Daily Brief Equity Bottom-Up: TSMC. Take The Pullback Gift and more

• TSMC guided Q324 revenues of $22.8 billion at the midpoint, up 9.5% QoQ and up 32% YoY
• Increased full year guidance to be above mid-20% YoY growth in US dollar terms
• Share price has declined ~14% from its 52 week high but still up >2x from its 52 week low. Many will view this pullback as a gift, we certainly do…

• ASML’s results last week indicated continued strength in the semiconductor industry. We analyze the results to identify any potential signs of weakening or pauses in global industry momentum for Taiwan.
• Net system bookings surged 54% QoQ and ASML reported rising utilization levels of its clients’ equipment. Inventory days rose significantly, but this is due to upcoming 2025 orderbook deliveries.
• New US, Europe, and Japan fabs bolster strong revenue outlook into 2026E. Overall, robust industry demand persists according to ASML’s latest data, with no major signs of softness.

• Taiwan Stocks Fall On Potential New U.S. Tech Restrictions for China & Potential Policy Shift from a Trump White House… Strong TSMC & ASML Results Fail to Rally the Sector
• Even Tighter Technology Restrictions for China?  — US Could Use Special Rule to Restrict Selling of Products Made by Foreign Companies
• We See TSMC’s Margins Increasing Much Higher Than Guidance in Long-Term; 2Q24 Shows Apple Ramping Up 

• Xiaomi Corp (1810 HK)‘s smartphone shipments to India surged in Q2 2024, reclaiming the top spot, while Samsung slipped to third.
• Consumer discretionary sales, including smartphones, were weak during the quarter due to elections, subdued demand, and extreme weather.
• The upcoming festive season is crucial for sales, with customers anticipating new launches and better bargains. 5G device upgrades continue to drive growth in 2024.

• Com2Us’s net cash (including long-term financial investments) is 151% of its market cap. It is trading at P/B ratio of only 0.45x. 
• The company paid out 2,600 won in DPS in FY23. If we assume the same DPS, this would suggest a dividend yield of 6.7% at current price of 38,900 won. 
• Com2Us is a turnaround story. It had an operating profit of 1.2 billion won in 1Q 2024, improving from an operating loss of 13.3 billion won in 1Q 2023. 

• Xiaomi (XM)’s shipments increased by 29% YoY in 2Q24, which is the most rapid growth among the global top five.
• Xiaomi is the only clear gainer of market share among the global top five.
• We believe the stock has an upside of 35% and the target price is HK$22.30 for the end of 2024.

• Xiaomi’s global market increased to 15% in 2Q24 compared with 13% in 2Q23.
• GAC Aion began to be produced in Thailand to bypass the new tariff barriers from the US and the European Union.
• Cotti Coffee plans to extend its “RMB9.90” sales to three years.

• NRG Energy, Inc. recently reported a strong start to 2024, with business performance exceeding expectations and an affirmation of the 2024 financial guidance.
• Management highlighted transformative trends in power demand, primarily driven by electrification, generative AI, and data center growth, which open promising prospects for the power sector.
• Furthermore, NRG is strategically positioned to benefit from tightening supply and demand dynamics in key markets, leveraging its diversified generation portfolio and consumer technology platform.

• Blue Moon started with a kitchen spray cleanser in 1994, but now focuses on liquid detergents in China
• While they have strong marketing and scale, their competitive advantages are weak compared to domestic competitor Liby
• Intensifying competition and various factors have led to a decline in Blue Moon’s market share, raising uncertainty about their future in the industry

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.

• Brookfield Renewable reported mixed results in its fourth quarter 2023 earnings, presenting both challenges and advancements in its operational and financial strategies.
• The company, a leader in renewable energy solutions, demonstrated robust operational success by increasing its funds from operations, driven primarily by organic growth and strategic acquisitions.
• Notably, the deployment of $9 billion into diverse opportunities highlights Brookfield Renewable’s aggressive capital investment strategy, aiming to enhance its global footprint in the renewable sector.