Daily Brief TMT/Internet: Sea Ltd, DB Hitek Co., Ltd., Softbank Group, KMW Co Ltd, Lenovo, Twitter Inc, Bumble, Zoominfo Technologies and more

• Consensus remains positive about Sea Ltd (SE US) with 12.3% QoQ revenue growth in Q2 and a 32.2% revenue CAGR over the next two years.
• However, with Free Fire losing active players and Shopee’s growth momentum in South East Asia broken, we expect a disappointing Q2 from Sea Ltd.
• Free Fire is on its last legs and Shopee has decided to halt its geographic expansion. Thus we think that there’s significant downside to Sea’s Q2 and medium-term consensus.

• DB was notified of the conversion to a holding company by the Korea FTC. DB must complete the conversion to a holding company by January 1, 2024.
• DB has no option but to ECO DB HiTek, the same trick employed for LG Energy Solution, to meet the 30% stake obligation for DB HiTek.
• There are still opportunities for outright shorting on DB HiTek as DB will likely announce DB HiTek split before August 12.

• The planned eToro IPO via SPAC merger with FinTech V was terminated in early July, due delayed regulatory process as well as poor market conditions
• The now defunct SPAC deal had implied an eToro valuation in excess of USD10bn; post failed SPAC deal, its latest funding round implies a valuation range of USD5bn to USD6bn
• Softbank made its eToro investment through the Vision Fund 2 in 4Q 2020; Softbank had been counting on the SPAC deal with FinTech V as its partial eToro exit strategy

• The review period for the September rebalance of the KRX New Deal indices started on 1 May and will run till 29 July. Implementation is on 8 September.
• Intellian Technologies (189300 KS) and Seojin System Co, Ltd. (178320 KS) could replace Danal Co Ltd (064260 KS) and Kcp Co Ltd (060250 KS) in the Internet Index.
• Nexon Games (225570 KS) could replace Devsisters (194480 KS) in the Game Index, and KMW Co Ltd (032500 KS) could replace AfreecaTV (067160 KS) in the BBIG Index.

Lenovo has launched a roadshow to market dual-tranche 144A/RegS bond offerings of 5.5Y and 10Y. The 10Y notes will be the company’s first green bonds, while the 5.5Y bonds will be conventional notes. Proceeds from the green bonds will be used to finance or refinance eligible projects, including green buildings and renewable energy initiatives. 

Lenovo also launched a concurrent tender offer for the USD 4.75 23 notes, of which USD 687 mn is outstanding. The tender offer price is USD 1,005 per USD 1,000 principal. The consideration will include accrued interest. The tender cap will be determined and announced on or around July 22nd, after the company has priced the notes offerings.

Initial price guidance was announced earlier today, as follows: 5.5Y: CT5 + 290 bps, and 10Y: CT10 + 370 bps. We find this fair, in view of the existing LENOVO curve and taking into account global peers HPQ and DELL.

• Delaware Chancery Court rejected Elon Musk’s excessive demand for more time to support his dubious claims against Twitter than he took to create and ram through his hostile buyout.
• Twitter’s solid legal case against Musk improves odds the sale of the company could be court-ordered before year end.
• If so, this is by far the best outcome for Twitter’s wary bondholders.

• Bumble is the second-largest player in the online dating market, right behind Match Group.
• The company had a decent start to 2022 with lucrative revenue growth and a total group revenue that was driven by a continuous strength in the Bumble app.
• The management continued its acquisition-led geopgraphic expansion and acquired famous Gen Z dating app, Fruitz to expand into Europe.

• This is our first report on go-to-market intelligence and engagement platform, ZoomInfo Technologies which is catering to sales and marketing teams across the globe.
• The expanding Revel platform of the company is a positive development and its expanding database bodes well for its enterprise customers.
• ZoomInfo has recently partnered with Sales Confidence for empowering revenue professionals through data privacy compliance and sales solutions.

• ZoomInfo Technologies is a major go-to-market intelligence and engagement platform that provides critical tools for sales and marketing teams and helps in lead generation and various other aspects of their work.
• The company’s rapidly expanding Revel platform is a positive development and its expanding database bodes well for its enterprise customers.
• ZoomInfo has recently partnered with Sales Confidence for empowering revenue professionals through data privacy compliance and sales solutions.

• This is our first report on the online dating giant, Bumble.
• The company had a decent start to 2022 with lucrative revenue growth and a total group revenue that was driven by a continuous strength in the Bumble app.
• The company continued its acquisition-led geopgraphic expansion and acquired famous Gen Z dating app, Fruitz to expand into Europe.