Daily Brief Equity Bottom-Up: TSMC (2330.TT; TSM.US): The Outlook of 3Q24 Is Pretty Much In-Line and more

• TSMC expects sales to grow by mid-20% YoY in USD in 2024, compared to low to mid-20% previously.
• The N3/N5 capacity is very tight, and they are even working with customers for 2026 capacity requirements, while N2 is on track to enter MP in 4Q25.
• A16 will enter MP in 2H26, and it’s first process starts adopting backside power.

• Significant revenue guidance hike — TSMC reported 2Q24 results, increasing 2024E revenue growth guidance to exceed ‘mid-20’s’ percent, a significant hike from previous guidance.
• Management is low-balling LT margins — Latest figures and long-term margin color makes us believe that TSMC will be able to increase GM much higher than current official LT guidance.
• Signs of Apple expecting strong iPhone 16 sales — TSMC reported strength in smartphone end-applications and we believe this is reflective of Apple ramping up re: stronger iPhone volume expectations.

• Kyoto Financial’s stakes in three key listed Japanese corporates are valued at over 85% of its market capitalization with its total equity holdings accounting for 130%+ of its market capitalization
• Kyoto management intends to retain the bulk of the bank’s equity holdings, opposing the growing trend for Japanese listed companies to unwind crossholdings; management will review this policy in November
• In the near term, we see no major catalyst for Kyoto to accelerate its equity holdings unwind and so, combined with its underwhelming fundamentals, we are negative on Kyoto Financial

• Mount Gibson Iron (MGX AU) reported a disappointing Q4 FY24 production report. Volumes were inline, but provisional pricing impacts of ~20% brought a quarterly cash outflow of one mn AUD.
• Volume guidance for FY25 was light at 2.7-3 mn tons (vs. 4.1 mn in FY24). Net Cash rose to 436 mn AUD (excluding Fenix Investment), almost equaling the market cap. 
• FY24 results are due on 21st August 2024, when the board will recommend a dividend. Net cash and future cash flows should support the share price in the long run.  

• American Water started 2023 with promising financial results, as its earnings per share (EPS) rose from $0.91 to $0.95 compared to the same quarter last year.
• This increase was anticipated, aligning with the company’s forecast and sustaining its full-year earnings guidance.
• Noteworthy contributing factors include the $0.02 per share rise stemming from additional interest income, linked to amendments in the seller note related to the HOS sale.

• Dalrymple Finance report examines financial structure of Brookfield Infrastructure Partners managed by Brookfield Asset Management
• Report raises concerns about fee maximization practices that may not align with interests of limited partners
• Comparison with sister entity launched in 2023 highlights flaws in BIP’s financial policies, suggesting a unsustainable pyramid scheme structure

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.

• Latest fare data suggests an incrementally more concerning trend for Ryanair pricing from June.
• Concerns over pricing continue to increase in Europe, following Lufthansa’s profit warning last week.
• We cut our FY25 net income by 9% to €2,289m albeit remain above consensus of €2,170m.

• Mediatek Inc (2454 TT) is forecasted to experience slight growth in 3Q24 compared to 2Q24.  
• Qualcomm Inc (QCOM US) is expected to introduce AI PCs in 2024, while Mediatek Inc (2454 TT) scheduled for this product is anticipated to delivered in 2H25.  
• The shipment forecast for the Dimensity 9400 is approximately 5 million sets in 2H24.

• Author admires Brad Jacobs’ entrepreneurial success but questions high valuation of SilverSun Technologies
• Conversion of SSNT into stake in QXO implies optimistic market capitalization of $46 billion
• Author remains skeptical of QXO valuation despite Jacobs’ successful track record

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.

• XPeng and Baidu leading China’s autonomous driving technology advancements in 2023
• Malaysia’s semiconductor sector set for growth in 3Q24 with talent recruitment and AI integration
• Singtel partners with SK Telecom for 6G and AI innovation, while automakers persist in V2X development efforts