Daily Brief Equity Bottom-Up: Primer: GigaDevice Semiconductor (603986 CH) – Dec 2025 and more

• GigaDevice is a leading Chinese fabless semiconductor company, holding a dominant position in the domestic SPI NOR Flash market and rapidly expanding its presence in the microcontroller (MCU) sector.
• The company is a key beneficiary of China’s strategic push for semiconductor self-sufficiency, which provides a long-term tailwind for domestic market share gains across its product lines.
• While demonstrating strong long-term growth, the company faces significant risks from the inherent cyclicality of the semiconductor industry, intense global competition, and geopolitical tensions between the US and China.

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• Q2 FY26 showed healthy spend growth but structurally weak profitability, with yield compression, elevated credit costs, and higher OpEx offsetting sharp funding-cost relief
• Portfolio mix skewed toward transactors and EMI-led spends drove lower interest-earning assets, capping NIM at 11.2% despite a 69 bps QoQ drop in cost of funds.
• Credit costs remain materially above historical levels, with heavy write-offs keeping ROE anchored in the low-teens and limiting near-term earnings recovery.

• Ola Electric (OLAELEC IN) since its IPO has been under scanner. The management presented a very optimistic narrative in Q1FY26, hoping to turn tides, increase volumes, along with better profitability.
• As things stand, volumes continue to hit new lows, market share continues to tumble and the new narrative of Auto EBITDA positive could possibly be an eye wash.
• The company’s strategic mismanagement is unmasked and and with internal controls disappearing . Ultimately, the promoter sell off could be a final nail in the coffin.

• Context: The Yes Bank (YES IN) vs. IDFC First Bank (IDFCFB IN) price ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
• Highlights: Going long Yes Bank (YES IN) and short IDFC First Bank (IDFCFB IN) targets a 6% return.
• Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.

• On October 1, Texas-based startup Fermi raised $682.5 million through the sale of 32.5 million shares at $21/share in a remarkable dual listing on both the NASDAQ and LSE
• The company claimed to have a prospective first tenant who had already “put down” a $150 million prepayment
• On December 12, Fermi issued a SEC filing clarifying that no money had been drawn down and the the prospective tenant had terminated their agreement. Currently trading @ ~$9/share

• Huge beat in Nov-25 and Feb-26. The impact of price hikes (Commodity Memory), mix change (more HBM and server) driven by AI growth and low capacity increase. 
• Management is cautious on bit growth but very positive on 2026-28 outlook. HBM sold out for ‘26. Shortages continue in ’26-27. HBM market to increase ~3x by ‘28.
• Consensus should revise up FY26 by ~60%, FY27 by ~80%. This implies that the stock trades at 7.5x FY26 EPS and 5.4x FY27. 

• JAPEX buys Verdad for USD 1.3bn, gaining operated DJ Basin oil exposure and shifting away from LNG-style earnings.
• FY27 operating profit uplift is ~¥14–20bn depending on WTI vs ¥35bn FY26 base.
• Strong balance sheet and +11–12% stock reaction support a valuation re-rating toward 3.5–4.0× EBITDA.

• Abercrombie & Fitch reported its twelfth consecutive quarter of growth, achieving record net sales of $1.3 billion, an increase of 7% from the previous year.
• This growth showcased a balanced performance across regions, with notable success in the Americas and EMEA, despite challenges in the APAC region where sales declined 6%.
• The company also managed to increase its gross margin to 62.5% amidst a 210 basis point adverse impact due to tariffs.

• Micron management only meeting 55-60% of core customer memory demand, with the supply crunch set to last for all of 2026.
• Trump Media and Entertainment looking to merge with nuclear fusion firm TAE technologies as the US scrambles for ways to power its rapid AI data center expansion   
• KB Homes numbers miss as high interest rates continue to weigh on order outlook for new homes. 

• In this edition: • Ahold Delhaize | to close six e-commerce fulfillment centers by the end of 1Q26 • ASML Holding | Chinese rumoured to have copied an EUV machine • SBM Offshore | extends contracts for 2 FPSOs and completes sale FPSO Aseng • Sif Holding | affirms 2025-2026 outlook • Dutch politics | coalition talks: significant policy divide on fiscal discipline