Daily Brief Equity Bottom-Up: TSMC (2330.TT; TSM.US): CoWoS Demand Continues to Increase in 2024. and more

• The yearly growth target could approach 25% YoY in 2024.
• TSMC’s CoWoS demand continues to rise, with capacity expected to increase by approximately another 5% in 2024.
• TSMC’s stock price has risen by 55% in Taiwan and by 66.3% in US markets this year. We believe it has the potential to continue increasing further.

• Due to increasing competition/price reduction/overcapacity issue, outlook of domestic vaccine companies isn’t optimistic, which has been reflected in 24Q1 results. However, there’s also a “special one” that deserves investors’ attention.
• The status of medical insurance funds is improving rather than deteriorating, but we’re currently in the first half of the decade with the highest pressure on medical insurance.
• As the H.R.8333 proposal faced obstacles in the process of being included in NDAA, WuXi AppTec/WuXi Bio’s shares once rebounded.We remain conservative as situation is not as simple as imagined.

• Mediatek Inc (2454 TT)’s 3Q24 is expected to experience a quarter-on-quarter increase of about 5%.  
• MediaTek is currently developing new processors based on Arm architecture and natively supporting the Microsoft Windows operating system.
• It is believed that MediaTek will tape out with TSMC 3nm technology, targeting the 1H25 market.

• 4Paradigm, China’s AI software company with focus on enterprise-level solutions, performed well and achieved solid growth in 2023 and Q1 2024. 
• In my insight, I discuss valuation framework for comparable company analysis and set a new 12-month PT for 4Paradigm.
• The company’s management has set a clear goal of profitability. I like 4Paradigm’s leadership position and hyper-growth in revenue from the Sage AI Platform.

• European Commission will impose provisional tariffs on imported Chinese battery electric vehicles.
• Zeekr’s deliveries increased by 117% YoY in 1Q24 and by 112% YoY in the first five months of 2024.
• Ant Group will pay RMB1 billion to sponsor content creators on AliPay.

• China Railway Signal & Communication (3969 HK)‘s latest order backlog is estimated to be Rmb173.7bn, enough to cover FY24F revenue by 4.4x.
• Gross margin has sustained expansion, reaching a record high of 27.8% in 1Q24. Higher R&D expenses will benefit its medium-term earnings.
• Net cash equals 59% of the share price, allowing it to maintain over 50% payout and potentially higher going forward. Operating cash flow has also turned around to positive.

• NVIDIA deploys a three-pronged strategy to support the rapidly growing AI ecosystem. First, Corporate Investments. Second, NVentures. Third, NVIDIA Inception.
• NVentures supports innovators who are deeply relevant to NVIDIA. NVentures aims to produce solid financial returns while growing the ecosystem.
• NVIDIA participated in 35 deals in 2023 (6x more than in 2022). It has been more active than firm like Andreessen Horowitz and Sequoia.

• Sun Corporation is trading at 40% of its net asset value and has valuable SaaS business with Cellebrite
• Activist investor involvement may unlock trapped value in the company
• Cellebrite is a top digital forensics platform serving law enforcement agencies, making Sun Corp a promising investment choice in the Japanese market

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Ascentage was originally in an extremely difficult situation, but the cooperation with Takeda turned things around. Ascentage has obtained urgently needed cash flow to solve the survival problem.
• At this stage, it’s possible for Ascentage to hit about 50% market value of HCM.  Investors are interested to know if APG-2575 would also be out-licensed, which however is not easy.
• Ascentage’s current strength isn’t sufficient to self-build sales system. While this deal is a good start, if Ascentage still chooses to do commercialization on its own, it’s time to sell. 

• We conducted a Q&A with Kinik, who is a key supplier to companies including TSMC, UMC, and Micron.
• Kinik is dramatically expanding its diamond disk capacity; these products are critical to the production of wafers for advanced semiconductor nodes.
• We believe Kinik has high visibility into future industry demand. Gross margins are likely to expand in the coming years as advanced diamond products become increasingly important to wafer production.