In today’s briefing:
- China: Huge ETF Inflows & Impact on Stocks
- VNG: Potential US Listing with the First Vietnamese “VIE” Structure
- NVIDIA. Revenue On Track For 2.7x YoY Growth in Q3’CY23
- EQT/SUSE: Terms and Spread
- New Relic Takeover Valuation Analysis: The Buyout Price Looks Reasonable
- Paycom Software Inc.: Sustaining High Margins Amidst Rapid Expansion! – Major Drivers
- Pinterest Inc.: Embracing Challenges and Emerging as a Dominant Force in Digital Landscape! – Major Drivers
- The BlackBerry Buyout Buzz: Is This Tech Veteran The Next M&A Goldmine? – Key Drivers
- Comms Group Limited – Growth While Continuing to Invest Globally
China: Huge ETF Inflows & Impact on Stocks
- Nearly US$20bn has flowed into mainland China listed ETFs since 18 July and could be driven by the National Team supporting the market.
- Most of the inflows have been focused on large cap indices including CSI 300, STAR50, CSI 500, SSE50, ChiNext and other sectoral and thematic ETFs.
- The largest impact has been on the SSE STAR50 (STAR50 INDEX) constituents, but that has not stopped the slide in the stocks.
VNG: Potential US Listing with the First Vietnamese “VIE” Structure
- Vietnam’s tech giant, VNG, filed for US listing last week (valuation TBC).
- Given the country’s current foreign ownership restriction, the listing will be done via an offshore entity that effectively controls the company through contractual agreements.
- Investors should be aware of the risk, esp. after previous market concerns surrounding Chinese tech companies’ VIE structure.
NVIDIA. Revenue On Track For 2.7x YoY Growth in Q3’CY23
- NVIDIA Q2’CY23 revenues of $13.51 billion, up 88% QoQ, up 101% YoY, blowing way past the $11 billion guidance midpoint.
- Current quarter revenue is expected to be $16.00 billion. This will be a roughly 2.7x increase YoY
- Are we in the middle of witnessing a bubble of dot.com era proportions?
EQT/SUSE: Terms and Spread
- EQT offers €16/share to delist SUSE (SUSE GR) (split into consideration and interim dividend) and merge it into a Luxembourg SA. On 24 August, EQT published the offer document.
- There will be no squeeze-out. The multiples offered (4.8x EV/NTM Fwd Revenue, 14x EV/Fwd NTM EBITDA, source: IBES) are generally consistent with European software companies.
- With the stock trading at a 3% gross spread, I see limited upside from here and no interloper risk. Annualised spread is 33.4%. Long and tender.
New Relic Takeover Valuation Analysis: The Buyout Price Looks Reasonable
- Following takeover rumors surrounding New Relic Inc (NEWR US) , private equity firms finally agreed to acquire a US-based low-cost observability provider for ~$6.5B.
- American private equity firm Francisco Partners and global alternative asset manager TPG offered $87 per New Relic Inc (NEWR US) share in an all-cash transaction.
- The New Relic Inc (NEWR US) Board of Directors approved the buyout deal, and is expected to close in late 2023 or early 2024.
Paycom Software Inc.: Sustaining High Margins Amidst Rapid Expansion! – Major Drivers
- Paycom Software managed to exceed analyst expectations in terms of revenue and earnings.
- The company’s initiative to simplify clients’ experiences was evident by introducing tools like Everyday and the Client Action Center.
- As Paycom continues to execute its strategies and capitalize on its expanding market opportunities, its potential for sustained success remains promising.
Pinterest Inc.: Embracing Challenges and Emerging as a Dominant Force in Digital Landscape! – Major Drivers
- Pinterest delivered an all-around beat in the most recent quarterly result.
- The company’s strategic focus on core differentiators and visual discovery led to increased user engagement and expansion of the user base.
- Despite challenges in the advertising environment, Pinterest achieved consistent year-on-year revenue growth and margin expansion.
The BlackBerry Buyout Buzz: Is This Tech Veteran The Next M&A Goldmine? – Key Drivers
- Amidst whispers of significant financial moves, BlackBerry Ltd, the erstwhile leader in business mobile technology, has become a focal point for Veritas Capital, a major private equity player.
- This frenzy was not entirely unpredictable; BlackBerry had hinted at major strategic shifts in May, even suggesting possible diversification of its business segments.
- The company, once synonymous with smartphones, ceased its phone production and even pondered over selling its iconic mobile patents.
Comms Group Limited – Growth While Continuing to Invest Globally
- Comms Group Ltd (ASX:CCG) has reported FY23 earnings and provided a more detailed and narrower range for both revenue and EBITDA guidance in FY24.
- The result was largely in-line with expectations and with guidance already provided.
- Revenue increased 27% and adjusted EBITDA ~17% as the onPlatinum acquisition contributed for a full 12-months and investment was made in the Global business for future growth.
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