Daily Brief Equity Bottom-Up: Asian Equities: Valuation Mean Reversion – The Winners and Losers and more

• 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

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• 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.