BUY APPLE AHEAD OF EARNINGS

Long from $163.27
BETA - 1.25
MARKET CAP - 879.07B
P/B - 6.29
DEBT/EQUITY - 0.74
EARNINGS YIELD - 6.56%

- iPhone is 100% the main piece behind the fortune of the company. Although demand for it's latest tenth anniversary iPhone X - has been less satisfactory. The iPhone plays an a very important role in expanding the iOS ecosystem. The device also plays a crucial part in Apple's growth into emerging markets like China and India.
- Apple has been undergoing lots of projects to boost growth/presence in India. The second largest country by population is obviously a huge market and has lots of scope to grow - it presents an attractive opportunity for Apple given it's younger population and increasing investment in the 4G network. The country's FDI policy also benefits the company as it gets rid of the requirement to locally source products for at least a three-year period. This enables Apple to open solely-owned retail stores in India. Apple has partnered with Bharti Airtel and Reliance. Apple will be looking to get a bigger share in India with its cheaper phones like the iPhone SE. Apple is setting up development centres in India to accelerate the development of maps and to boost app growth. It has also set up its first manufacturing unit in Bangalore, Kamataka and has teamed up with Wistron Corporation from Taiwan to manage the assembly of the iPhones.
- In regards to the largest country by population, China still remains an important market for Apple - given the number of middle-class customers. Even though the last couple of quarters have been affected by sluggish growth, the company remains optimistic about the long term growth prospects of the tech-loving region, especially with a growing middle class a push to the iPhone X. Apple is setting up a new R&D centre at Shenzhen manufacturing hub and it appears to have secured a board seat at DidiChuxing.
- Apple continues to prove its edge in the revolutionary apps it offers - Apple Pay, Apple Watch, Apple Music and Apple TV. These enable an unmatched user experience and include large revenues from internet services. App Store, Apple Music, AppleCare, Apple Pay, licensing and other services have been a catalyst. What will be the next revolutionary idea!
- They are looking to venture into original programming. (They are willing to invest 11B)

Our main concerns would be the increasing regulatory hassles in Europe and continue to see uncertainty surrounding Brexit and that it is involved in various legal battles over its tablets and mobile phones.

NeroTree Capital rates Apple Inc as a BUY with a price target of $200 over a 52w period.
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