In today’s briefing:
- AEM Holdings: 2H21 Revenue Acceleration to Continue into FY22. Fair Value Maintained at 8 SGD
- Canva Tearsheet – The US$40bn Startup that You Have Probably Not Heard Of
- Softbank Group – Alibaba Remains the Key Share Price Driver as VF Diversification Stalls
- NortonLifeLock/Avast: Deal Progress & Spreads
- GoTo Tearsheet – Accounts for 2% of Indonesia’s Economy
- FnGuide Samsung Group Index Rebalancing Preview
- Mindtree: Robust Multi-Pronged Strategy To Capitalize On Healthy Demand
- Investor meet reinforces strong demand visibility
- XPER: Growth Year on Track
AEM Holdings: 2H21 Revenue Acceleration to Continue into FY22. Fair Value Maintained at 8 SGD
- AEM (AEM SP) released record 2H21 results which indicate Intel Corp (INTC US) ramp continues as expected. Management expects more of the same in FY22.
- Intel Corp (INTC US) has a variety of issues but it will spend massive amounts of cash to keep up with rivals. AEM (AEM SP) remains a major beneficiary.
- Fair value unchanged at 8 SGD, or 78% upside from current 4.5 SGD share price.
Canva Tearsheet – The US$40bn Startup that You Have Probably Not Heard Of
- Canva is an Australia based online design and publishing tool with a mission to empower everyone in the world to design anything and publish anywhere.
- In Sep 2021, Canva raised US$200m and announced a valuation of US$40bn. The round was led by T. Rowe Price.
- It hasn’t announced any plans for listing, but its soaring valuation and involvement of late stage funds means that listing is likely to be in the next year or two
Softbank Group – Alibaba Remains the Key Share Price Driver as VF Diversification Stalls
- Softbank Group (9984 JP) shares have fallen 46% since 31 March v a 52% decline for Alibaba Group (9988 HK) with little daylight between the two since August
- That reflects fading influence from Vision Fund which is shed $12bn in value Q4 to date and c. $30bn this fiscal year.
- The discount remains in the 50% range as tailwinds from the share buyback depend on a successful IPO of ARM, where the magnitude and timing remain uncertain
NortonLifeLock/Avast: Deal Progress & Spreads
- On 24 February, the Spanish antitrust regulator, the National Markets and Competition Commission (CNMC) approved the proposed merger.
- All Regulatory Conditions have now been satisfied, other than approval by the UK’s CMA. The deal advances to completion but the Effective Date has been pushed to 4 April 2022.
- As of now, the majority cash option ($7.61 + 0.0302 NortonLifeLock shares/Avast share) should be preferred vs. the majority stock option. The spread on the majority cash option is 1.4%.
GoTo Tearsheet – Accounts for 2% of Indonesia’s Economy
- GoTo, is an Indonesian holding company, was formed in May 2021 as a result of a merger between Gojek, leading player in ride hailing, and Tokopedia, leading e-commerce player.
- GoTo raised more than US$1.3bn in its pre-IPO funding which was reported in November 2021, see here. Valuation was said to be between US$28.5-30.0bn.
- The company had already announced that it would look to undertake a dual listing in Indonesia and the US.
FnGuide Samsung Group Index Rebalancing Preview
- FnGuide Samsung Group has the most AUM among locally themed indexes. As of last Friday’s closing price, AUM is ₩1.52T.
- The share price movements of Samsung Group affiliates basically show high cointegration. Therefore, a small differential impact on the flow significantly affects the short-term price direction of these stocks.
- So, we should consider a long/short setup on a swing trading window. Particularly, we need to focus on the first two trading days, when the rebalancing impact is relatively significant.
Mindtree: Robust Multi-Pronged Strategy To Capitalize On Healthy Demand
- Mindtree has a focused strategy to capitalize on the demand scenario. The company intends to focus on five verticals
- The management also has a strong focus on developing expertise in four service lines including Customer Success, Data Intelligence, Cloud, and Enterprises IT
- We recommend a BUY on the stock and assign 38x P/E multiple to its FY24E earnings of Rs 140.2/share to arrive at a TP of Rs 5,310/share, implying an upside potential of 39% from the CMP.
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Investor meet reinforces strong demand visibility
- We attended MTCL’s annual investor meet, where the management reiterated its strong demand outlook and detailed the six strategic levers for FY23. It sees scope for continued performance in their 4x4x4 strategy and investments required to boost long-term.
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XPER: Growth Year on Track
- XPER is setting the course for revenue growth after reporting fourth quarter 2021 results. Aiding the process to revenue growth is an increase in baseline IP license revenue for 2022
- XPER disclosed it has signed a hybrid bonding IP licensing agreement with Micron Technologies (MU)
- XPER is broadening its presence in the automobile space. During the fourth quarter earnings call, XPER disclosed Toyota Motor (TM) will include HDRadio in all its car models
Before it’s here, it’s on Smartkarma
