Daily Brief Equity Bottom-Up: This Is Palantir’s Vision for Changing How the US Does Defense Spending and more

• Introduction to the Odd Lots Podcast with hosts Jill Wiesenthal and Tracy Alloway
• Discussion with guest Sean Sham Sankar, CTO of Palantir, about defense spending and technology
• Focus on the importance of data integration and human decision-making in the defense industry

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• CP ALL (CPALL TB) has seen a rout in its share price as investors worry that it may be drawn into investing in Seven & I Holdings.
• Indications suggest that if it was to invest, the stake would be much smaller than previously reported and it would likely come with some beneficial concessions.
• CP ALL (CPALL TB) continues to see a strong recovery in both sales and profitability, with a positive outlook for FY2025, whilst valuations have been compressed to attractive levels.

• Sify Technologies (SIFY US) is planning a Rs. 3,000 crore IPO for its data centre subsidiary, Sify Infinite Spaces, aiming to unlock significant hidden value and realign its market valuation.
• The IPO underscores rapid growth in India’s data centre market, driven by Digital India and 5G, offering a strategic edge with lower capital costs versus global peers.
• Investors can capitalize on a notable valuation arbitrage, as Sify’s data centre arm is vastly undervalued compared to the parent’s market cap, promising long-term upside.

• 1Q25 outlook is NT$140.8-151.8 billion, up 2-10% QoQ and up 6-14% YoY, with a GM of 47% ± 1.5%, beating consensuses. 
• Smartphone sales are +59% from 4Q24, increasing 14% QoQ but decreasing 1% YoY, attributed to the successful launch of the D9400, with healthy demand for smartphones and subsidy stimulation from China.
• GAI will continue to drive innovative changes in the industry, while MediaTek is evaluating the phenomenon’s effect on resource allocation. 

• Bank Mandiri saw a slower finish to the year despite strong loan growth and solid CASA growth, as expenses rose in 4Q2024 and slower recoveries impacted non-interest income.  
• Strong loan growth was driven by corporate and commercial lending with diverse sector exposure, as it continues to exploit wholesale relationships rather than increase risk, supported by CASA growth.
• The recent correction looks overdone given the outlook for 2024 looks positive, with loans expected to follow deposit growth in 2025, with credit costs under control. Valuations below historic levels.

• Amazon faced ~900 Mn FX headwind in 4Q’24 which was ~700 mn higher than assumed.
• For the third consecutive quarters, AWS grew 19% YoY. Ads grew by +18% YoY, and revenues in other segments increased by mostly High Single Digit (HSD) rate.
• I’ll discuss more about AWS later, but let’s talk more about Amazon ex-AWS first.

• ExxonMobil reported earnings of $34 billion for the year, marking its third-highest result over the past decade, despite facing softer market conditions.
• This financial outcome underscores ExxonMobil’s robust operational efficiency and strategic agility.
• The five-year average return on capital employed (ROCE) stands at an industry leading 11%.

• KKR and Gaw are in talks for a $660M sale of Hyatt Regency Tokyo to Japan Hotel REIT, potentially reshaping the hospitality market.
• Singapore worker housing rents have surged by 10.8% in the second half of 2024, attributed to a significant increase in labor influx.
• Despite falling rent trends in APAC office markets, Australia and Japan have shown resistance, according to Knight Frank’s report.

• Palantir Technologies Inc. saw a significant surge in its stock price following a robust earnings report that surpassed analyst expectations.
• The company projected full-year 2025 revenue of approximately $3.75 billion, exceeding the $3.54 billion consensus estimate.
• Adjusted operating income is anticipated to be around $1.56 billion, highlighting Palantir’s continued momentum in artificial intelligence and government contracts.

• Occidental’s Q4 revenue and EPS are expected to drop 2.6% and 9.5% YoY, with full-year 2024 declines of 3.8% and 10%, respectively.
• Occidental’s average realised worldwide oil price dropped by 7.4% QoQ and 11.6% YoY to USD 69.73/b. Conversely, its average realised global NGL price rose by 6.5% QoQ and 4.2% YoY.
• The STRATOS plant, one of the largest DAC projects globally, will begin operations by mid-2025. It is expected to capture up to 500,000 tonnes of carbon dioxide annually.