In today’s briefing:
- Zhihu (2390 HK/ZH US)’s Cheeky Buyback
- Tencent/Netease: Zero for Major Names; Industry Revenue Growth Flattish in First Half
- Consumer Tales #July21-26:Apple Falls from Top 5 in China, Xiaomi Tops India Smartphones
- Taiwan Semiconductor (TSMC): How Will They Deal With The Strained Production Capacity & Geopolitical Risks & Regulatory Pressures? – Major Drivers
- [Kanzhun (BZ US, BUY, TP US$19) TP Change]: Impacted by Poor Macro but Still on Top of Competition
- Tech Supply Chain Tracker (27-Jul-2024): ST cuts 2024 outlook as demand slows.
- ASML Holding N.V.: What Is The Impact Of Impact of the Chips Act and Global Expansion? – Major Drivers
- Snap-on Incorporated: How They Are Grappling With Production Capacity and Product Availability! – Major Drivers
- SAP SE: Strengthening Partnership with IBM for Generative AI and Cloud Solutions & Other Major Drivers
- Nokia Corporation (NOK): The Story Of The Expansion Into The 5G Core Network Market! – Major Drivers
Zhihu (2390 HK/ZH US)’s Cheeky Buyback
- Back on the 19th July, online Q&A play Zhihu (2390 HK/ZH US) announced the buyback of 46.92mn ordinary A shares (15.9% of shares out) at HK$9.11/share (US$3.50/ADS).
- Assuming the buyback is fully taken up, chairman Yuan Zhou’s stake will increase to 44.4% from 42.9% currently (held via A shares and the weighted-voting B shares).
- The key condition is a simple majority vote from independent shareholders. Zhihu is sitting on net cash of US$764mn. A significantly larger buyback, or higher price, could have been initiated.
Tencent/Netease: Zero for Major Names; Industry Revenue Growth Flattish in First Half
- China announced game approval for the June batch. The number of games approved remained at a higher level than 2023.
- The pace of China game approval appears to have accelerated to the same level as pre-tightening. Of companies that we are monitoring, none got any approval.
- China’s CADPA published a semi-annual report pointing to flattish growth of gaming revenue in the first half.
Consumer Tales #July21-26:Apple Falls from Top 5 in China, Xiaomi Tops India Smartphones
- Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
- An interesting comparison between China and India smart phone markets in 2Q 2024 – highlighting differences in market size and the dominance of leading players.
- Xiaomi Corp(1810 HK) made a strong come back in 2Q24 in terms of sales in both the markets. In China, it saw a 17% year-on-year increase, shipping 10 million units.
Taiwan Semiconductor (TSMC): How Will They Deal With The Strained Production Capacity & Geopolitical Risks & Regulatory Pressures? – Major Drivers
- Taiwan Semiconductor Manufacturing Company’s (TSMC) second quarter 2024 results reveal a mixed picture of advances and challenges.
- The revenue for the quarter was notably strong, increasing by 13.6% sequentially in NT or 10.3% in U.S. dollars.
- This substantial growth was fueled by robust demand for the cutting-edge 3- and 5- nanometer technologies, although somewhat offset by smartphone seasonality.
[Kanzhun (BZ US, BUY, TP US$19) TP Change]: Impacted by Poor Macro but Still on Top of Competition
- Due to weakening hiring demand from both manufacturing and service, we expect BZ’s cash billing to decline 5% QoQ in 2Q24, 9% below consensus.
- We believe BZ’s user matrices still growing and leading. The weakness is mainly attributable to the employer/hiring side;
- We cut TP by US$3 to US$19/ADS while keep the BUY rating.
Tech Supply Chain Tracker (27-Jul-2024): ST cuts 2024 outlook as demand slows.
- ST reduces 2024 outlook amid industrial and automotive slowdown, impacting company’s future projections.
- VCs discuss Taiwan startups in AI industry, highlighting challenge of staying competitive in fast-evolving sector.
- Global regulators collaborate to address market dominance of AI giants, emphasizing need for fair competition and consumer protection.
ASML Holding N.V.: What Is The Impact Of Impact of the Chips Act and Global Expansion? – Major Drivers
- ASML announced its second quarter 2024 financial results, revealing data that both supports and raises concerns about its short-term performance and long-term strategy.
- The company posted total net sales of EUR 6.2 billion, slightly ahead of its guided figures, with net system sales contributing EUR 4.8 billion.
- The net system sales were driven by 54% Logic and 46% Memory, with Installed Base Management sales slightly higher than expected at EUR 1.48 billion.
Snap-on Incorporated: How They Are Grappling With Production Capacity and Product Availability! – Major Drivers
- Snap-on Inc., known for manufacturing tools and equipment for professional use, delivered mixed results for its second quarter of 2024.
- The Company experienced a slight decline in gross sales of 1.1% organically, going from $1,191.3 million the previous year to $1,179.4 million.
- The operating income (OI) margin, though, rose to 23.8% from last year’s figures.
SAP SE: Strengthening Partnership with IBM for Generative AI and Cloud Solutions & Other Major Drivers
- SAP SE’s Q2 2024 results show continued growth momentum despite the volatility in the software industry.
- More customers are moving to the cloud, and the company’s portfolio is becoming increasingly attractive, owing to its Business AI capabilities.
- Their Q2 performance was marked by substantial increases in profitability and the diligent execution of their transformation program.
Nokia Corporation (NOK): The Story Of The Expansion Into The 5G Core Network Market! – Major Drivers
- Nokia Corporation’s engagement in the second quarter of 2024 revolved around significant developments amid a transitory, challenging market environment.
- The company announced two crucial transactions: the proposed acquisition of Infinera, a North American optical networking entity, and Nokia’s plan to divest its submarine networks business to the French State.
- The acquisition of Infinera is expected to boost Nokia’s Optical Networks business by quickening innovation for customers and strengthening Nokia’s position in North America.
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