In today’s briefing:
- TSMC Addresses U.S. Expansion Concerns: Strengthens TSMC Position & Positive for Semi Industry Capex
- Tencent (700 HK): Risen 35% Since Our Last Buy, Good Preview for 4Q24
- TSMC US$100bn Investment in Arizona: Some Context
- TSMC (2330.TT; TSM.US): TSMC Held Press Conference Regarding Further Investment of USD$100bn in US.
- Astra International (ASII IJ) – Resilience in Motion
- Gensol Engineering: Forensic Analysis
- SMIC (981.HK): Speculation About the Deepseek Rumor Does Imply Continued Creative Works in the World
- Nongshim Raises Instant Noodles Prices
- IGI Faces Headwinds: Growth Concerns, Market Risks & Uncertainties
- Booking Holdings: An Insight Into Its Merchant Model Expansion & Payment Innovations!
TSMC Addresses U.S. Expansion Concerns: Strengthens TSMC Position & Positive for Semi Industry Capex
- TSMC just held a press conference this evening in Taiwan regarding its expanded U.S. investment plans. TSMC said it won’t impact Taiwan investments; it is actually accelerating its Taiwan investments.
- Additionally, we see TSMC’s aggressive U.S. expansion significantly weakening Intel’s ability to compete, as it removes one of Intel’s major differentiators–domestic U.S. production.
- Maintain Structural Long rating on TSMC — Expanded U.S. investment fortifies the company’s global leadership. ALSO — Positive news for semiconductor manufacturing equipment companies internationally and in Taiwan. ASML, etc.
Tencent (700 HK): Risen 35% Since Our Last Buy, Good Preview for 4Q24
- Tencent’s stock price has risen by 35% since our last buy rating. Downgrade to Hold.
- Our EPS estimate for 2025 is 12% over the market consensus.
- We believe both revenue growth and margin will improve in the coming 4Q24 results.
TSMC US$100bn Investment in Arizona: Some Context
- TSMC’s first 3 Fabs (capacity 80k wafer/month for US$65bn) start production from 2025 to 2030. The newly announced next 3 Fabs (90k, $100bn) should roll out over 2030-35.
- Given Capex in the US is 70% higher than in Taiwan, wafer price will be ~45% higher.
- That’s probably why only 12% of TSMC EUV capacity will be in the US by 2030. Customers want more supply security but cost matters.
TSMC (2330.TT; TSM.US): TSMC Held Press Conference Regarding Further Investment of USD$100bn in US.
- TSMC Chairman Dr. CC Wei pointed out that TSMC builds production lines everywhere to meet customers’ demands. TSMC has never gone against this principle.
- On the 3rd of March, U.S. President Trump and TSMC Chairman jointly announced at the White House that TSMC would reinvest at least $100 billion in the U.S.
- Regarding concerns from the public that TSMC might gradually shift its production focus to the U.S., TSMC made it clear that this would not happen.
Astra International (ASII IJ) – Resilience in Motion
- Astra International recently released finely balanced set of FY2024 results, with weaker auto sales offset by stronger 2W and financial segment performance, with other segments also performing above expectations.
- Financial services growth was driven by stronger multifinance growth, whilst the heavy equipment division saw stronger growth from mining contracting and gold offsetting slower growth from coal mining.
- Astra continues investing in sustainable energy, nickel, and healthcare and looks for new opportunities. Valuations remain attractive on less than 6x forward PER and yield > 8%.
Gensol Engineering: Forensic Analysis
- Gensol Engineering (GENSOL IN)’s credit rating was downgraded to default, triggering a 34% stock decline in just five days. ICRA flagged misleading financial disclosures, high promoter pledges raised serious concerns.
- The company is grappling with delayed debt repayments, aggressive accounting policies, and uncertainty in equity infusion, impacting its ambitious EV manufacturing and solar EPC expansion plans.
- Gensol’s governance issues, cross-default risks, and financial opacity create a high-risk scenario for investors. Management must provide clarity on debt servicing, pledged shares, and capital infusion to restore confidence.
SMIC (981.HK): Speculation About the Deepseek Rumor Does Imply Continued Creative Works in the World
- There is speculation about Deepseek’s wafer manufacturing yield issue at Semiconductor Manufacturing International Corp (SMIC) (981 HK) these days.
- The potential concern serves as a signal for a hot topic within the company, carrying two underlying meanings.
- Although NVIDIA Corp (NVDA US) is making waves in AI applications, we must not overlook the potential for continued creative developments in the world, such as Deepseek’s solution.
Nongshim Raises Instant Noodles Prices
- Nongshim announced that it plans to increase the prices of its instant noodles and snack products starting next week.
- Nongshim plans to raise the retail prices of 14 instant noodle products by 7.2% on average and three snack products by 7.4% starting Monday (10 March).
- We estimate the consensus to raise their earnings estimates by 5-10%+ in 2025 and 2026, driven by the higher product prices of major instant noodles and snacks.
IGI Faces Headwinds: Growth Concerns, Market Risks & Uncertainties
- Steep fall in diamond prices leading to slowdown in demand for certification services since its not viable as much for a consumer as it used to be.
- A leading jeweller in India reiterated that certification demand for diamonds is slowing down due to changing consumer preferences.
- The International Gemmological Institute, the leading certification agency, is now facing headwinds evident from earnings growth slowdown.
Booking Holdings: An Insight Into Its Merchant Model Expansion & Payment Innovations!
- Booking Holdings, a major player in the global online travel industry, reported its fourth-quarter and full-year 2024 financial results, showcasing a strong performance across several key metrics.
- The company achieved a 13% year-over-year growth in room nights during the fourth quarter, surpassing its expectations and reflecting robust demand across all major regions.
- The growth in room nights contributed to a 17% increase in gross bookings and 14% revenue growth, both exceeding the company’s prior guidance.
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