TMT: Razer Inc, Chindata Group, Capcom Co Ltd, AKM Industrial, Tencent, Cyient Ltd, Hcl Technologies and more

• Razer Inc (1337 HK)‘s Court Meeting will be held tomorrow.
• The highly anticipated abolishment of the headcount test will not become law ahead of the shareholder vote.
• Trading at a gross spread of 8%, unchanged since the record date. That’s positive. Plus this Offer has proxy advisor support.

• A Bloomberg article claimed that Chindata Group (CD US) is attracting takeover interest from GDS Holdings (ADR) (GDS US), PAG and EdgeConneX. Shares rose 9.8% to close at $4.81.
• Potential privatisation will require the blessing of Bain Capital, the largest shareholder. Chindata’s track record of beating guidance, modest leverage and the beaten-down rating make it a target. 
• A forward EV/EBITDA multiple of 8.9x, in line with 21Vianet Group (VNET US)’s proposed acquisition multiple, would imply $6.85 per ADS. 

• Valorant’s Masters 1 Tournament concluded today in Iceland with North America’s Optic Gaming defeating Brazil’s Loud, leaving Japan’s Zeta Division in third place. 
• These are three key regions for viewership and Japan’s surprising performance bodes well for the esports scene in the country. 
• Gameplay for Valorant Mobile has also leaked and early indications are that Krafton could be cannibalised here.

• AKM Industrial (1639 HK)’s privatisation offer from Alpha Luck and AKM Meadville of HK$1.8345 consists of a base offer (HK$1.82) and a final dividend (HK1.45 cent).
• The pre-condition was fulfilled on 22 April. The latest date for the despatch of the scheme document has been extended to 10 June. 
• Shareholders with blocking stakes have previously provided irrevocables. At last close and for an early-August effective date, the gross and annualised spread to the offer is 3.1% and 10.7%, respectively.

• Tencent (700 HK) will announce its first quarter 2021 results on 18th May 2022.
• Since 3Q2021, Tencent’s earnings have started to decelerate, and the previous quarter marked the slowest ever revenue growth for the company since 2004.
• We expect Tencent’s earnings weakness to continue well into 1H2022E due to slowdown in online games and online advertising businesses.  

• Revenue fell 0.4% QoQ in USD CC terms in 4QFY22, but was above our estimate of -1.1% QoQ USD CC.
• The beat was led by both Services (+1.6% QoQ USD CC) and DLM (-9.3% QoQ USD).
• Growth in Services was driven by Portfolio (10% QoQ), Aerospace (3.9%), and Communications (3.5%), while growth in Rail Transportation (-9.5%) was weak.

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.

• While we have underweighted the IT sector (Report) HCL Technologies (HCLT) is a preferred pick due to (1) Significant narrowing of growth differential in FY23 despite disappointment on revenue guidance – vis-à-vis Indian Tier-1 growth leader Infosys.
• We also see modest acceleration in FY23 while most Tier-1 peers will see deceleration
• Our view that underlying growth in Products and Platforms (P&P) business is positive…(continued).

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.