Daily Brief TMT/Internet: Taiwan Semiconductor (TSMC), Taiwan Semiconductor (TSMC) – ADR, MoneyHero , Sung Woo, Square Enix Holdings, Nanya Technology, Vishay Intertechnology, Fastly Inc, Sanmina Corp 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 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.

• Our base case valuation of Sung Woo is target price of 27,981 won per share, which is within the IPO price range of 25,000 won to 29,000 won per share.
• Given the lack of upside relative to the IPO price range, we have a Negative view of this IPO. 
• Our base case valuation of 27,981 won per share is based on a P/E of 16.9x based on net profit of 24.9 billion won in FY23.

• 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

• 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. 

• Vishay Intertechnology’s second quarter 2024 earnings reflect a mixed financial picture, characterized by modest revenue results and continuous investment in strategic initiatives aimed at long-term growth.
• The company reported a quarterly revenue of $741.2 million, which remained essentially flat compared to the previous quarter, with some positive contribution from acquisitions and specific regional demands, offset by decreases in major market segments such as automotive and industrial.
• The automotive sector experienced a significant downturn, with revenue dropping 6.7% quarter-over-quarter and 13.6% year-over-year, largely due to reduced orders from Tier 1 suppliers and OEMs in Europe and North America.

• Fastly’s Q2 2024 earnings highlighted a mix of positive developments and significant challenges facing the company.
• For the quarter, Fastly reported revenue of $132.4 million, which surpassed the midpoint of their guidance.
• This achievement was overshadowed by a concerning trend with some of Fastly’s largest customers, particularly in the media sector, where decreased traffic projections and an emphasis on cost reductions have led to lower revenue expectations for these key accounts.

MoneyHero’s Q224 results reflect management’s strategy of growing market share in its core geographies, as it invests in advertising, customer rewards and its platforms. Approved application conversion, a key driver of revenue, continues to improve as MoneyHero upgrades the customer experience and broadens its product range. Given the elevated investment, we have lowered our adjusted EBITDA expectations for FY24 through to FY26, which lowers our DCF valuation ($2.86/share versus $5.17/share previously). Management expects to achieve monthly positive adjusted EBITDA during Q424. We expect profitability to subsequently improve as the group benefits from operational leverage and continues to grow market share.

• Sanmina Corporation has presented its financial results for the third quarter of fiscal 2024.
• The company reported revenue of $1.84 billion, a slight increase from the previous quarter and within the projected range of $1.8 billion to $1.9 billion.
• This marginal growth is attributed to an 8.3% sequential increase in the communications networks and cloud infrastructure markets, although tempered by declines in the industrial and automotive sectors.