Daily Brief TMT/Internet: SK Telecom, Alibaba (ADR), Pushpay Holdings, Nitro Software Ltd, Kuaishou Technology, Chicony Electronics, CATL (A), Lenovo, Transcelestial Technologies and more

• Looking at the recent pattern, SKT’s fast-rising is quite noticeable. Its foreign room rose to 12.08%. On the other hand, KT’s foreign room growth seems to be slowing somewhat.
• SKT’s pace is fast. If the current pace continues, there will be even the possibility of inclusion with a full adjustment factor of 1.0, exceeding 25%, by the August review. 
• We should design a momentum trading setup targeting the point when SKT’s foreign room decline trend will be reflected into an MSCI re-inclusion momentum.

• Alibaba Group (9988 HK)‘s 3QFY23 results scheduled to release this Thursday is yet again going to be somewhat disappointing with our analysis indicating around RMB35.0bn OP cf. RMB49.7bn in 3QFY21.
• Nevertheless, 3QFY23 results could beat the conservative consensus revenue estimate by 2.8% while the OP is likely to be in line with consensus.
• Having risen 100%+ in few months, a small beat is unlikely to drive-up the share price any longer. Renewed US-China tensions are likely going to be a much bigger driver.

• The Scheme Meeting for BGH/Sixth Street’s NZ$1.34/share Offer for church donor management play Pushpay Holdings (PPH NZ) will take place on the 3 March.
• Accident Compensation Corporation (ACC), holding 6.2% of shares out, said it will vote against the Scheme. Nikko Asset Management (1.4%) also said they will reject the Offer. 
• Shares have wobbled and are now 5.5% adrift of terms. BGH/Sixth Street still has the flexibility to bump.

• Alludo has declared its Offer of A$2.15 cash per Nitro Software Ltd (NTO AU) share free from all remaining conditions.
• Separately, Potentia’s due diligence is expected to conclude tomorrow, the 22 February, with the expectation it bumps its current offer of A$2.00/share.
• Currently trading at A$2.20 per share suggesting limited upside from here. 

• Shareholders representing around 12.6% of outstanding shares have stated that they will vote against Pushpay Holdings (PPH NZ)’s NZ$1.34 offer from Sixth Street/BGH (scheme vote on 3 March). 
• The NO votes will need a less than 63% turnout to block the scheme. A 5% bump (NZ$1.41) would be in line with the IE’s valuation mid-point at current FX.
• Sixth Street/BGH have taken issue with the IE’s valuation (unsuitable FX rates and optimistic forecasts) and have got proxy advisors’ support. Therefore, a bump is not a sure thing. 

• Kuaishou Technology (1024 HK) will report 4Q2022 and full-year results on 23rd March 2023.
• The company’s livestreaming revenues have made significant progress since 4Q2021 while its domestic business reported an operating profit for the first time in 3Q2022.
• Though the company’s share price has not moved up yet, we think there is further upside to the current share price driven by improved earnings.

• The index constituent weights of the TWSE Div+ Index will be capped during the upcoming March 2023 Index quarterly index review. 
• Previously, it looked like there were going to be no flows. However, now my expectations have changed, as of Monday’s close (they weren’t going to change as of Friday).
• In this insight, we take a look at Quiddity’s expectations for index flows resulting from these events. 

• Contemporary Amperex Technology Co. Ltd. (CATL), the world’s largest electric-vehicle (EV) battery-maker, is in talks to offer automakers steeply discounted prices in exchange for sourcing the vast bulk of their power cells from the company in a bid to stave off growing competition from smaller rivals, Caixin has learned.
• If the plan goes ahead, CATL will sell the strategic clients EV batteries made from self-manufactured lithium carbonate at a low price.
• In return, they will be required to sign a contract committing them to buy 80% of their EV batteries from CATL over the next three years, a person close to the company told Caixin on Sunday.

Lenovo has posted weak Q3/22-23 results. Revenue dropped 24% y-o-y to USD 15.3 bn, with gross profit down 22% at USD 2.6 bn and operating profit declining 20% to USD 750 mn. Net profit fell 32% to USD 437 mn. Positively, liquidity remains sound, with over USD 5 bn of cash and USD 20 bn of undrawn credit facilities. OCF stayed positive at USD 74 mn.

• Singapore-headquartered last-mile internet connectivity startup Transcelestial Technologies has received US$10 million in a Series A extension round.
• Existing investor Airbus Ventures led the round, with participation from Kickstart Ventures, Genesis Alternative Ventures, Wavemaker, Cap Vista, and SEEDS Captial. In-Q-Tel had also joined in a previous undisclosed round.
• The new round brings Transcelestial’s total investment raised to date to US$24 million.