Analyst notes: MediaTek premium push, Rakuten roaming reset, AppLovin pixels

Malaysia’s chip sector hits talent constraint as local attrition runs 14%–26%

Analysts issued fresh notes on eight Asia-Pacific and U.S. technology, media and telecom names on Thursday, with Counterpoint Research highlighting MediaTek’s expanded presence in premium smartphone chips since 2022, Jefferies cutting Rakuten Group’s target after KDDI reduced roaming support, and Wells Fargo calling an apparent acceleration in AppLovin’s e-commerce web-tracking pixel a “false start.” Separate broker notes from Daiwa Capital, UOB Kay Hian, CGS International, Jefferies, and Hong Leong Investment Bank tracked target-price changes across Indonesian, Thai, Korean, Malaysian and Japanese names, and flagged structural constraints ranging from a talent bottleneck in Malaysia’s semiconductor sector to rising memory costs in the premium phone market.

MediaTek’s premium push faces rising memory costs

Counterpoint Research analyst Shivani Parashar said in a report that MediaTek has strengthened its position in the premium smartphone chip market over the past few years, supported by deeper partnerships with Chinese smartphone makers. Since the launch of its Dimensity 9000 chip in 2022, MediaTek has expanded its presence across flagship Android smartphones, Parashar said. The recent launch of the Dimensity 9600 Pro marks another important step in the company’s premium push, she said. The timing is particularly important as the premium smartphone segment enters a more challenging cost environment with rising memory prices, Parashar noted. MediaTek faces several competitors in the premium smartphone chip segment, including Qualcomm, Samsung Electronics and Huawei’s HiSilicon, she added. Shares last ended 0.6% lower at 4,950 New Taiwan dollars.

Rakuten Mobile faces roaming reset

Jefferies analyst Hiroko Sato said in a note that Rakuten Group’s mobile unit is likely to face a temporary slowdown in subscriber additions and potential network quality disruptions in the near term after the carrier revised a roaming agreement with KDDI. KDDI’s decision to substantially reduce roaming support for Rakuten from Oct. 1 represents an important milestone in the mobile business’s transition toward a fully self-sustaining network, Sato said. In the longer run, this should drive meaningful cost savings that support mobile profitability, she said. Jefferies cut its target price on Rakuten Group to 775 yen from 1,000 yen and maintained a hold rating as it awaits greater visibility on the mobile operations. Shares were 3.5% lower at 657.7 yen.

Telkom Indonesia weighs fiber consolidation, execution risk

UOB Kay Hian analysts said in a research report that Telkom Indonesia (Persero) may benefit from the completion of phase two of its spinoff of the wholesale fibre connectivity business into Telkom InfraCo. The completion will further consolidate this business into Telkom InfraCo, strengthening its scale ahead of a potential strategic stake sale, the analysts said. Management is also evaluating whether to consolidate additional fiber assets before proceeding with the strategic investor process, which could further increase Telkom InfraCo’s scale. The brokerage maintained its buy rating but lowered the target price to 3,300 rupiah from 3,600 rupiah to partly reflect a potentially longer timeline for value-unlocking of Telkom InfraCo. In a separate note, UOB Kay Hian analysts Willinoy Sitorus and Andrew Agita Buntoro said Telkom Indonesia could face near-term execution risks amid uncertainty from management changes and asset reorganization, with restructuring costs potentially pressuring near-term earnings. Shares were 0.4% lower at 2,240 rupiah.

True Corp seen posting resilient third quarter

UOB Kay Hian analysts said in a report that True Corp.’s earnings should stay resilient in the third quarter thanks to continued growth across several key businesses and lower finance costs. The Thai telecom company’s core service revenue should continue growing in the third quarter due to healthy performance in its mobile, broadband and TV businesses, the analysts said. The company can probably achieve its EBITDA growth guidance of 9% in 2026, aided by continued growth in its mobile and broadband businesses and a lower effective interest rate, they said. The brokerage raised its target price on the stock to 16.50 baht from 15.70 baht with an unchanged buy rating. Shares were 0.8% higher at 12.60 baht.

