Daily Brief Equity Bottom-Up: TSMC and more

• AI demand will remain strong but is plateauing in terms of YoY growth. The rest of end-demand remains weak (Consumer, PC, Auto, Industrials). TSMC and UMC monthly sales confirm this. 
• TSMC high growth plateau ~40% YoY: AI (Nvidia Broadcom, AMD), Intel, new smartphone chips. Comps will get harder early 2025. Valuations are high but not extreme: limited upside and downside.
• UMC lackluster at ~6% YoY growth, reflecting lackluster end-markets from smartphone, Consumer Elec, PC, Auto & Industrials. Average valuations; in need of an elusive catalyst.

For our next Corporate Webinar, we are glad to welcome Kina Bank’s executive management to Smartkarma. In the upcoming webinar, they will share a short company presentation after which, they will engage in a fireside chat with Smartkarma Insight Provider, Daniel Tabbush. The Corporate Webinar will include a live Q&A session.

The Corporate Webinar will be hosted on Tuesday, 15 October 2024, 17:00 SGT.

About Kina Bank

Kina Securities Limited (Kina Bank) was established in 1985 and is now Papua New Guinea’s second largest bank and financial services company.  It offers customers end-to-end financial solutions – from savings accounts to business loans, investments to mortgages, financial advice and investment management. It is also the largest wealth management business in PNG, with more than PGK8 billion funds under management. As the country’s largest fund administrator, it administers accounts on behalf of more than 850,000 beneficiaries whose funds total almost PGK14 billion. Kina Bank is also the leading stockbroking company in PNG. 

• For 2nm technology, Taiwan Semiconductor (TSMC) (2330 TT) should start Apple (AAPL US) iPhone 17 production in the middle of 2025, most likely.  
• TSMC’s competitors, Samsung Electronics (005930 KS) and Intel Corp (INTC US) are running foundry business and keeping owning manufacturing business at the same time, which is contradictory to purely foundry business.
• To making the advanced chip in the US, we consider the main main concern still the cost.

• This is a follow-up research note on MoneyHero Group, a company that has firmly positioned itself as a rising star in Southeast Asia’s fintech landscape.
• The company boasts of remarkable results in Q2 2024.
• With revenue surging by 24% year-over-year (YoY) to $20.7 million, driven largely by a massive 68% revenue growth in its Singapore market, MoneyHero is rapidly emerging as a dominant force in the personal finance and digital insurance aggregation space.

• The earnings for Tempur Sealy in the second quarter of 2024 presents a mixed financial outlook, characterized by both positive achievements and challenging market conditions.
• The company reported a notable increase in net sales which approximate $1.2 billion, and adjusted EBITDA stood at $231 million, marking a year-over-year improvement of 6%.
• Adjusted earnings per share also saw growth, rising 9% to $0.63, alongside an improved leverage ratio.

• Gaming Award nominations could spark sales lift into key holiday selling season   
• Highly watched Industry Scores are moving higher for FF7 Rebirth. FF7 Rebirth moving higher up key US gaming charts
• Five CQ4 release titles could drive revenues higher from recent lower reset. Big valuation discount and balance sheet opportunities exist

• Embattled Kiwi building materials giant announced emergency fundraise in September
• Accounting quality has deteriorated significantly in recent years, AI tool shows
• Share price is a quarter of its 2007 peak, company leadership is in flux

• Nanya Tech’s 3Q24 results missed expecations by a wide margin, coming in with a net loss instead of the consensus expectation for a profit.
• Nanya highlighed weakness in non-AI end applications for memory and cut its 2024E Capex guidance by nearly 25%, signaling caution towards the current market cycle.
• While the company’s new DDR5 capacity ramp-up should support stronger margins into 2025E, Nanya has yet to show a signifcant margin upturn in the cycle. 

• Mattel’s second quarter of 2024 presented a mixed set of results, reflecting both the challenges and strategic progress within the toy industry.
• In terms of financial performance, net sales slightly declined by 1% but were stable on a constant currency basis.
• This relatively flat sales trajectory indicates a degree of resilience amidst broader economic fluctuations, with the company managing to maintain its sales levels year-over-year.

• Cavco Industries, Inc.’s first quarter fiscal year 2025 earnings call commenced with the routine formalities.
• Bill Boor, President and CEO, detailed the company’s continued improvement in the factory-built housing sector, underscored by a significant 25% sequential increase in orders and a corresponding 20% hike in shipments.
• These metrics are encouraging indicators of robust market demand and operational execution.