In today’s briefing:
- TSMC. Robust Defence Of Process Technology Leadership
- Taiwan Dual Listings Monitor: Sharp Premium Drops Most Recently; Key Levels to Long or Short
- Topsports (6110 HK): High Dividend Yield Supported By Strong Free Cash Flow
- Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – October 2023
- Taiwan Tech Weekly: Watch for Intel, Microsoft, Mediatek, ASE, UMC Results; AI Names Top Losers
- Delta Taiwan Vs. Thailand Monitor: Market Cap Metric Breaches Key Level For 1st Time Since Dec 2022
- Gushengtang (2273.HK) – 2023 Full-Year Performance Would Exceed Expectations
- Thai Banks 3Q23 Screener; Stick with Krung Thai and Ayudhya
- Monthly Chinese Express Tracker | A New Price War Among China’s ‘Sort & Transport’ Express Names
TSMC. Robust Defence Of Process Technology Leadership
- Q323 revenues of $17.28 billion. In US$ terms, this represented a 10.2% increase QoQ, but still down 14.6% YoY.
- TSMC’s forecasted Q423 revenues of $19.2 billion at the midpoint, representing a 10% QoQ increase
- CEO C.C Wei robustly rebuffed Intel’s popular claim to be on track for process technology leadership by 2025
Taiwan Dual Listings Monitor: Sharp Premium Drops Most Recently; Key Levels to Long or Short
- Premiums have generally fallen sharply most recently, likely driven by weaker global markets.
- Key earnings: TSMC reported last week; UMC and ASE to report this week.
- We describe our latest recommended premium/discount levels to Long or Short the spreads.
Topsports (6110 HK): High Dividend Yield Supported By Strong Free Cash Flow
- Topsports International Holdings (6110 HK) announced first half FY24 (fiscal year ending February) results last week, with net profit up 17% yoy.
- The company trades at a 7% dividend yield, backed by strong free cash flow.
- The stock is not only a yield play, but also a call option on the recovery of Nike and Adidas’ retail performance in China.
Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – October 2023
- We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
- Our top picks are Perfect Medical Health (1830 HK), Water Oasis (1161 HK), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and The Keepers Holdings (KEEPR PM).
- We add the Philippine Stock Exchange (PSE PM) and Ginebra San Miguel (GSMI PM) to our list of names that we look at after our recent Philippines trip.
Taiwan Tech Weekly: Watch for Intel, Microsoft, Mediatek, ASE, UMC Results; AI Names Top Losers
- This week will see a wave of earnings releases for the industry including Intel, Microsofot, Mediatek, ASE, and UMC.
- TSMC results last week provided positive color on the 2024E onwards outlook for the company as well as comments regarding a turn around for PC and mobile.
- Taiwan AI names were some of the top losers across our Taiwan Tech universe last week.
Delta Taiwan Vs. Thailand Monitor: Market Cap Metric Breaches Key Level For 1st Time Since Dec 2022
- Delta Thailand shares haven’t recovered from their sharp drop at the end of September, which happened after the parent Delta Taiwan sold a stake in the Thai subsidiary.
- Delta Thailand shares fell to the point that its market cap finally became smaller than Delta Taiwan, for the first time since December 2022.
- Delta Thailand’s market cap should be substantially smaller than its parent Delta Taiwan. We analyze what history tells us the further relative downside for Delta Thailand could be.
Gushengtang (2273.HK) – 2023 Full-Year Performance Would Exceed Expectations
- 3Q23 is expected to achieve over 40% YoY growth. 2023 overall performance would be better than previous guidance- Revenue up 40+% YoY and adjusted net profit up about 45% YoY.
- With abundant cash flow, Gushengtang has increased dividend payouts and share buyback, indicating that the current stock price is undervalued and has not yet reflected its high growth expectations/healthy fundamentals.
- Gushengtang has cross-regional expansion capability. The “sustainability” + “high growth” of performance are worth noting. Depressed sentiment/complex external environment provide a good buying opportunity. Rebound in stock price is expected.
Thai Banks 3Q23 Screener; Stick with Krung Thai and Ayudhya
- Krung Thai ranks second from top in terms of post-provision profitability and it has double digit ROE with a healthy balance sheet, along with attractive PBV and PE ratios
- We also like Ayudhya, with its sound pre and post-provision profitability metrics with healthy ROE and ROA, its sound credit quality metrics and undemanding valuations
- Kasikorn’s TTM cost of risk remain high versus the peers, and in 3Q23 it continued to worsen; its pre-provision profitability is healthy but there is, as yet, no CoR improvement
Monthly Chinese Express Tracker | A New Price War Among China’s ‘Sort & Transport’ Express Names
- In this month’s Tracker, we focus on a new price war among the ‘sort & transport’ names
- Q3 ASPs at these express companies fell by -12% Y/Y, and volume growth softened
- We believe margins are under increasing pressure in China’s mainstream express segment
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