In today’s briefing:
- Trend Micro (4704) Up For Sale? Would Be a HUGE Buyout But How Huge? And Who?
- Reddit (RDDT): Post-IPO Inclusion in US & Global Indices
- Tokyo Electron (8035 JP): Q1 FY03/25 flash update
- Tech Supply Chain Tracker (10-Aug-2024): TSMC breaks records with record July orders.
- SMIC (981.HK): Revenue and GM Continued to Trend Up in 3Q24
- Visco Technologies Corp (6698 JP): Q1 FY03/25 flash update
- Cognizant Technology Solutions: Increased Focus on Large Deal Acquisitions To Grow The Top-Line Inorganically! – Major Drivers
- CDW Corporation: Focus on Emerging Technologies & Other Factors Driving Our Optimism! – Financial Forecasts
- Arisawa Mfg (5208 JP): Q1 FY03/25 flash update
- Elecom Co Ltd (6750 JP): Q1 FY03/25 flash update
Trend Micro (4704) Up For Sale? Would Be a HUGE Buyout But How Huge? And Who?
- A Reuters article overnight says Trend Micro might be up for sale. This caused the ADRs to jump 10% overnight. The remaining co-founders are 65 and 70 this year.
- The stock has effectively gone sideways the last few years as Value Act has been activisting. Now one has to exercise one’s imagination to think about a possible sale price.
- On a DCF basis, a PE fund couldn’t reasonably do this. Multiples are too high. That means a strategic buyer would be more likely. But Who? Why? And How much?
Reddit (RDDT): Post-IPO Inclusion in US & Global Indices
- Reddit (RDDT US) is ineligible for inclusion for the upcoming August review because of fcap failing the fcap threshold if it qualifies for the standard segment.
- Reddit (RDDT US) is ineligible for inclusion for the upcoming September review because of failing the minimum public voting rights threshold.
- The IPO lock-up expiry increases the probability for inclusion in November and December review for US and Global indices. Forecasted demand in December is ~$360m and 2.1 ADV.
Tokyo Electron (8035 JP): Q1 FY03/25 flash update
- FY03/25 forecast: Revenue JPY2.30tn (+25.6% YoY), Operating profit JPY627.0bn (+37.4% YoY), Recurring profit JPY630.0bn (+36.0% YoY).
- R&D investment plan: JPY1.5tn over FY03/25–FY03/29, with JPY253.0bn in FY03/25 for new development buildings and equipment.
- Shareholder returns: JPY319.8bn total, including JPY79.9bn for share buybacks and JPY239.8bn for dividends.
Tech Supply Chain Tracker (10-Aug-2024): TSMC breaks records with record July orders.
- TSMC achieves record-breaking performance in July thanks to high demand from key clients like Apple, Intel, and Nvidia.
- Chang Wah Electromaterials appoints new CEO and plans a major US$100M expansion in Malaysia through CWTC.
- South Korean micro LED component makers target the backplane market with AI-driven AR and VR technologies gaining popularity, while Taiwan’s PCB sector faces sustainability challenges in Southeast Asia.
SMIC (981.HK): Revenue and GM Continued to Trend Up in 3Q24
- Expected sequential revenue growth of 13% to 15%, gross margin expected between 18% and 20%.
- The company has not increased capacity utilization through price cuts but supports customers in facing competition to maintain market share.
- Inventory replenishment behavior will end in the third quarter, and fourth-quarter orders will more accurately reflect actual demand rather than the impact of restocking.
Visco Technologies Corp (6698 JP): Q1 FY03/25 flash update
- Q1 revenue increased by 27.4% YoY to JPY839mn, achieving an operating profit of JPY40mn and a recurring profit of JPY49mn.
- Revised FY03/25 forecast: revenue JPY3.7bn (+16.1% YoY), operating profit JPY200mn, recurring profit JPY200mn, net income JPY13mn.
- Company recorded JPY150mn in tender offer-related expenses in Q1 and will not distribute an annual dividend for FY03/25.
Cognizant Technology Solutions: Increased Focus on Large Deal Acquisitions To Grow The Top-Line Inorganically! – Major Drivers
- In evaluating Cognizant Technology Solutions’ performance for the second quarter of 2024, several important factors come to the forefront, presenting a mixed picture of the company’s financial health and operational execution.
- The company, driven by strategic acquisitions and improved operational efficiency, posted better-than expected revenue and margin figures, but has notably seen year-over-year revenue decline and continuous pressure in certain industry sectors.
- Positively, Cognizant’s revenue in Q2 amounted to $4.85 billion, surpassing the high end of their guidance range and marking a 2.1% sequential growth in constant currency, the highest since 2022.
CDW Corporation: Focus on Emerging Technologies & Other Factors Driving Our Optimism! – Financial Forecasts
- CDW’s earnings for the second quarter of 2024 indicated a cautious consumer behavior resulting in elongated sales cycles and a preference to prioritize immediate needs over expansion endeavors.
- CDW has witnessed a hesitation in capital investments, particularly those tied to data center and network modernization, alongside a significant interaction with client device refresh activities.
- Additionally, unexpected market-specific dynamics, such as escalated challenges in the UK market and concerns around federal funding in the US, were cited as influencing factors.
Arisawa Mfg (5208 JP): Q1 FY03/25 flash update
- Revenue for Q1 FY03/25 was JPY12.1bn (+27.2% YoY), with operating profit at JPY1.1bn and recurring profit at JPY1.3bn.
- Electronic Materials segment revenue increased 32.7% YoY to JPY7.2bn, with an operating profit of JPY488mn (loss of JPY260mn in Q1 FY03/24).
- Display Materials segment revenue increased 75.9% YoY to JPY1.3bn, with an operating profit of JPY515mn (+309.9% YoY).
Elecom Co Ltd (6750 JP): Q1 FY03/25 flash update
- Sales reached JPY27.6bn (+5.4% YoY), driven by mobile batteries, AC chargers, and beauty appliances from Tescom Denki Group.
- Operating profit was JPY2.5bn (-25.2% YoY) due to a rise in SG&A expenses despite higher gross profit.
- B2C sales were JPY18.8bn (+12.6% YoY), with e-commerce sales at JPY4.9bn (+21.5% YoY), and B2B sales at JPY8.8bn (-7.3% YoY).
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