Tech, Media & Telecom Roundup: Market Talk

The latest Market Talks covering Technology, Media and Telecom. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.

0828 GMT - Lenovo's infrastructure-services segment could continue narrowing operating losses and achieve a turnaround in early fiscal 2026, CCB International analyst Clint Su says in a research note. The segment could gradually narrow its operating loss in the quarters ahead, supported by high-margin products such as storage, high-performance computing and the Neptune liquid-cooling technology. Meanwhile, the PC maker is expected to continue leveraging its AI PC advantage with several new products due to be released in 2H this year, including those equipped with Intel's Lunar Lake chips, he says. The AI PCs could further boost Lenovo's margins and average selling price, he adds. CCB International maintains an outperform rating on the stock, with the target price unchanged at HK$12.50. Shares ended at HK$8.98. (sherry.qin@wsj.com)

0649 GMT - AEM Holdings' revenue is expected to grow further in 2024, UOB Kay Hian's John Cheong says in a research report. The provider of test solutions for the semiconductor industry has raised its 2H revenue guidance to S$190 million-S$210 million from S$160 million-S$180 million, due to its key customer bringing forward systems' orders into 4Q 2024 from 2025. This suggests a 2024 revenue range of S$364 million-S$384 million for the company, the analyst notes. However, the semiconductor industry's outlook appears mixed, with artificial-intelligence and high-performance computing maintaining positive momentum, while other segments face headwinds, according to the company. The brokerage raises its target price to S$1.10 from S$1.04 while maintaining a sell rating. Shares are unchanged at S$1.39. (ronnie.harui@wsj.com)

0524 GMT - TSMC's American fabs could dilute its margin, but the Taiwanese contract chipmaker will likely pass on the costs, Morgan Stanley analysts say. The $6.6 billion award under the Chips Act to TSMC Arizona was confirmed last week, and the first of the company's three facilities is on track to fully open in early 2025. "We see this as a confirmation, instead of more aggressive node migration in the U.S.," the analysts say in a note. TSMC could produce the A16 node in the U.S. by 2030, after the A14, its most advanced node, is produced first in Taiwan in 2028 or 2029, they say. While the analysts expect long-term margin dilution from the U.S. fabs, they believe TSMC's stock could rerate because the award was confirmed before Donald Trump took office and the chip maker can adjust future wafer prices to pass on the higher costs. Shares are last at NT$1,020.00. (sherry.qin@wsj.com)

0409 GMT - NetEase's fundamentals remain intact given its strong game pipeline, Nomura analysts Jialong Shi and Rachel Guo say in a research note. NetEase's ADRs have lagged its Chinese Internet peers this year so far due to a lack of big titles and softened revenue from some legacy titles, such as "Fantasy Westward Journey" and "Eggy Party," the analysts say. However, Nomura reckons the Chinese gaming giant will launch big new titles to re-accelerate top-line growth. Thanks to its gaming business's potential to recover gradually from 4Q onwards, Nomura thinks NetEase's ADR could outperform its Chinese internet peers in the near term. Nomura maintains a buy call on NetEase, but raises its ADR target price to US$102.00 from US$100.00. Shares last closed at US$85.49.(sherry.qin@wsj.com)

0218 GMT - Singapore is among Morgan Stanley's most preferred equity markets going into 2025, analysts at the U.S. investment bank say in a research report. MS increases its overweight position on Singapore equities to 100 bps from 75 bps, supported by an expected capital markets reform program. "Singapore possesses the means and increasingly the political will to boost the vibrancy of its equity market," the analysts say. "If it is successful, it could significantly boost valuation of Singapore equities," they say. Singapore also remains an attractive yield story, they add, noting DBS Group Holdings and Singtel are named in its 'ASEAN best business model' list and have both outperformed MSCI Singapore year-to-date. (ronnie.harui@wsj.com)

0021 GMT - Xero needs to demonstrate that its products can add value for customers in order to drive long-term performance amid slowing subscriber growth, Morgans analyst Nick Harris says. He tells clients in a note that the cloud-accounting software provider has delivered what he calls an immaterial uplift to average revenue per user from uptake of additional services. With subscriber growth slowing, Xero's strong price rises need to be justified from customers' perspective. He points to payroll's first-half performance as an example of how Xero can do this. Morgans lifts its target price 34% to A$188.00 and keeps a hold rating on the stock, which is down 0.8% at A$171.23. (stuart.condie@wsj.com)

(END) Dow Jones Newswires

November 18, 2024 04:20 ET (09:20 GMT)

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