Daily Brief TMT/Internet: Taiwan Semiconductor (TSMC) – ADR, Mobvoi, Elastic NV, Coinbase, Acal PLC, ROBLOX , Twilio Inc and more

• TSMC (ADR) upside gap out of the bull wedge shows conviction to test the 2021 old high zone. Wedge breakouts have a high conviction rate.
• Price and RSI pattern breakouts show fresh buy support in the gap zone. Buy volumes are constructive as is backswing support.
• Near term dip risk stems from a stall in the US tech sector (RSI stall zone). Intermediate cycle is compelling.

• Google-backed Chinese artificial intelligence company Mobvoi Inc. filed Tuesday for an initial public offering on the Hong Kong Stock Exchange.
• The Beijing-based startup, valued at $756 million in its last round of fundraising three years ago, didn’t disclose the size of the IPO.
• Bloomberg reported that the company aims to raise $200 million to $300 million, citing people familiar with the matter.

• Elastic NV (ESTC US) reported a solid 4QFY23, reflecting a stronger-than-expected non-GAAP operating margin of ~9% and GAAP subscription gross margin of ~79%. 
• Elastic cloud revenue grew 28% y/y, representing 40% of total revenue. Elastic cloud is scaling well, and margins improved faster-than-anticipated. 
• We are concerned about slowing H1 FY24 y/y growth in total revenue and failure to achieve the $2B revenue mark in FY25. Price target to $112.

• Coinbase lost 16% of its value after the SEC announced a lawsuit against the company.
• The lawsuit comes 24 hours after a similar action against rival exchange Binance, which saw $780 million in outflows.
• Coinbase may continue to make quarterly losses due to market uncertainty, loss of deposits and potential SEC fines.

For FY23, discoverIE reported double-digit organic revenue growth, operating margin expansion to 11.5% and strong free cash generation. On track to meet its FY25 operating margin target of 13.5%, the company has set a more testing target of 15% by FY28. We have upgraded our forecasts, which reflect more modest revenue growth than in FY23 as the order book normalises and continued operating margin expansion, and we expect further M&A activity to boost growth and profitability.

• Roblox delivered a mixed result in the recent quarter, with revenues above market expectations, but it failed to surpass the analyst consensus in terms of earnings.
• They achieved positive cash flow and generated substantial free cash during the quarter.
• 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.

• Twilio delivered an all-around beat in the previous quarter.
• It was a challenging quarter as the company navigated through changes and headwinds in a demanding macro environment.
• The management acknowledged the moderation in consumer-facing usage patterns and the impact of lapping peak crypto usage from the previous year.