Daily Brief Equity Bottom-Up: What Stories TSMC Investor Conference Telling Us About Customers and more

• TSMC expects 2024 semi sector in recovery with 20-25% y/y growth itself, driven by AI customers. By controlling capex, more rooms to raise dividends but no growth for equipment vendors.
• Faster ramp on N3, likely N3E, N3P than competitor’s. TSMC expects 3nm from 6% of sales in 3Q23, 12.7% in 4Q23 to 15% in 2024, 3x y/y increase in 2024.
• TSMC reports a nearly 30% q/q drop on IOT and consumer IC demand and sees weakness on 12″ mature technology despite better demand 8″ specialty technology.

• TSMC reported 4Q23 results at the upper end of its guidance. More importantly, the company guided for low/mid 20% 2024E sales growth and reiterated an expected 15-20% multi-year CAGR.
• The company provided optimistic guidance for the overall semiconductor industry, forecasting 10% growth in 2024E. TSMC expects to grow much faster than the industry, however.
• TSMC is one of our Structural Longs; our NT$760 target implies 29% upside. The latest results make TSMC’s Buy case even more clear, in our view.

Key points (machine generated)

• The implied cap rate of less than 4% for “cats and dogs” in the real estate market seems unusually low, given the risks and uncertainties involved.
• Redeeming from BREIT and utilizing their liquidity provisions would allow investors to sell at prices higher than the year-end 2021 valuation, suggesting a potential opportunity for profit.
• Taking advantage of this opportunity could be a wise move considering the potential risks associated with the real estate market.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• HDFC Bank’s (HDFCB) stock was down over -8% yesterday and is down over -3% today. The stock seems to have reacted to low deposit growth (~2% QoQ) in Q3FY24 .
• Post the merger with HDFC Ltd that completed in Jun 2023, HDFCB needs to grow its deposits at a fast pace to support its loan growth.
• We think HDFCB is well placed to do so. It also has an option to raise capital through affordable housing bonds which have good economics, similar to term deposits.

• We explore twelve Japanese regional banks to look for key beneficiaries of the improving interest rate outlook, along with valuations, credit quality and capital adequacy
• The global interest rate outlook is in some flux, with the Fed’s and ECB’s prospects of near-term easing being tempered; this should support Japanese JGB yields and domestic bank valuations
• We are positive on three banks that are big beneficiaries of rising domestic interest rates; top pick Tokyo Kiraboshi Financial, Gunma Bank and higher risk option Suruga Bank

• Growth is expected to be fueled by robust performance in international markets. Management expects revenue growth for 2023 to cross 15% YoY.
• Pretax operating margins in Q42023 to get a boost from higher year-end digital sales and seasonal product and equipment sales.
• The analyst consensus on the stock’s growth is overwhelmingly bullish given the expectation of strong growth in international and offshore segments.

Key points (machine generated)

• GSMI is a leader in the Filipino spirits industry and is best known for its flagship brand Ginebra San Miguel, the largest gin brand in the world by sales volume.
• Local companies, including GSMI, Tanduay, and Emperador, dominate the spirits industry in the Philippines.
• Despite lacking global brand recognition, GSMI holds a strong position in the local market, although smaller players such as The Keepers Inc. importing foreign brands may pose competition in the long run.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Novatek Microelectronics Corp (3034 TT) had reserved Apple (AAPL US) iPhone 16 Display Driver IC (DDIC) for future shipment since 3Q24F when qualification past.
• Novatek’s outlook is increasing to about 1~5% in 1Q24F, remarked a higher quarter demand than 4Q23.
• It could be a low season in 2Q24F because the rush order shown up around Chinese New Year.  

• Huawei Technologies Co. Ltd. is facing trouble in meeting delivery commitments for the first electric vehicle (EV) it has co-developed with auto partner Chery Automobile Co. Ltd., a possible sign of supply chain challenges for the model.
• Some people who placed orders for the Luxeed S7, which is the first electric sedan marketed under Huawei’s Smart Selection business model, recently complained online that they could not receive their cars within the promised timeframe.
• In an effort to mollify the customers, Luxeed announced Monday on social media that it will provide people who placed orders for the Luxeed S7 between Nov. 28 and Jan. 15 with varying cash compensation capped at 10,000 yuan ($1,403), based on their wait time.

• Shift Inc (3697 JP) reported 1QFY08/2024 results last week. Revenue and OP increased 29.5% and 0.4% YoY to ¥25.1bn and ¥1.8bn respectively.
• Both revenue and OP were below consensus estimates which triggered a more than 25% drop in Shift’s share price over the last 5 days.
• We think the weaknesses in the company’s 1Q earnings were temporary and we expect the company’s earnings to show recovery going forward