Daily Brief TMT/Internet: Sfa Engineering, Baidu, NVIDIA Corp, Epam Systems and more

• After the market close on 27 February, Samsung Display announced that it will sell its 4.95% stake in Sfa Engineering (056190 KS) in a block deal sale. 
• We would take the trade. We like the relatively large block deal sale discount as well as the company’s attractive valuations. 
• SFA Engineering is trading at P/E of 8.3x, EV/EBITDA of 2.7x, and P/B of 0.7x in 2024, which are much lower than historical valuations.

• We expect Baidu to report C4Q23 revenue, GAAP op. profit and GAAP net income inline, (2.3%) and (4.5%) vs. consensus.
• The slight bottom-line miss was mainly attribute to the increased marketing costs related to user acquisition. Baidu cloud revenue is robust due to AI product stimulating demand. 
• We cut our target price to US$146 for the spendings related to the construction of future e-commerce business but maintain BUY for its cheap valuation.

• Nvidia emerges as a strong challenger in the semiconductor industry, while intel remains the dominant player
• Intel makes significant strides in its foundry business, showcasing a clear focus on advanced nodes like 18A and 14A
• Intel positions itself as a serious player in the foundry market, attracting key customers like Microsoft and building a strong ecosystem around its offerings

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• EPAM Systems had a challenging year in 2023 due to geopolitical factors – Russian invasion of Ukraine – which led to disruption and a rebalancing of their delivery platform across Europe, Western and Central Asia, India, and Latin America.
• Despite these external disturbances, EPAM managed to perform creditably, underlining its ability to navigate a volatile demand environment.
• EPAM’s activities in 2023 were largely focused on enhancing delivery quality, optimizing cost effectiveness, and leveraging their technological capabilities to tap into the future opportunities in Gen AI and AI. Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.