Daily Brief TMT/Internet: Tencent, Satyam Computer Services, Intel Corp, Samsung Electronics, Alphabet , Hang Seng Index, Baidu, Taiwan Semiconductor (TSMC), Silergy Corp 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

• 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.

• Lee Bok-hyun, FSS Chairman, unexpectedly reversed his stance and now opposes Choi’s veto on the amendment, pushing for shareholder protection and adjustments in subordinate regs instead.
• From a short-term trading angle, traders will focus on stocks with high volatility potential related to auditor appointments rather than the extension of directors’ fiduciary duties to shareholders.
• Large-Cap banks and non-bank stocks, with low controlling stakes and high foreign ownership, are likely to see significant short-term trading impact.

• 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

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• HSI has surged past SPX, but past instances of strong outperformance have often preceded reversals. We examine key historical trends.
• The YTD divergence between HSI and SPX calls into question whether this is another temporary rally or the start of a new trend.
• We highlight some key hedging strategies to manage risk in this evolving market dynamic.

• 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.

• 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.

• 2025 outlook Sales: up 20-30% YoY. More certain on China demand recovery. Gradually enters Mass-Production (MP) for Gen 3/4 products. Main growth drivers are consumer and Electric Vehicle.  
• Silergy targets for auto sales contributed to reach 15% in 2025.  
• Will witness a rebound in 2Q25 for computing and Consumer and auto will also grow QoQ given resumption for production in China.