In today’s briefing:
- TOPIX Index Upweights: The Big April Basket 2022 (Pre-Event)
- Bytedance Tearsheet – Doesn’t Need Much of an Introduction
- MergerTalk: Microsoft/Activision Blizzard-Why We Think This Transaction May Not Be Such A Gamble
- Zip To Merge With BNPL Rival Sezzle
- Tencent (700 HK): Besieged Game Business
- Grab Earnings Preview: Recovery Ahead
- Pine Labs Tearsheet – Driving a PoS Payment Revolution
- Phison (8299.TT): Insistence in NAND Flash Technology
- The Battle Between Quantum Supremacy and Encryption
- Pick of the Week – Infosys Ltd.
TOPIX Index Upweights: The Big April Basket 2022 (Pre-Event)
- The Tokyo Stock Exchange (TSE) calculates Free-Float Weight (FFW) for each listed company and uses this value as a key component of TOPIX Index Calculation.
- For companies with “low liquidity” the FFW will be multiplied by a fixed liquidity factor of 0.75 to derive the final FFW used for index calculation.
- Every April, the application of this liquidity factor is reviewed by the TSE for all TSE1 constituents. This situation opens up interesting opportunities for a basket trade.
Bytedance Tearsheet – Doesn’t Need Much of an Introduction
- Bytedance doesn’t need a whole lot of introduction as it runs one of the most popular global apps, TikTok, and one of the largest domestic apps in China, Douyin.
- The company undertook a funding round in Dec 2020, which valued the company at around US$180bn. Its valuation has touched US$425 bn in June 2021 in private market transactions.
- Rumours about listing have been doing the rounds since as far back as 2019. Although there are no confirmed listing plans.
MergerTalk: Microsoft/Activision Blizzard-Why We Think This Transaction May Not Be Such A Gamble
- Microsoft’s all cash acquisition of video game publisher Activision Blizzard is the biggest in the former’s history and the largest ever transaction in the video gaming sector.
- While intense regulatory scrutiny of the deal is expected, the arguments favoring high odds for eventual deal approval are reasonable.
- We believe the 17% merger spread offers the prospect of double-digits annualized return over the next 12 to 18 months.
Zip To Merge With BNPL Rival Sezzle
- Zip (Z1P AU) is offering 0.98 Zip shares for every Sezzle (SZL AU) share, a 22% premium to last close. Zip is raising $148.7mn to fund the deal.
- Sezzle is incorporated in Delaware, therefore the merger is subject to those takeover rules, not ASX rules.
- Zip reported a $214.3mn today. As Quinlan Associates put it, the Asia Pacific BNPL industry is more like “Buy Now, Pray Later”.
Tencent (700 HK): Besieged Game Business
- Short video has been taking time on site from game players.
- Main games are shrinking, but the authorities have not been granting license to new games.
- The authorities also banned Chinese players from playing with overseas game players.
Grab Earnings Preview: Recovery Ahead
- Grab (GRAB US) is currently trading at US$5.80 per share, more than 50.0% below its IPO price of US$13.06 per share.
- The company’s mobility business was severely impacted due to the pandemic and has not yet recovered to pre-pandemic levels. Grab is reporting 4Q2021E results on Thursday (03rd March).
- As most of the countries in the SEA region opens up economies with Omicron-related fears fading, we expect gradual recovery in mobility business which should help re-rate Grab’s shares upwards.
Pine Labs Tearsheet – Driving a PoS Payment Revolution
- Pine Labs is a leading merchant commerce platform. It provides a merchant platform and software for point of sales machines.
- Its Feb 22 round was said to have been done at a rumored valuation of over US$5bn.
- In Jan 2022, the company filed confidentially for an initial public offering worth $500m with the US Securities and Exchange Commission.
Phison (8299.TT): Insistence in NAND Flash Technology
- We estimate Phison could reach NT$14.1bn sales and GM 25% outlook in 1Q22.
- For 2022, it stars with a good beginning for 5~10% NAND price lifted, and Phison’s insistence on NAND Flash controller technology and allied with AMD.
- Phison would maintain its solid dividend policy and it’s 80% in the past. It was ~NT$63 EPS in 2021.
The Battle Between Quantum Supremacy and Encryption
- The recent invasion of Ukraine by Russia was preceded by a wave of cyberattacks that took down the country’s Websites, Wiped Data, and Blocked Access to Key Communication Tools.
- Cryptography and Encryption standards that are currently used industry-wide can be easily brute-forced by quantum computers
- Arqit aims to combat the rise in quantum computing by offering a quantum encryption platform as a service.
Pick of the Week – Infosys Ltd.
- Infosys is India’s second-largest provider of consulting and IT services to clients across the globe
- It is also among the fastest-growing IT services organization in the world and leader in the offshore services space having pioneered the Global Delivery Model
- The company provides business consulting, application development and maintenance, and engineering services to 1,738 active clients
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.
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