Daily Brief TMT/Internet: Sea Ltd, JOYY, EQS Group AG, Alphabet Inc, Amazon.com Inc, Taiwan Semiconductor (TSMC) – ADR, T Mobile Us Inc and more

• We estimate SEA’s 4Q22 revenue to be largely in line with cons., while non-GAAP net loss to be narrower than cons. 
• We see SEA to continue to experience challenges in top-line growth because of inflation, competition with TikTok, and weak performance of Free Fire. Yet, the losses will be better managed.
• We slightly raise SE’s TP by 6% to US$55 to reflect 4Q22’s margin beat, yet maintain SELL because of the mid-to-long-term challenges.

• We estimate JOYY’s 4Q22 top line/bottom line to miss cons. by (3%)/(12%), as TikTok’s influence in major market expands. 
• We suggest that a much slower recovery in 1Q23 does not bode well for its full year outlook. Our top line and bottom line are (2%)/(14%) lower than cons.
• Maintain SELL and cut TP to US$25.1, implying 12.8X PE in 2023.

EQS has issued a year-end trading update, showing that it achieved its targets for number of new customers and for annually recurring revenues. However, the continuing delays to the full implementation of the whistleblowing legislation in the key German market mean that the group has missed its previously published targets for revenue and for EBITDA by €1.5m and €1.3m respectively. Guidance for FY23 now reflects an abundance of caution on the likely timing of the legislative stimulus, assuming that the law is not transposed until Q323. Our new forecasts align with the lower end of the guided range for now. Despite the delays, the shares continue to trade well below the level indicated by the DCF.

• Alphabet is going through a tough period.
• The company’s stock is losing value given the expected impact of the popularity of ChatGPT on its Search revenues.
• We downgrade the stock of Alphabet and give it a ‘Hold’ rating with a revised target price.

• Amazon delivered a mixed result as its worldwide net sales grew by 12% year over year which was above the expectation of Wall Street.
• The company worked hard to secure millions of deals and offer low prices for customers this quarter, including its foremost Prime Early Access Sale and the Thanksgiving.
• In the quarter, Amazon customers spent more on everyday essentials and shifted to lower-priced and value brands in electronics.

• On 7 November 2022 we published a bullish TSS / tactical recommendation in TSM US. It was trading at 62.49. TSM US rallied 13.4% in 3 days. 
• On 15 February 2023 TSM US peaked at a new Q4/Q1 uptrend high of 98.99 amid similar extreme ST momentum failure and quickly reversed.
• Our TSS methodology triggered a TSS < 10 at the high and justifies a further 8-10% decline in the coming 1-2 weeks.

• T-Mobile has recently been in the news for suffering from a major network outage affecting around 83,000 customers.
• T-Mobile added many new customers but the company ended Q4 on a mixed note.
• Their financial results also enabled them to launch share repurchases earlier than anticipated and speed up network rollouts.