Daily Brief TMT/Internet: SK Telecom, LG Uplus Corp, Sea , NVIDIA Corp, Twitter Inc, LG Energy Solution, SoftwareONE Holding, AAC Technologies Holdings, Meta Platforms (Facebook), Verizon Communications and more

• On 27 July, SK Telecom announced a sizeable share buyback worth 300 billion won (including shares cancellation of 200 billion won) and quarterly dividend of 181 billion won. 
• SK Telecom will pay a quarterly DPS of 830 won, which represents 1.8% of its current price of 45,900 won. 
• SK Telecom is trying to boost its share price which has been negatively impacted by the regulators’ pressure to cut telecom tariff rates and also increase competition. 

• The chances of SKT’s inclusion in the August MSCI Review seem slim. SKT narrowly missed meeting the 15% threshold on both Day 1 and Day 2 during this review.
• SK Telecom’s buyback completion can be accelerated to align with the MSCI November Review period, just like the previous case of KT Corp back in April.
• The estimated size of passive funds flowing into SKT is approximately ₩160 billion, which is expected to be around 5.5 times the average daily trading volume (ADTV).

• We expect Shopee’s competitive landscape deteriorated in 2Q23, due to increased pressure from TikTok/Lazada in ASEAN, Coupang in Taiwan, and Shein in Brazil. Temu is a large swing factor.
• Shopee has been pushing live streaming and its full-management (or consignment) mode. In our view, these will drag down its profit margins and may not be effective in gaining share.
• We estimate 2Q23 revenue and non-GAAP net income are 2.5% and (24%) vs cons. We have revised down Shopee’s growth expectations for the next 3 years.

• Google, Microsoft, and Facebook reported earnings.
• Let’s discuss their capex plans and what that means for our new data center champion, Nvidia.
• I think it’s pretty straightforward that Nvidia has revenue beats for the foreseeable future.

• Elon Musk has killed Twitter’s last and greatest value by renaming it X. As in, fill in whatever the heck it is now. 
• Twitter’s strong, globally recognized brand worth had been worth much as $20 billion—its last and only valuable asset.
• Incredibly, it gets worse. Hundreds of other companies already own rights to the X name and logo—including META and Microsoft. 

• LGES provided a lower sales guidance in 3Q 2023 due to slower sales in Europe. LGES expects its sales in 3Q 2023 to decline in a QoQ basis.
• The share prices of the top 12 rechargeable battery names in Korea are down on average 13.9% in the past two trading days.
• We believe that the overall sentiment on the rechargeable battery sector in Korea has started to turn sour which could have a further negative impact on companies such as LGES. 

• The board of SoftwareONE Holding (SWON SW) rejected on 24 July a revised CHF 19.50-20.50 offer from Bain Capital and said it began a strategic review to seek the best value.
• CHF 19.5 represents a 40% premium, Gross spread to the low point of the range is 4.2%. 0x EV/NTM EBITDA and 19.5 Fwd P/E.
• This could trigger upwards revisions and would justify the Board asking for a higher offer. I’d hold on to the shares as Bain Capital could increase the offer a bit.

The Asia HY Trade Book for July 2023 includes a summary of our recommendations, as well as our high-conviction ideas. The report also features relative-value charts and lists of the bonds across Asia (ex-Japan) HY and crossover credits.

• Facebook exceeded 3 Bn MAU for the first time, and MAP is now approaching 4 Bn.
• DAU/MAU engagement looks steady across all regions.
• While ARPU exhibited considerable strength, please note the material weakness in YoY comparison.

• Verizon’s share price continues to fall amid speculations and low interest in slow-growth businesses.
• The business is stabilizing and on-track to deliver much needed top and bottom line growth, according to the company.
• No matter how you look at it, being bullish on Verizon Communications Inc. (NYSE:VZ) takes a real contrarian view with ability to endure pain and keep a long-term focus.