Daily Brief TMT/Internet: Tencent, Sea , Blackbuck, ARM Holdings, Hon Hai Precision Industry, Silergy Corp, Nexon, Vontier Corp, Western Digital, Tokyo Electron and more

• In 3Q24, game revenue increased by 13% YoY, higher than our estimate, 9% YoY.
• The gross margins of all business lines improve in 3Q24, especially “others”.
• We set the upside at 50% and the price target at HK$605 for the end of 2025. Buy.

• Sea (SE US) ‘s management expects all three business segments – ecommerce, financial services and entertainment – to deliver high growth and profitability in 2025, supported by strong macro-eceonomic tailwind.
• It’s GAAP revenue was US$4.3 billion, up 30.8% year-on-year and net income was US$153.3 million, as compared to total net loss of US$(144.0) million for 3Q2023.
• Its e-commerce business achieved positive adjusted EBITDA in 3Q 2024 in both Asia markets and Brazil.

• Blackbuck (1355652D IN) is looking to raise around US$130m in its India IPO.
• Zinka Logistics (Blackbuck) is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators transacting on its platform in FY24, as per Redseer.
• In this note, we talk about the company’s historical performance.

• ARM reported good numbers with steady guidance for the coming quarter.
• Qualcomm’s earnings performed well, but concerns exist over rising costs and potential loss of customers.
• Uncertainty surrounds US government policies on semiconductor manufacturing and trade with China, impacting industry players like Intel and Nvidia.

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• Foxconn’s reforms at Sharp result in significant profit growth in 2Q24.
• Taiwan supply chains brace for impact of Trump’s imminent global tariffs.
• Apple to boost iPhone production in India following Trump victory, taking advantage of evolving global trade dynamics.

• In the 3rd quarter of 2024, revenue was NT$4,284 million, the gross margin (GM) was 55%, the operating profit margin (OPM) was 24%, and the net margin was 15%.  
• The Gen-4 product line is ramping up and is expected to contribute around 4% of total revenue by the end of 2025. 
• Chinese current economic stimulus programs may impact demand in the Consumer segment.  

• Nexon’s 3Q24 earnings report saw its stock dip -17% as revenue missed guidance and foreign exchange losses weighed on the bottom line.
• Nexon’s operating profit rose +11% y/y to ¥51 billion, with an operating margin of 38%
• The stock is trading at 8.5x EBITDA, which makes it very attractive versus the sector

• Vontier Corporation delivered a strong performance in the third quarter of 2024, with notable achievements in sales growth and operational improvements.
• The company reported a 3% increase in core sales, exceeding the high end of their guidance range, indicative of robust momentum across their convenience retail and fueling end markets.
• This success was bolstered by the increased adoption of their market-leading technologies, particularly in the Environmental & Fueling and Mobility Technologies segments.

• Peloton’s earnings for the first quarter of fiscal 2025 demonstrate a balanced perspective of challenges and opportunities as the company maneuvers through a critical phase marked by leadership transitions and strategic realignment.
• The announcement that Peter Stern will assume the role of CEO and President starting January 1, 2025, heralds a potentially transformative phase for Peloton.
• Peter Stern brings substantial experience from previous roles at major corporations, likely setting a strong foundation for leadership and strategic direction.

• In 1H FY03/25, the company reported revenue of JPY1.12tn, operating profit of JPY313.9bn, and net income of JPY243.9bn.
• The revised full-year forecast for FY03/25 includes revenue of JPY2.40tn and operating profit of JPY680.0bn.
• The company announced a JPY70.0bn share buyback plan, acquiring up to 3.5mn shares, representing 0.8% of outstanding shares.