Daily Brief Equity Bottom-Up: Episode 106: Apple C1 Modem! More Intel Rumors (FUD!) Previewing Nvidia Earnings and more

• iPhone 16e starting at $599, positioned as entry level but not bare bones
• Apple targeting customers who hold onto phones for a long time with best battery life in any iPhone
• Modem C1 upgrade seen as key contributor to improved battery life, but was not highlighted in launch, raising questions about performance quality

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• Lite On Signals for Continued Strength in Cloud/AIOT Ahead of Upcoming Nvidia Results
• Lite On’s 1Q25E Outlook Was Positive and Did Not Indicate A Near-Term Slowdown
• Industry Take-Aways — Still No Signs of Acceleration on PC/Consumer… However Signals Cloud/AIoT Demand Healthy

• Trump administration wants TSMC to partner with Intel to strengthen US ties, potentially impacting global server market.
• WNC to unveil new 5G and AI connectivity solutions at MWC 2025 Barcelona, boosting industry innovation and technology.
• Vivo aims for 30% sales growth in Taiwan by 2025 with V50 launch, while Tata plans to sign 10 MoUs in semiconductor sector.

• Nvidia has been the unrivaled darling of the AI boom, establishing itself as a portfolio must-have, and is now the second-most valuable company in the world. 
• Wafer-Thin AI chips are the company’s biggest earnings driver, but Nvidia is growing in other high-margin segments too, including software, gaming, and automotive.
• Here’s what makes this company important, what to expect next from the tech giant, and – most interestingly – what Nvidia’s stock is really worth.

• We compile our selection of small-cap companies based on our desired characteristics: insider buying, value, near term growth triggers and margin of safety.
• Out top picks are Sarla Performance Fibers Ltd (SRPL IN) , Quess Corp Ltd (QUESS IN) , and GNA Axles Ltd (GNA IN)
• Given the steep correction in small and mid-cap Indian stocks, all the mentioned companies have seen active insider buying in recent weeks.

• The headline Indian mid cap indices are still expensive, despite a sharp decline since late September. However, when adjusted for growth, many fundamentally attractive mid-caps are cheap.
• We screen mid-caps with PEG<1.3x, consensus Buy recommendations and increasing consensus EPS estimates over the past six months. We choose well-covered stocks so that the consensus estimates are meaningful.
• Our basket of 20 contains six financial stocks, five materials, four industrials and three consumer discretionaries. Many pertain to the themes of renewable energy, data centers, healthcare, tourism and infrastructure.

• A high hurdle for OP in Q1 – Q1 FY9/25 results showed normalisation of OP growth as the one-off impact from a large order for AD (autonomous driving) / ADAS (advanced driver assistance systems came off compared to Q1 FY9/24.
• As a result, Toyo Corporation reported an operating loss, normalising to more ordinary performance for Q1 when OP tends to be weak due to seasonality.
• Notwithstanding the seasonal loss, the Q1 FY9/25 results were in line with the company’s initial plan. 

• Saudi Aramco’s Q4 revenue is expected to fall 2.6% QoQ but rise by 10.6% YoY, while its EPS is anticipated to drop 7.5% QoQ and 11.9% YoY.
• With OPEC likely extending supply cuts past April 2025, Saudi Aramco has little room to raise output, leaving growth largely dependent on oil prices.
• Aramco acquired a 25% stake in Unioil Petroleum Philippines, expanding its retail presence, and partnered with Linde and Schlumberger to develop a major CCS hub.

• Digital Realty is a global data center player across all major markets.  The DC demand will be back by secular trends including AI, Cloud and enterprise digitalization
• DLR’s focus on pricing, development pipeline and balance sheet enables it to achieve long-term sustainable growth, delivering a mid single digit FFO growth
• We also think DLR has maintained a strong balance sheet.  DLR is still in the process of de-leveraging with healthy credit metrics

• Posco International Corporation (047050 KS) and SeAH Steel Holdings (003030 KS) are two key beneficiaries of the Trump administration’s efforts to significantly increase the Alaskan gas fields.
• The initial estimated cost of this massive project is about $44 billion for the pipeline and related infrastructure.
• Despite recent rallies, the valuations of POSCO International and Seah Steel Holdings remain attractive.