In today’s briefing:
- STAR CM (6698 HK): Grave Accusations
- Telkom Indonesia (TLKM IJ) – Ring My Digital Bell
- Taiwan Tech Weekly: New Huawei Phone Works Around U.S. Restrictions?; Taiwan AI Stocks Surging Again
- Taiwan Dual Listings Monitor: TSMC, ASE Technology, and ChipMOS Opportunities
- Yageo: Company Visit — Improving Revenue Quality & Cashed-Up Actively Looking For Acquisitions
- VNG IPO: Scaling Up
- Keep (3650): Mixed H123 and Slow Post-Pandemic Recovery. Will Growth Story Come To an End?
- GS AM Consortium/ Kahoot!: Extension of Acceptance Period, Spread
- Elan Microelectronics: Positioned to Win from PC Upgrade Cycle; Massively Underheld by Institutions
- Antler Joins SaaS Insurtech Platform CHOYS’s US$1.1M Seed Round
STAR CM (6698 HK): Grave Accusations
- STAR CM Holdings (6698 HK), a variety program intellectual property creator and operator, was listed last December and promptly gained 475% by early August. All good so far.
- Shares cratered on the 18 August (-23.4%) and are currently 76% adrift from its recent high. The reason? A viral clip from late pop diva Coco Lee discussing unfair treatment.
- The music competition show, in which Coco appeared, pushed back on any impropriety; however, its broadcaster has temporarily suspended the program. This is no easy fix.
Telkom Indonesia (TLKM IJ) – Ring My Digital Bell
- Telkom Indonesia (TLKM IJ)‘s 1H2023 results looked solid but drilling down 2Q2023 looked a lot more encouraging in terms of growth and higher ARPUs for Telkomsel.
- Ongoing digital initiatives are yielding positive results and Indihome continues to register positive results, with its merger with Telkomsel underlining convergence strategy. Data centre consolidation looks like a future spin-off.
- Telkom continues to enrich its digital ecosystem with services and make it more accessible to less affluent subscribers. Valuations remain attractive at less than 5.0x forward EV/EBITDA
Taiwan Tech Weekly: New Huawei Phone Works Around U.S. Restrictions?; Taiwan AI Stocks Surging Again
- Huawei’s new Mate 60 Pro phone has made many wonder if it has worked around U.S. technology restrictions to produce a 5G-capable chip domestically.
- Nvidia hits new all-time highs… Taiwan AI-supply chain stocks are surging again.
- Dell will report earnings — Look for PC upgrade cycle color and AI PC comments. SEMICON Taiwan is coming soon, we will attend.
Taiwan Dual Listings Monitor: TSMC, ASE Technology, and ChipMOS Opportunities
- TSMC: 9.2% premium — Trending down, can consider shorting the ADR vs. the local.
- ASE: 10.5% premium is historically high — Short the ADR vs. the local.
- ChipMOS: -0.4% discount, ADRs have lagged Taiwan shares — Long ADR vs. local.
Yageo: Company Visit — Improving Revenue Quality & Cashed-Up Actively Looking For Acquisitions
- We visited Yageo’s headquarters to learn more about the business and strategy. We expect revenue quality to improve, margins to rise through 2025E, and possible accretive acquisitions.
- The company is a heavily shorted stock based on our short model — This implies short squeeze potential we believe. The company has over US$1.5bn of dry powder for acquisitions.
- We rate Yageo as a Structural Long with a NT$690 target price. Potential upside catalysts outnumber downside catalysts in our view.
VNG IPO: Scaling Up
- Vietnamese tech start-up VNG (VinaGame) (VNG US) has filed for an IPO in the US and according to news media outlets, the company plans to raise proceeds of around US$300-400m.
- VNG’s business model resembles that of China’s Tencent (700 HK) with games accounting for most of VNG’s revenues. Other business segments are in early stages of monetisation.
- Our analysis suggests that VNG’s businesses have strong potential and the company could further reduce its operating losses with scale and further financial discipline.
Keep (3650): Mixed H123 and Slow Post-Pandemic Recovery. Will Growth Story Come To an End?
- Keep Inc (3650 HK) , the largest online fitness platform in China, announced interim results for the six months ended Jun-23. The overall revenue growth is slowing down.
- The company completed its Hong Kong IPO of ~10.8M shares at HK$28.92 (bottom of the range) and raised ~HK$192M (~$25M) of net proceeds. CICC led the offering.
- Keep appears well capitalized to outperform despite China’s temporary slowdown in fitness activities. I remain cautious on Keep stock after a downsized IPO, but I like the long-term fitness story.
GS AM Consortium/ Kahoot!: Extension of Acceptance Period, Spread
- It may take some time before shareholders can see how Kahoot’s significant investments in market share and business growth pay off in a positive bottom line.
- GS AM already has c.59% and the current extension lasts until 8 September. Spread is 2.9%/15.4% (gross/annualised, assuming settlement by 13 November).
- Taking a NOK 31.2 break, the last closing share price implies just 74% probability of deal completion, however I believe the spread will close following. I’d be long the shares.
Elan Microelectronics: Positioned to Win from PC Upgrade Cycle; Massively Underheld by Institutions
- Elan is positioned to win from a coming PC upgrade cycle, which has been indicated by companies such as Micron, Microsoft, Intel, and Asustek among others.
- Elan is one of the institutionally most-underheld shares in our universe based on our analysis. Windows 11 adoption has been rising and will accelerate with a PC upgrade cycle.
- We’ve updated our Elan model, we continue to rate the shares Outperform and have a NT$142 target price. Moreover, the stock’s past all time remains 65% above current share price.
Antler Joins SaaS Insurtech Platform CHOYS’s US$1.1M Seed Round
- CHOYS, a SaaS insurtech platform for corporate employees in Southeast Asia, has closed a US$1.1 million seed funding round with investors, including Wing Vasiksiri, Foremast, Antler, and Fintech Nation Fund.
- The company will use the money for its go-to-market strategy across Southeast Asia and to bolster its product development initiatives.
- Founded by Sharon Li and Vanessa Chen, CHOYS aims to make work life more meaningful and humanised.
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