0.1% to 10%.
- This chart shows cumulative ETH-USDT bid and ask volumes at various levels on the ten largest CEXes.
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