Smartkarma Daily Briefs

• Valuations across Asia are mean reverting – expensive markets derating and the cheap ones rerating. We think this is likely to continue somewhat longer.
• We think HK/China could rerate more; India and Taiwan could derate slightly further. India looks interesting. Valuation range has structurally shifted upwards. But another 5-10% relative valuation correction is warranted.
• Principal stock choices in HK/China, Korea and India pertain to themes of domestic consumption, AI resilience and unloved sectors. Some of the companies have mitigating strategies for the tariff war.

• Satyam’s chairman and founder confessed in January 2009 to misappropriating about $1.5 billion of company funds
• Scandal shook confidence in Indian corporate governance and the country’s IT services industry
• Transparently.ai’s AI tools detected accounting red flags in Satyam as early as 1998

• BYD will release its 2025 annual results on March 24.
• The stock price has risen by 38% since our last buy rating on January 6.
• However, we believe there is still an upside of 19% for the next twelve months.

• Lip-Bu Tan, former CEO of Cadence and founding partner at Walden Catalyst Ventures, will become Intel’s ninth CEO effective March 18
• Mr. Tan is an extremely impressive technology leader, speaker, & influencer with many and varied interests. He is an excellent choice for the most important CEO role in Intel’s history
• Press releases seem to emphasise Products over Foundry but any decision in this regard will take time so it doesn’t appear that Mr. Tan is simply following the board’s orders.

• The return of Mr. Tan as CEO suggests that spinning off or selling  Intel Foundry will accelerate, Intel’s focus should improve.
• It probably also means scaling down considerably Intel manufacturing plans and outsourcing more to TSMC. If you can’t beat them, join them.
• Now is not a good time to buy Semiconductor stocks. It will take a couple of years to fix Intel’s problems. TSMC will benefit.

• Google’s full stack approach to AI, led by Nobel Prize winner Demis Asabas, includes talent, models, platforms, and chips
• Generative AI is being used to enhance search and enterprise solutions, providing monetization opportunities
• Google prioritizes quality and safety in AI development, ensuring no margin for error in critical situations like medical queries

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• GFL is executing a INR 6,000 crore capex plan through FY28 to expand into battery materials, fluorospecialties etc. with commercial production of Battery Chemicals expected to start in Q4 FY25. 
• This marks a strategic shift from a cyclical chemicals business to a high-margin, clean energy materials play positioning GFL at the core of the EV value chain as China+1 sourcing.
• Company is becoming a structural clean-tech growth story. The business could double its revenue base and become global EV materials supplier over the next 3-4 years.

• We conducted a drill exercise in which BIDU’s search revenue will shrink to 1/3 of its size while its AI cloud
• Our key concern is margin compression as search’s high margin as a result of browser infrastructure and monopolistic status aren’t repeatable in AI;
• We raise the TP from US$80.0 to US$92.5 and maintain SELL.

• ArcelorMittal (MT US) reported an EBITDA decline for the third year in a row to US$7b in CY24. Targets $0.4b/0.6b of $1.9bn of planned strategic EBITDA growth in 2025/2026.
• Management has guided a slightly positive apparent global demand growth 2.5-3.5% ex China. Expects restocking demand in Europe. 
• Trades at 0.5x P/B vs 2-3x P/B for Indian steel mills JSW Steel Ltd (JSTL IN) , Tata Steel Ltd (TATA IN) , Jindal Steel & Power (JSP IN) 

• By 2025, AI server to be developed by Intel for BBU and Taiwanese players, aiming to enhance performance and innovation in the market.
• Nvidia visits Samsung amidst supply uncertainty of HBM3E, highlighting the importance of partner collaboration in the semiconductor industry.
• Intel’s unveiling of Panther Lake, powered by 18A core ultra chips, signals a new era of technology advancement in the company’s product lineup.