In today’s briefing:
- Tencent (700 HK): 1Q24 Preview, EPS Up by 40%, But Upside Narrowed by Significant Price Rise
- ASMedia GDR Early Look – Momentum Has Been Strong, and Raising Would Grow Its Cash Base Almost 6x
- Tech Supply Chain Tracker (06-May-2024): Samsung SDI boosts investment despite weak 1Q24.
- STAR50 Index Rebalance Preview: Adds Steamroll Deletes
- STAR100 Index Rebalance Preview: Potential Adds Continue to Push Higher
- EQT to Acquire Perficient for $3.0 Billion
- Atlassian Corporation: Will The New Sole CEO Help Take The Company Towards A New Growth Trajectory?
- Juniper Networks: What Is The AI Cluster Opportunity With Ethernet Adoption! – Major Drivers
- Check Point Software Technologies: Potential Opportunities with NVIDIA AI Infrastructure & 5 Critical Growth Drivers
- Western Digital Corporation: A Growing Customer Base in Enterprise SSD Space & 5 Major Growth Drivers
Tencent (700 HK): 1Q24 Preview, EPS Up by 40%, But Upside Narrowed by Significant Price Rise
- We believe total revenue will grow by 7% YoY in 1Q24 and faster in the remaining three quarters of 2024.
- We believe EPS will grow by 41% to HK$3.80, which is higher than the market consensus.
- The stock has risen by 26% since our last Buy rating, but there is still an upside of 9% till the end of 2024.
ASMedia GDR Early Look – Momentum Has Been Strong, and Raising Would Grow Its Cash Base Almost 6x
- Asmedia Technology (5269 TT) is looking to raise up to US$333m in its upcoming global depository receipts (GDRs) offering.
- ASMedia recently announced its board’s resolution to offer between 4.3-5.3m shares in the form of GDRs, with the proceeds geared towards purchasing raw materials and machinery, R&D and working capital.
- Similar to previous GDR listings, the deal is a long drawn out process with the firm required to jump through a number of board/shareholder/regulatory approval loops.
Tech Supply Chain Tracker (06-May-2024): Samsung SDI boosts investment despite weak 1Q24.
- Samsung SDI exhibits confidence in future growth and innovation by increasing investments despite weak 1Q24 results.
- UnaBiz boosts Sigfox 0G Technology by reducing device energy usage by up to 18 times, enhancing efficiency.
- Sharp considers establishing a display plant in India, potentially boosting the country’s electronics manufacturing sector.
STAR50 Index Rebalance Preview: Adds Steamroll Deletes
- With the review period complete, we forecast 3 changes for the SSE STAR50 (STAR50 INDEX) in June. All changes are migrations from/to the STAR 100 Index.
- One way turnover is estimated at 3.4% resulting in a one-way trade of CNY 4.5bn (US$630m). There is a lot to trade from passive trackers, especially on the inclusions.
- The potential adds have outperformed the potential deletions by ~18% over the last month with Hangzhou EZVIZ Network (688475 CH) and APT Medical (688617 CH) moving higher.
STAR100 Index Rebalance Preview: Potential Adds Continue to Push Higher
- The review period for the June rebalance ended 30 April. We expect the changes to be announced 31 May with the implementation taking place after the close on 14 June.
- We forecast 9 changes for the index, including migrations between the STAR 100 Index and the SSE STAR50 (STAR50 INDEX).
- The outright inclusions have outperformed the outright deletions by 9% over the last month and by 20% over the last 3 months.
EQT to Acquire Perficient for $3.0 Billion
- Perficient Inc (PRFT US) agreed to be acquired by EQT, for $76/share in cash, 75% premium, 51% premium to 30-day VWAP, and c. $3 billion EV.
- I understand EQT has opted to present an offer that the Board could not refuse, on both EV/Fwd EBITDA and Fwd P/E basis.
- Spread is 3.6%/6.2% (gross/annualised, assuming settlement by 16 December). Long.
Atlassian Corporation: Will The New Sole CEO Help Take The Company Towards A New Growth Trajectory?
- Atlassian Corporation Plc, leading software and services provider, recently marked their Q3 of Fiscal Year 2024 earnings call, reporting significant growth in their Cloud customer base and paid seats, among other financial milestones.
- However, they also made the announcement of the stepping down of co-CEO, Scott Farquhar, by August 31, 2024.
- The growth in the Cloud customer base was highlighted as a result of the winding down of support for Server operations three and a half years ago, which yielded three times the increase in paid seats in the Cloud.
Juniper Networks: What Is The AI Cluster Opportunity With Ethernet Adoption! – Major Drivers
- The Q3 2023 results released by Juniper Networks, Inc. showed a better-than-expected performance with significant profitability.
- Even in a challenging macro environment, the company was able to achieve total revenue of $1.398 billion and non-GAAP earnings per share of $0.60.
- The company anticipates that it will continue to perform well due to the increasing demands from customers for AIOps and software automation tools, which aim to improve network operations and reduce overhead costs.
Check Point Software Technologies: Potential Opportunities with NVIDIA AI Infrastructure & 5 Critical Growth Drivers
- The Q1 2022 earnings reveal insights into the performance of Check Point Software Technologies.
- The company made some forward-looking statements related to its fiscal year 2022.
- Golan reported that its earnings per share (EPS) for the first quarter grew by 13% year-on-year to reach $2.04, with a net income of $235 million marking an 8% increase year over year.
Western Digital Corporation: A Growing Customer Base in Enterprise SSD Space & 5 Major Growth Drivers
- Western Digital performed exceptionally well in the third quarter of the fiscal year 2024, with revenue of $3.5 billion, a non-GAAP gross margin of 29.3%, and non-GAAP earnings per share of $0.63, surpassing market expectations.
- The company’s performance was bolstered by a diversified portfolio spanning multiple end markets, coupled with structural changes to its businesses enhancing its earning potential and ability to minimize business cycles.
- It was also able to leverage a constrained supply environment for higher earnings per share.
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