In today’s briefing:
- Select Sector Indices and S&P Equal Weight Rebalance Preview: Capping Changes & US$13bn Trade
- 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.
- SMIC (981.HK): Speculation About the Deepseek Rumor Does Imply Continued Creative Works in the World
- Forensic Analysis – AGS Transact Technologies: A Story Of Financial Mismanagement
- Trimble Inc.: Is The Strategic Pivot From Traditional Sales To A Subscription-Based Model Paying Off?
- IQIYI Inc.: How Is Its Competitive Positioning Against Tencent Video & Short-Form Platforms?
- MWC Barcelona Showcased The 6G Showdown: MediaTek Vs. Qualcomm in the Race for Wireless Supremacy
Select Sector Indices and S&P Equal Weight Rebalance Preview: Capping Changes & US$13bn Trade
- Constituent changes to the S&P 500 INDEX (SPX INDEX), S&P Midcap400 Index and S&P SmallCap600 Index for the March rebalance will be announced after market close on Friday.
- There will also be capping changes for the Select Sector indices that will result in a round-trip trade of US$13.1bn. Constituent changes will add to that flow.
- The largest inflows will be in Amazon.com, Tesla, Microsoft, NVIDIA, Alphabet (GOOGL US) and Electronic Arts. Largest outflows are from Broadcom, Meta Platforms, Linde, Mcdonald’s Corp and Take Two Interactive.
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.
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.
Forensic Analysis – AGS Transact Technologies: A Story Of Financial Mismanagement
- AGS Transact Technologies (AGSTRA IN)‘ stock plunged 85% in six months due to loan defaults, delayed payments, and severe cash flow issues.
- The company is on the verge of insolvency as debt defaults, SLA breaches, and auditor concerns mount. Independent directors, executives, and key employees are resigning, signaling deep-rooted financial instability.
- The management’s revival plan, including selling subsidiaries and restructuring loans, may be too late. The cash management business is highly sensitive to disruptions, making recovery uncertain.
Trimble Inc.: Is The Strategic Pivot From Traditional Sales To A Subscription-Based Model Paying Off?
- Trimble Inc. concluded its fiscal year with robust performance, exceeding the midpoint of its guidance.
- The company reported fourth-quarter revenue of $983 million, ARR of $2.26 billion, and EPS of $0.89.
- On an as adjusted basis, the fourth-quarter revenue increased by 9%, while gross margins significantly exceeded 70% for the first time.
IQIYI Inc.: How Is Its Competitive Positioning Against Tencent Video & Short-Form Platforms?
- iQIYI reported a mixed set of results for the fourth quarter and fiscal year 2024.
- The company observed significant improvements in several operational metrics towards the end of the quarter, fueled by the strong performance of its top-tier content.
- This uptick in content performance led to an increase in subscribing members and higher user engagement.
MWC Barcelona Showcased The 6G Showdown: MediaTek Vs. Qualcomm in the Race for Wireless Supremacy
- The Stakes in the 6G Race: 100x Data Speeds & AI-Driven Networks
- Qualcom’s Strategy vs. Mediatek’s Gameplan to Win the 6G Battle — Takeaways from MWC 2025 in Barcelona
- Investment Takeaways: MediaTek vs. Qualcomm — Maintain Structural Long for Mediatek but Qualcomm Could Offer Near-Term Relative Value Play
Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
Unlock all research summaries