Daily Brief Equity Bottom-Up: Intel 18A Not Ready for Foundry (Preparing for Bad News?) and more

• The real point of Reuters’ article on Intel CEO “new” Foundry strategy is, imo, to pre-announce the possibility of a very large write off 
• TSMC discontinues GaN doesn’t matter, it’s not even 1% of revenue. 1) Auto demand is slow, GaN is lower margins, lot of competition  2) management has better things to do 
• UMC 6nm rumor, maybe yes but most likely with Intel’s manufacturing after 2030. UMC and Intel first start with 12nm in 2027-28.

• Puregold Price Club (PGOLD PM) is now the largest groceries company by market share in the Philippines, recently overtaking SM Retail, through its Puregold and S&R Warehouse stores. 
• The company’s S&R Warehouse is a members-only big box retailer aiming at more affluent consumers, whilst Puregold stores cater for both Sari Sari (mom&pop) and less affluent consumers. 
• Puregold Price Club booked a solid start to the year, despite seasonal disruptions, with management remaining confident about the outlook for FY2025. Valuations are attractive. 

• Mitsui & Co. has delivered robust earnings and cash flows, fueled by commodity tailwinds and disciplined capital returns over the last 5 years.
• Looking ahead, the company plans to rebalance its portfolio through increased exposure to LNG and energy transition assets 
• However, muted near-term growth and persistently low ROCE—driven by scattered, low-control holdings—suggest limited upside until newer investments begin contributing meaningfully to the bottom line.

• The culture of trading has shifted, with people enjoying losing money and constantly looking for prices on various assets
• Robinhood caught the wave of this cultural shift with its user-friendly interface and introduction of free stock trading during the pandemic

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• On Monday, June 30, Meta CEO Mark Zuckerberg announced the creation of Meta Superintelligence Labs, staffing it with a host of leading researchers from the likes of OpenAI and Google 
• With astronomical hiring bonuses and lucrative compensation packages, this newly assembled team will struggle to gel and likely drive an exodus of existing Meta AI employees elsewhere
• Yann LeCun is sidelined in the MSL memo. He believes LLMs are not the way to achieve human-level AI. It appears that Mark Zuckerberg disagrees. Let’s see…

• A global perspective on what happened overnight

• On 2 July, Cosmecca Korea (241710 KS) announced that it plans to switch its listing from KOSDAQ to KOSPI. Cosmecca Korea is the third largest cosmetics ODM company in Korea.
• Cosmecca Korea’s ROE is similar to the average ROE of the comps. However, Cosmecca Korea’s P/B valuation is 36% discount to that of the comps.
• By switching its listing from KOSDAQ to KOSPI, there is an increasing probability of the Cosmecca Korea receiving higher valuations, narrowing the gap with its peers. 

• Update on changes to and revisions of analysts’ Best Ideas and Conviction Calls, as well as Model Portfolio compositions

• Karnataka Bank (KBL IN)‘s top two executives resigned under unclear circumstances, with boardroom friction, unauthorized spending, and weak financial performance raising concerns.
• Even audit report also suggests some red flags of minuscule amounts in unauthorized expenses, raising governance issues.
• The bank’s leadership shakeup and declining financials suggest instability; while governance reforms are needed along with new and strong leadership and governance realignment.

• China Travel International Investment Hong Kong (308 HK)‘s 1-week share price rally was driven by restructuring speculations. Yet, underlying operations have improved in 2H24.  
• Tourist attractions and hotel operations will stay decent in FY25, and more projects will come on stream to fuel profitability.
• Asset-Based valuation should be the focus, and its 0.49x P/B is inexpensive. Net cash now equals 8.2% of the share price.