In today’s briefing:
- Apple Mar-25 Inline, June Slightly Weak as Tariffs Hit Margins, Supplychain Reshuffling Out of China
- If I Wanted to Bet on Humanoids, I’d Buy Meta.
- JSW Steel’s Tumble: Untangling the Bhushan Power & Steel Supreme Court Setback
- Source Rock Royalties : Consistent Returns Backed by Strong Fundamentals
- Amazon 1Q’25 Update
- Otsuka Holdings (4578 JP): Rexulti Drives 1Q25 Result; Label Expansion And Acquisition Augur Well
- Hyperscale Capex Is Maintained or Increased No Cuts or Postponement Capacity Constrain at AMZN GOOG
- Gilead Sciences: Cell Therapy Adoption & Expansion to Strengthen Its Competitive Position n Its Domain!
- Procter & Gamble (P&G) Looking To Turbocharge Retail Reach Through Channel Diversification But Will It Work?
- Whirlpool Corporation: Will The North American Market Dynamics Reflect Its Capability To Adapt To & Capitalize On Market Changes?
Apple Mar-25 Inline, June Slightly Weak as Tariffs Hit Margins, Supplychain Reshuffling Out of China
- 2Q25 small 2% beat. Products revenue (iPhone, Mac, etc) up 3% YoY. Services up 12%. Jun-25: low- to mid-single digit revenue growth YoY (inline), 100bps hit to margins or US$900m.
- Good effort to articulate supply chain reshuffle for products sold in US: iPhone from India, the rest from Vietnam. Beyond June, no quantification of impact on costs and demand.
- Despite low 5-8% EPS growth, the stock is expensive due to steady Services growth and large cash returns to shareholders. Trading at 29x FY25 EPS, 27x FY26.
If I Wanted to Bet on Humanoids, I’d Buy Meta.
The commercialization of general purpose humanoid robots could be the most disruptive innovation that the next few decades have in store for us.
It would be a new computing platform that would by far surpass everything that we have seen in personal and mobile computing.
AI would be liberated from cyberspace to real space. Instead of shifting bits and bytes around, it would be moving physical objects.
JSW Steel’s Tumble: Untangling the Bhushan Power & Steel Supreme Court Setback
- JSW Steel Ltd (JSTL IN)‘s resolution plan for Bhushan Power & Steel was rejected by the Supreme Court, ordering its liquidation.
- The rejection undermines JSW Steel’s capacity expansion and investment plans, leading to significant financial and strategic setbacks.
- The ruling highlights the importance of strict adherence to IBC provisions and raises concerns over the predictability of large asset resolutions.
Source Rock Royalties : Consistent Returns Backed by Strong Fundamentals
- Source Rock is an oil and gas royalty company with interests in lands across Saskatchewan and Alberta.
- SRR has grown average daily production at a 16% CAGR since 2021, resulting in adjusted EBITDA growing at a 22% CAGR.
- Source Rock offers a >9% dividend yield which has grown at 2.5% annually since initiating the dividend in 2014.
Amazon 1Q’25 Update
- While Amazon’s 3P business usually grows faster than 1P, both 1P and 3P retail business grew at similar rate in 1Q’25.
- Ads revenue continued its momentum at 19% growth YoY which was higher than both Google and Meta.
- After growing at ~19% YoY for the last three consecutive quarters, AWS growth decelerated this quarter to 17%.
Otsuka Holdings (4578 JP): Rexulti Drives 1Q25 Result; Label Expansion And Acquisition Augur Well
- Otsuka Holdings (4578 JP) reported 12% YoY growth in revenue in 1Q25, as pharmaceuticals sales grew backed by a 35% YoY growth in Rexulti revenue to ¥75.7B.
- The company reiterated 2025 guidance. Higher costs to dent margins with subdued sales of Lonsurf, Jynarque.
- Indication expansion of Rexulti and Araris acquisition augur well for the company from a mid to long term perspective.
Hyperscale Capex Is Maintained or Increased No Cuts or Postponement Capacity Constrain at AMZN GOOG
- What did hyperscalers say on Capex in March conf calls? Amazon: nothing. Google: maintained. Meta: increase. Microsoft: maintained. No Capex cuts or postponement.
- At the opposite, Amazon and Google mention capacity constraints, revenues could be higher with more capacity. All firms mention that AI is a critical building block of future growth.
- Financial statements show 1) improving operating margins, 2) higher capex but still higher free cash flow. Positive for NVIDIA Corp (NVDA US) and Taiwan Semiconductor (TSMC) (2330 TT) .
Gilead Sciences: Cell Therapy Adoption & Expansion to Strengthen Its Competitive Position n Its Domain!
- Gilead Sciences delivered a mixed performance in their latest financial results, reflecting both strengths and challenges across their portfolio.
- The company reported overall product sales of $6.6 billion for the first quarter, a 1% decline year-over-year, primarily attributable to a significant decrease in sales of Veklury, a COVID-19 treatment, which was down 45%.
- The core business, however, excluding Veklury, demonstrated growth with a 4% increase, driven largely by their HIV segment and liver disease treatments.
Procter & Gamble (P&G) Looking To Turbocharge Retail Reach Through Channel Diversification But Will It Work?
- Procter & Gamble’s recent earnings results present a mixed picture of achievements and challenges.
- The company’s organic sales for the third quarter grew by 1%, which indicates modest growth.
- This increase was broadly underpinned by pricing strategies that added one percentage point to organic sales growth, while product volume and mix remained consistent with the prior year.
Whirlpool Corporation: Will The North American Market Dynamics Reflect Its Capability To Adapt To & Capitalize On Market Changes?
- Whirlpool Corporation has demonstrated a mixed financial performance in its latest earnings report, reflecting strategic advantages and challenges in the current macroeconomic environment.
- Organic growth of 2% marked a modest improvement, driven largely by strong performance in its Smart Design Asia Global and Major Domestic Appliance Asia sectors.
- The company achieved an EBIT margin of nearly 6%, reflecting successful pricing strategies and cost reductions, which helped weather macroeconomic headwinds.
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