In today’s briefing:
- Samsung Electronics: Block Deal Sale of 5.2 Million Shares by Lee Boo-Jin
- Samsung Electronics Placement – Better Timing This Time Around
- TSMC (2330.TT; TSM.US): US$6.6bn from US CHIPS Act; the Earthquake Impact and the 2nd Japanese Fab.
- Beaten Down Semiconductor Could be AI Play
- Memory Monitor: Nanya’s Results to Provide Latest Color on DRAM Post Earthquake; Short Int Rising
- Naspers (NPN) X Prosus (PRX): Performance for Q1 2024, Gains Driven by Tencent, NAV Growth
- Canal+/Multichoice Group: Agreed Offer
- UI: Product Rollouts Fuel for Optimism
Samsung Electronics: Block Deal Sale of 5.2 Million Shares by Lee Boo-Jin
- After the market close on 8 April, it was reported that Lee Boo-Jin will sell 5,247,140 shares of Samsung Electronics in a block deal (up to 443 billion won).
- The expected block deal sale price is 83,700 to 84,500 won per share, which represents a discount rate of up to 0.95% compared to the closing price on 8 April.
- We are positive on this block deal sale and on Samsung Electronics. We would take the deal.
Samsung Electronics Placement – Better Timing This Time Around
- KEB Hana Bank, on behalf of Lee Boo-Jin, is looking to raise up to US$325m via selling 0.1% of Samsung Electronics (005930 KS).
- The deal appears to be somewhat well flagged and the company recently reported better operating numbers for 1Q24.
- In this note, we will run the deal through our ECM framework and talk about the recent updates.
TSMC (2330.TT; TSM.US): US$6.6bn from US CHIPS Act; the Earthquake Impact and the 2nd Japanese Fab.
- Today, the U.S. Department of Commerce and TSMC Arizona have signed a non-binding preliminary memorandum of terms for US$6.6 billion in direct funding under the CHIPS and Science Act.
- We estimate the impact of the earthquake on April 3rd should result in a loss of within 0.5% in 2Q24F, which means it should not affect our 2Q24F revenue expectations.
- TSMC’s 1st Japan Fab is expected to commence pilot production in February, and the 2nd Fab is projected to begin production of N6/N7 in 2027F.
Beaten Down Semiconductor Could be AI Play
- Maxlinear has probably been among this semiconductor cycle’s worst companies, if not the worst.
- I think that it might be time to give them a fresh look.
- Maxlinear was founded in 2003 in Carlsbad, California, by eight engineers. Today, Kishore Seendripu (CEO/Chairmen) and Curtis Ling (CTO) are still founders and work at the company. Maxlinear is a fabless company focused on mixed-signal products in the semiconductor industry.
Memory Monitor: Nanya’s Results to Provide Latest Color on DRAM Post Earthquake; Short Int Rising
- DRAM producer Nanya Tech will report its 1Q24E results on April 10th.
- While Micron has said it is evaluating the impact of the Taiwan earthquake on its operations and has halted price discussions with clients, Nanya could provide latest DRAM outlook color.
- Short interest has spiked ahead of Nanya’s results; We note that the company has a large revenue and margin rebound it needs to deliver on to meet 2024E consensus.
Naspers (NPN) X Prosus (PRX): Performance for Q1 2024, Gains Driven by Tencent, NAV Growth
- Naspers and Prosus outperformed the benchmark by a large margin, ending the quarter up 7.3% and 6.7%, respectively. The Capped SWIX finished the quarter down 2.3%.
- Tencent was up 3.5% in HKD and 6.5% in ZAR.
- Tencent currently makes up 74% of Prosus’ NAV, down 1 percentage point from 75% at the start of the year.
Canal+/Multichoice Group: Agreed Offer
- MultiChoice Group (MCG SJ) and Canal+ announced a cooperation agreement (with exclusivity period) regarding Canal+’s mandatory offer at ZAR 125/share (c. $1.9 billion), 67% premium, 6.7x EV/25e EBITDA.
- On both multiples and DCF, the offer seems fair. My fair value estimate (DCF-based) is ZAR 122.68/share (WACC 16.5%, 2.4% implied perpetuity growth rate).
- Considering the 133% share decline from March-November 2023, shareholders must be relieved by the offer and will surely tender. My TP is ZAR 125. Gross spread is 5.7%. Buy.
UI: Product Rollouts Fuel for Optimism
- Product introductions remained a core part of Ubiquiti’s (UI) business in calendar first quarter with more product rollouts in the period
- The new products come at a time when Ubiquiti has ample inventory, which should bode well for revenue growth as VARs, Ubiquiti’s primary customers
- Ubiquiti has managed to offset the slowdown in service provider from enterprise customers and we continue to believe this trend continued to be the case in the March quarter.
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