In today’s briefing:
- Toyo Tecnica (8151) – BIG Buyback
- Tencent (700 HK) Pre-Earnings: Still to Be Slow in 2Q22, But Price Overly Impacted
- Taiwan Dual-Listings – TSMC Premium Decline Could Highlight Foreign Vs. Domestic Sentiment Mismatch
- The Launch of Apple Pay Is Likely to Result in Market Share Losses for Kakao Pay
- Kuaishou Dives Into Cloud Services and Chipmaking
- HSI Index: Longfor, Alibaba, Ping An, and Tencent
- Confident In Growth Opportunities. Weak Q3FY22 Billings Guidance Does Not Change Our Bullish Thesis
Toyo Tecnica (8151) – BIG Buyback
- Toyo Corp (8151 JP) is a smallcap electronics firm specialising in sensors/testers/loggers for industrial and data system processes, large scale antennae systems, high tech medical equipment, remote sensing equipment, etc.
- They have seen their (extraordinarily seasonal) revenues go mostly nowhere over the past ten years, but they have, until recently, accumulated cash and securities.
- On 10 August, the company announced a LARGE buyback of up to 8.44% of shares out. The details suggest
Tencent (700 HK) Pre-Earnings: Still to Be Slow in 2Q22, But Price Overly Impacted
- We believe revenue would Still Be Slow in 2Q22, but will recover in 4Q22 or 2023.
- We believe FinTech will be the only highlight, but online game and advertising will be negatively impacted.
- However, we estimate the stock price will have an upside of 55%.
Taiwan Dual-Listings – TSMC Premium Decline Could Highlight Foreign Vs. Domestic Sentiment Mismatch
- TSMC’s ADR premium has fallen substantially and is at the lower end of its 3-year range
- ASE’s ADR premium is in contrast near the upper end of its range
- ChipMOS ADRs are now trading at a discount to their Taiwan shares
The Launch of Apple Pay Is Likely to Result in Market Share Losses for Kakao Pay
- In the past several days, there have been numerous local media outlets that have mentioned about a potential launch of Apple Pay in Korea in the coming months.
- We believe the launch of Apple Pay in Korea could occur in the next 6-12 months and this is likely to further heighten the competitive pressures on Kakao Pay.
- We continue to be concerned about the lofty valuation multiples of Kakao Pay as it is trading at 165x P/E (2024E) and 5.1x P/B (2024E).
Kuaishou Dives Into Cloud Services and Chipmaking
- Kuaishou Technology Co. Ltd., the operator of China’s second-largest short video app, unveiled the new video cloud brand StreamLake and a self-developed intelligent video processing chip Wednesday in key moves to expand its business
- The launch of StreamLake, the first enterprise-facing product from Kuaishou, marks the short-video platform operator’s official entry into the cloud services market and a shift from its original consumer-focused businesses
- StreamLake will provide artificial intelligence-powered video creation and distribution solutions for corporate clients, Kuaishou said.
HSI Index: Longfor, Alibaba, Ping An, and Tencent
- The carnage in China and some Hong Kong real estate and property management companies and financials went largely unnoticed.
- The five-day decline in Longfor was 18%, Country Garden by 15.50%, Hang Seng Mainland Properties Index fell 6.75%, and HSI Properties Index fell 2.75%.
- It has had zero impact on the rest of the world (ROW) markets.
Confident In Growth Opportunities. Weak Q3FY22 Billings Guidance Does Not Change Our Bullish Thesis
- Freshworks (FRSH US) reported solid 2QFY22 results, and the company beat all key estimates, showed strong revenue growth of 37% YoY, and added ~1,800 net new customers.
- Welcomed high-profile new customers such as Cloudera, Dynatrace, Sterling Bank, Thomas Cook, World Market, Angi Home, and more.
- Shares of Freshworks (FRSH US) have been exposed to heightened volatility lately, which we think provides long-term investors with an opportunity.
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