In today’s briefing:
- Sea Ltd: Something to Think About if You Are Starting to Lean Towards the Bullish Side
- 51job’s Improved $61 Offer Gets the Board Onside
- The Current Huge Gap of VGA Card Demand over Supply May Reverse in 2H22/2023
- Will Samsung Follow Apple and Be Forced to Stop Selling Smartphones in Russia Due to FDPR Rule?
- KYEC (2449.TT): A Slow 1Q22 Is Likely to Occur, Which Could Present an Entry Point.
- HANA: 2022 Net Profit to Grow Despite Additional Costs
- Mindtree: Robust Multi-Pronged Strategy To Capitalize On Healthy Demand
- ARLO: Accelerating Growth Story, PT to $15
Sea Ltd: Something to Think About if You Are Starting to Lean Towards the Bullish Side
- Sea Ltd (SE US)’s outperformance ended abruptly yesterday following the 4Q21 earnings release with the share price giving away 2/3rd of the gains made during the last five days.
- The company’s share price rallied around 30% in the last week of February, alongside rallying markets following a steep correction leading up to the Ukraine crisis.
- With the fundamentals continuing to deteriorate and interest rates expected to continue trending upwards, we expect Sea to continue its downtrend until its valuation multiples reach the pre-pandemic low level.
51job’s Improved $61 Offer Gets the Board Onside
- The consortium has improved the offer price by 6.6% to $61.00 in cash per ADS. The consortium represents 54.9% of the voting rights.
- The Board intends to recommend shareholders vote in favour of the transaction. The transaction is expected to close during the first half of 2022.
- The combination of the improved offer price and the tech shares sell-off improves the chance of meeting the two-thirds shareholder approval threshold. At last close, the gross spread is 7.0%.
The Current Huge Gap of VGA Card Demand over Supply May Reverse in 2H22/2023
- 1H22 is likely the peak for VGA card. Our checks with VGA card makers indicate VGA card price fell in January/February and likely to continue for the rest of 2022.
- Potential supply surge, demand decline, and price drop will all lead VGA market to trend south in 2H22.
- VGA makers will be negatively impacted in 2H22. Gigabyte may be hit the most whereas Asustek may hit the least. Nvidia should also be hit at a certain degree.
Will Samsung Follow Apple and Be Forced to Stop Selling Smartphones in Russia Due to FDPR Rule?
- On 2 March, it was reported in numerous media that Apple Inc will stop all product sales in Russia. This is a measure in response to Russia’s invasion of Ukraine.
- The US-led Foreign Direct Product Rule (FDPR) regulation may force a more stringent sanction that could force Samsung to stop selling smartphones in Russia.
- Despite these concerns about FDPR, the decision as to whether to totally block Samsung’s smartphone sales to Russia has not been finalized.
KYEC (2449.TT): A Slow 1Q22 Is Likely to Occur, Which Could Present an Entry Point.
- It is usually the low season in the 1st quarter, and we expect the revenue/GM is about NT$8.55bn/25.5% in 1Q22 respectively.
- KYEC’s main clients are MediaTek, NVDA, XLNX and etc., and some demands in Automotive also rising up quickly.
- In real terms, the shareholder might receive the same dividend amount of about NT$2.5+ for 2021. We think it likely targets a 5% dividend yield.
HANA: 2022 Net Profit to Grow Despite Additional Costs
- Analyst meeting came out with negative tone. The company’s Korean SiC segment will continue to incur costs throughout 2022.However, the 45% tumble in share price since Nov’21 factored in negative
- We expect 22E core profit will remain flat YoY at Bt2.3bn. Additional costs and microchip shortages will offset the growth from capacity expansion.
- Bleak outlook until 3Q22. Additional costs will drag core earnings until 3Q22. Current share prices are cheap and provide opportunity for share accumulation.
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
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.
ARLO: Accelerating Growth Story, PT to $15
- ARLO has proven its service business model can be profitable and is now planning to invest more in growth initiatives to drive market share gains to add paid subscribers faster
- The faster than expected pace has given ARLO the means to strategically invest in its business to accelerate its service revenue.
- Looking ahead to the end of 2022, ARLO could be on the cusp of nearly 2 million paid subscribers before realizing the benefits of the increased marketing
Before it’s here, it’s on Smartkarma
