Daily Brief TMT/Internet: Samsung Electronics, Kioxia Holdings , Taiwan Semiconductor (TSMC), Silverlake Axis , Via Technologies, yutori , Enfusion, Compal Electronics, Boku Inc, Genpact Ltd and more

• Korea Exchange announced the long awaited Korea Value Up Index (“K Value Up Index”) (composed of 100 stocks) today. 
• Korea Exchange used a 5-step screening process to select the 100 companies in this index including market cap, profitability, shareholder returns, market evaluation, and capital efficiency. 
• This Value Up index is part of the bigger “Corporate Value Up ” program in Korea. These efforts to improve Korea’s corporate governance policies is a marathon, not a sprint. 

• Significant peer price performance declines leaves IPO valuation stretched, the desired discount multiple to attract interest has suddenly become a premium
• Investor interest in memory semiconductors, AI derivative stocks has cooled
• Peer price sell-offs are extreme but could quickly change, reflecting the highly cyclical nature of the sector

• Average EM fund weights and active fund ownership hits record highs in TSMC
• However, investor caution is starting to surface, with 13.4% of funds shifting to underweight  in the last six months, driving the net underweight to a 15-year low of -1.21%.
• Net outflows of $3 billion over the past six months, led by Invesco, JP Morgan, and MFS, and with four times more sellers than buyers.

• On the 26 August, Goh Peng Ooi, founder and executive chair, made a voluntary unconditional general Offer for the 25.9% in Silverlake Axis (SILV SP) not held.
• The Offer Doc for this S$0.36/share cash Offer was dispatched on the 26th August.  The Circular is also now out, which incorporates the IFA opinion.
• Trading through terms. The first close is the 7th October. I don’t expect a bump, and the share price gradually retraces back to cash terms.

• Via Technologies (2388 TT) is looking to raise US$212m in its global depository receipts (GDRs) offering. Proceeds will be used to purchase overseas raw materials, and to replenish working capital.
• Similar to previous GDR listings, the deal has had a long drawn out approval process. Thus, the deal is a very well flagged one.
• The deal is a relatively small one to digest at 5.8 days of the stock’s three month ADV.

• Zozo-Owned Yutori has just acquired a womenswear brand and plans a series of acquisitions, with ambitions to become the Zozo of the younger generation.
• So far, it has grown very fast on the back of strong support from Japan’s youth looking for street fashion but this latest move will reach into new segments.
• Unlike Zozo, Yutori is investing in a chain of stores which have helped push awareness and sales and is the right strategy for Japan’s store-addicted consumers.

• Enfusion reported its second quarter 2024 earnings with results aligning closely with the company’s prior guidance and consistent performance expectations in the medium term.
• The company posted $49.5 million in revenue, marking a 16% year-over-year growth.
• The adjusted EBITDA came in at $10.1 million, translating to a 20.5% margin.

• Lenovo commits $1B to AI advancements, strengthens F1 collaboration, showcasing innovation in technology sector.
• Garmin experiences growth in SEA sales for smart wearables, indicating a maturing market and strong consumer demand.
• Taiwan’s Transcom gains from global surge in military spending, develops world’s first open-source 6G core network, while Stellantis partners Maserati with China’s Chery amidst struggles in German automotive industry.

Boku reported 24% y-o-y revenue growth in H124, with both digital wallet/account-to-account (A2A) payments and direct carrier billing (DCB) payments growing at double-digit rates. Adjusted EBITDA grew 18% y-o-y with a margin of 30.1%. With ambitions to become the best localised payment partner for global commerce, Boku continues to invest in enhancing its product portfolio and strengthening its compliance and treasury functions. A pipeline of new digital wallet/A2A launches for major merchants and seasonal factors support continued strong growth in H224 and 2025. With FY24 outlook maintained, our revenue and adjusted EBITDA forecasts are unchanged.

• Genpact Limited’s Q2 2024 earnings report and conference call, led by CEO BK Kalra and CFO Michael Weiner, offered insights into the company’s performance and strategy, presenting a mixed outlook with both notable strengths and areas for improvement.
• Genpact reported Q2 revenue of $1.18 billion, reflecting a 6% year-over-year increase, surpassing their guidance.
• This growth was driven by strong performance across Data-Tech-AI and digital operations.