Daily Brief TMT/Internet: Z Holdings, Mediatek Inc, 4Paradigm, Taiwan Semiconductor (TSMC) – ADR, Nokia OYJ, Spectur Ltd and more

• GTVs for Yahoo’s shopping division fell by 8% in 1Q2023. 
• Although this was expected and gross profits did improve, the downturn reflects deeper concerns.
• Even the group’s Zozo fashion platform are much more slowly.

• Mediatek shares rallied recently on high volume and are approaching their 52-week highs. We however warn investors to beware emerging news of Huawei/SMIC’s chip capabilities.
• Mediatek announced last week its flagship mobile phone chip was preparing for high volume manufacturing with TSMC’s most advanced 3-nanometer process node.
• However, we believe Huawei’s recent Mate 60 chip development could pose a threat to Mediatek’s market share outlook. We downgrade our rating from Structural Long to Neutral, target price NT$815.

• 4Paradigm (1764934D HK), a leader in enterprise artificial intelligence (AI) in China, is pre-marketing a US$150-200 million HKEx IPO.
• In 4Paradigm IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The bear case rests on Sage Platform’s rapid slowdown, high customer concentration risk, recent gross margin pressure, FCF burn, rising cash collection cycle and BIS entity list designation. 

• India Supply Chain Rising — Hon Hai is helping Apple launch with India-made iPhone 15’s on Day 1. These days, Apple likely wants to diversify away from China even faster.
• ARM IPO prices at high end of range, is backed by TSMC, Apple, Nvidia, Samsung, Intel.
• We downgrade Mediatek: After rally, beware of Huawei/SMIC chip capabilities causing market to realize Mediatek could lose market share.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Nokia’s ESG as “Adequate”, in line with its “Adequate” Environmental and Social pillars. The company has a “Strong” score for the Governance pillar. Controversies are “Immaterial” and Disclosure is “Strong”.