Daily Brief TMT/Internet: Tencent, Jeio, Com2us Corp, Delta Electronics Thai, Meta Platforms (Facebook), Advanced Micro Devices, Immersion Corporation, Ubiquiti Inc., Light Science Technologies Holdings and more

• WeChat Usage increased by 23% YoY in physical store during Chinese New Year holidays.
• JD.com will close its e-commerce platforms in Indonesia and Thailand in March.
• Microsoft denies a layoff plan in China, but the details of the plan are spreading.

• Jeio (418550 KS) announced its IPO price of 13,000 won, which was at the high end of the recently revised down IPO price range of 10,000 won to 13,000 won.
• There were 1,174 institutional investors that participated in this IPO survey. The demand ratio was 352.6 to 1.
• Our base case valuation of JEIO is target price of 12,575 won per share, which is 3.3% lower than the IPO price 13,000 won.

• Com2us Corp (078340 KS) is the most likely corporate activist target in Korea’s game industry.
• Our base case valuation of Com2uS suggests a target price of 97,321 won which is 49% higher than current price.
• Finally, the company is expected to launch at least 3-4 promising new games this year. All in all, we have a positive view of Com2uS Corp. 

• Delta Electronics Thai (DELTA TB) is now the largest stock in Thailand by market cap. The recent SET50 INDEX inclusion has set the stock on fire.
• The Delta Electronics Thai (DELTA TB) / Delta Electronics (2308 TT) spread is very wide now, but still well within the historical highs.
• We’d put on a placeholder position and monitor the spread for an entry once there is a clearer indication of a reversal in the spread.

• Meta announced its Q4 earnings, exceeding expectations on the top line by 1.5%, but falling short on the bottom line by 20.8%.
• The key highlights from the announcement included an increase in share buybacks, reductions in capital expenditures, and a lowered outlook for operating expenses.
• Since the release of new earnings by Meta (NASDAQ:META), we have been following up on our last report, which got a very positive response.

• AMD had a strong quarter and managed an all-around beat despite the fact that the company navigated quite a challenging macro environment.
• The company also launched the Ryzen 7000 mobile APUs, RX 7000 laptop GPUs, and V-cache chips.
• For the company’s Xilinx data center as well as networking products, AMD had strong sales in the quarter.

• We are initiating coverage of Immersion (IMMR) with a Buy Rating and $11 target
• IMMR is a haptics technology developer that has undergone a management change that could further result in a series of material developments
• IMMR naming Eric Singer as its CEO suggests there is more to come from IMMR than the cost cuts IMMR undertook two years ago when Mr. Singer joined the Board

• Ubiquiti (UI) reported fiscal second quarter (December) results affirming our expectations of the enterprise segment being the source of growth
• Ubiquiti has introduced several new products lines over the past two years, which we believe are becoming an important part of the revenue story
• The product mix and reduced shipping costs resulted in Ubiquiti reporting gross margin of 40 percent. This is the first time in four quarters gross margin reached 40 percent

In December, Light Science Technologies Holdings (LSTH) noted that high input costs have resulted in strong interest in the group’s controlled environment agriculture (CEA) products because they help growers operate more efficiently. This demand has generated a sales pipeline for the group of quoted work worth more than £60m (as of December 2022), including forward orders and contracts of £18m (contingent on meeting certain milestones). However, high input costs have caused growers to defer capital investment decisions, resulting in longer sales cycles. This has adversely affected FY22 trading because some anticipated revenue streams for the CEA division are now more likely to materialise in FY23 rather than FY22. Based on this information, we are introducing estimates for FY22 and FY23.