Daily Brief Equity Bottom-Up: TSMC (2330.TT; TSM.US): 2024 Top Clients and more

• TSMC’s top 5 clients for 2024 are Apple (AAPL US), Advanced Micro Devices (AMD US, Qualcomm Inc (QCOM US), Mediatek Inc (2454 TT) and NVIDIA Corp (NVDA US).
• Smartphone orders continue to dominate at TSMC, with QCOM and MediaTek being key clients.
• Looking ahead to 2025, Intel Corp (INTC US) is expected to rely more on TSMC, potentially leading to changes in TSMC’s client ranking.

• PDD Holdings (PDD US) stock price nosedived 28.5% yesterday wiping away more than USD55 billion in market cap following Management’s call with investors.
• During the call, the management guided towards weakening profits in the next quarters and stated that high revenue growth was unsustainable in the long term.
• Investors however seemed to be spooked not by negative guidance on profitability/growth but by comments on impact of non-business factors and need to adapt to changing times etc.

• NVIDIA’s dominance in AI GPUs, with 80% market share, has driven data center revenue growth by 427% YoY, with analysts expecting a 112% YoY revenue increase to $28.68 billion.
• NVIDIA’s GPUs are crucial for AI workloads, with significant adoption by cloud giants like AWS and Microsoft Azure. AI-specific chips are expected to drive 40% of 2024 revenue.
• 47 out of 61 analysts rate NVIDIA a strong buy, with average 12-month price targets showing 13% upside, reflecting confidence in its AI leadership despite potential market volatility.

• In 2Q24, total revenue increased by 14% YoY and hotel booking revenue increased by 20%.
• We believe the company has been riding on the recovery of the travel market and will see historical high quarter in 3Q24.
• We also believe the stock still has an upside of 18% after one day’s surge.

• 1H24, Nongfu’s revenue growth rate fell to 8% YoY, because Wahaha launched a propaganda against Nongfu.
• We believe the revenue growth will rise in 2H24 and 2025, as it seems that the public do not like the way Wahaha use.
• We set an upside of 26% and a price target at HK$38 for the end of 2025.

For our next Corporate Webinar, we are glad to welcome RemeGen’s Chief Financial Officer, Mr. Tong Shaojing.

In the upcoming webinar, Tong will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Eric Wen . The Corporate Webinar will include a live Q&A session.

The Corporate Webinar will be hosted on Thursday, 19 September 2024, 09:00 SGT.

About RemeGen

RemeGen was cofounded in 2008 by Mr. Wang Weidong, founder of Rongchang Pharmaceuticals, a leading traditional Chinese medicine company in China and Dr. Fang Jianmin, a Canadian-American scientist. Headquartered in the coastal city of Yantai Shandong Province of China, RemeGen has research labs and offices throughout China and the United States. RemeGen is committed to the discovery, development, and commercialization of innovative and differentiated biologic drugs of significant clinical value in the key therapeutic areas of autoimmune oncology and ophthalmic diseases.

• ETF flows in the Asian region continued their positive momentum during August with Southbound Connect positive again for the week.
• Stella International (1836 HK) will increase its dividends and buybacks after positive earnings surprise. AIA Group Ltd (1299 HK) saw a surge in new policies from mainlanders in HK.
• Lufax Holding (6623 HK) reported an earnings miss with declining loan volume. Yancoal Australia (3668 HK) reported a decline of 57% in earnings which was below analysts’ estimates.

• Intel Corporation, once the undisputed leader in the semiconductor industry, is currently grappling with a series of challenges that have significantly impacted its market position and share price.
• Amidst these struggles, Intel is reportedly working with advisors like Morgan Stanley to prepare a defense against potential activist investors, a clear signal of the growing pressure the company faces.
• The need for such a defense highlights the precarious situation Intel finds itself in—a company in the throes of operational difficulties, financial underperformance, and strategic missteps.

• BIDU reported C2Q24 top line, non-GAAP operating profit and GAAP net income inline, 5.6% and 7.6% vs. our estimate and inline, 10% and 8.4% vs. consensus. 
• Weak economy is only part of the problem. Weak monetization exists across the entire product line. 
• We cut the TP to US$80 and reiterate SELL rating.

• Advanced Micro Devices (AMD) has made headlines with its recent acquisition of ZT Systems for $4.9 billion, a move that signals the company’s intent to become a formidable force in the AI space.
• As the industry leader, NVIDIA has long dominated the AI hardware market, but AMD’s latest strategic acquisition could shift the competitive landscape.
• This acquisition is not just about expanding AMD’s capabilities; it’s about positioning the company as a viable alternative to NVIDIA in the rapidly growing AI infrastructure market.