Daiwa trims Naver target, flags AI infrastructure costs

Daiwa Capital analysts Thomas Y. Kwon and Joon Lee said South Korean internet giant Naver’s third-quarter earnings could be pressured by weak revenue growth from its core platform services. The analysts forecast seasonally soft revenue growth for both advertisement and commerce segments due to the Chuseok holiday in September. The company’s third-quarter operating profit likely fell 5.2% on year to 541 billion won, with the operating profit margin narrowing to 15.5% from 18.2% a year earlier, they said. Elevated capital expenditure and operating costs related to artificial-intelligence infrastructure are also weighing on earnings, they added. Daiwa trimmed its target price for the company to 270,000 won from 273,000 won but kept a buy rating. Shares were 0.2% higher at 191,500 won.

CelcomDigi’s third-quarter results flagged as near-term catalyst

CGS International analyst Prem Jearajasingam said in a note that CelcomDigi’s third-quarter earnings results, due in November, could be a near-term catalyst, given the company’s undemanding valuation and healthy dividend yield. CelcomDigi’s acquisition of a stake in Malaysia’s state-backed 5G infrastructure firm Digital Nasional could be completed within weeks, he said. That should allow CelcomDigi and other new shareholders to streamline Digital Nasional’s operations, reduce losses and support an efficient 5G rollout, Jearajasingam said. Digital Nasional’s recent 5.2 billion ringgit financing could reduce the capital contributions currently expected from CelcomDigi and Maxis, although details of the funding structure remain unclear, he said. CGS maintained an add rating on CelcomDigi and kept its target price at 2.84 ringgit. Shares were unchanged at 2.51 ringgit.

Jefferies says GMO Internet cybersecurity story underpriced

Jefferies analyst Hiroko Sato said in a note that GMO Internet Group’s valuation fails to fully reflect the long-term growth opportunity from cybersecurity demand and the company’s growing exposure to national security-related projects. Cybersecurity demand remains a structural growth driver, the analyst said. Second-half earnings should also be supported by the recognition of delayed sales in its internet security business and ongoing margin improvement initiatives, she said. Although earnings visibility remains lower than peers due to the absence of company-wide guidance and continued weakness in cryptoassets, Jefferies believes these factors are more than priced in at current levels. Jefferies has a buy rating and a target price of 5,000 yen on the stock. Shares were 1.0% lower at 3,939 yen.

Malaysia’s chip cycle runs into talent bottleneck

Hong Leong Investment Bank analyst Toh Woo Kim said in a note that talent is emerging as a key constraint as Malaysia enters a stronger semiconductor cycle, potentially limiting how quickly companies can translate demand and investment into revenue and earnings. His analysis shows employee attrition at local companies at 14%–26%, well above the 7%–10% at multinational companies in Malaysia and regional peers. About 84%–90% of hiring is estimated to replace departing workers, leaving net workforce growth at around 3%, excluding outsourced semiconductor assembly and testing companies. Younger workers account for most hires and departures, raising training costs and potentially slowing productivity, he reckoned. Companies with lower attrition may have an execution advantage, while persistent churn could increase delivery risks, he added.

Wells Fargo calls AppLovin pixel signal a ‘false start’

Wells Fargo analysts said AppLovin investors shouldn’t get too excited by an apparent acceleration in adoption of the company’s e-commerce web-tracking pixel. The rise in new pixels has been driven by low-to-no-traffic sites in the Asia Pacific region, the analysts said. “Inflection appears to be a false start,” the analysts wrote, adding that the numbers may reflect a data error. “We don’t observe a meaningful inflection in pixel additions when weighting pixels by web traffic,” they wrote. The analysts added that AppLovin is early in its new e-commerce partner strategy, and an inflection in customer growth probably won’t come before next year. Shares were down 2.7% at $282.64, and earlier touched a 52-week low of $275.13.