2024-06-20 10:24:17
A press convention revealed the key that TSMC’s inventory value is straightforward to rise however tough to fall. Why does the domineering Wei Zhejia dare to boldly name prospects for an increase?
Wei Zhejia launched key info on the press convention following the shareholders’ assembly, which brought on TSMC’s market worth to extend by 2.1 trillion yuan in 8 buying and selling days. Subsequent, TSMC will enter a harvest interval, and its monetary efficiency will develop into higher and higher than its opponents. The additional away.
Textual content/Lin Hongda
In response to the biweekly report of “Monetary Information”, in June this yr, TSMC’s inventory value as soon as once more carried out a shock. After the TSMC shareholders assembly on June 4, to June 14, inside 8 buying and selling days, TSMC’s inventory value rose by 83 yuan, and its market worth elevated by 2.1526 trillion yuan. That is the capital market’s “increase” for TSMC’s new chairman Wei Zhejia to take workplace; as a result of, whether or not from a basic or monetary perspective, TSMC is more likely to rise extra simply than fall sooner or later.
Idea adheres to three company values
On the press convention following this yr’s TSMC shareholders’ assembly, Wei Zhejia, who hardly ever gave interviews prior to now, responded to all questions instantly throughout the press convention. Nonetheless, Wei Zhejia’s humorous response confirmed sturdy ambition and self-confidence. From this important press convention, we are able to higher perceive his administration fashion and pondering logic.
Firstly of the press convention, Wei Zhejia made it clear that he had refused all interviews prior to now, however this time he needed to settle for media interviews as a result of he took over the place of chairman. Then, earlier than everybody requested questions, Wei Zhejia himself requested three key questions and gave solutions.
To start with, is there any new strategy when the corporate adjustments its chairman? Wei Zhejia mentioned: “TSMC was based by Dr. Zhang Zhongmou. Over the previous 30 years, even when everybody adjustments, it will likely be the identical… This methodology of doing issues might be very constant, and all of the values are very constant. So if you happen to ask me, will it change? No, we’ll proceed to maneuver ahead and proceed to stick to those three most necessary values in our Expertise, Manufacturing and Buyer Belief, and we’ll by no means compromise on integrity.”
Concerning the second query, Wei Zhejia mentioned: “I’ve checked out some doable questions and requested whether or not I ought to organize for a successor?” The subject modified, “Everybody, I’ve simply taken workplace they usually requested me regarding my successor. It is rather embarrassing for me.” However. He additionally mentioned that he actually needs to plan a system for cultivating successors in order that the corporate can function sustainably.
Query 3: AI is so widespread, what does TSMC suppose? Wei Zhejia mentioned, “Let me let you know, I’m very optimistic such as you. AI is certainly scorching, and it has simply begun.” He mentioned humorously, “At some point, our TV station will be capable of create a CC (Wei Zhejia’s English title). Discuss right here. It might probably imitate my voice and every part very properly, and you’ll simply sit within the workplace and watch the CC efficiency.”
Wei Zhejia continued: “Mr. Huang Renxun, the Three Trillion Man, he mentioned that the long run is brilliant, and I fully agree. What regarding TSMC? As a result of our expertise is all the time forward of our friends, we’re in a really favorable place; I imply favorable. That’s to say, nobody can compete with us. TSMC will proceed to keep up this benefit.”
A press convention revealed the key that TSMC’s inventory value is straightforward to rise however tough to fall. Why does the domineering Wei Zhejia dare to boldly name prospects for an increase?
Optimistic regarding TSMC’s AI dominance
In response to the biweekly report of “Monetary Information”, Wei Zhejia even bluntly said that “the way forward for AI is brilliant, nevertheless it solely applies to TSMC.” For instance, he used to pursue Intel’s pursuit of sooner computing speeds, however now the vitality effectivity of chips is “as necessary because the computing pace.” He defined that TSMC can meet the wants of consumers by way of computing pace and vitality effectivity. “There aren’t many corporations with such expertise, so all prospects are cooperating with us.”
As well as, “Will we spend cash indiscriminately? Most likely not. All our bills and the manufacturing capability we construct are for long-term improvement in a number of years. This precept is not going to change, and our efficiency will all the time be “Okay, don’t fret, OK, I’ve completed talking.” Each reply from Wei Zhejia was domineering.
It’s value noting that in previous authorized conferences, Wei Zhejia virtually by no means answered questions on TSMC’s pricing technique, irrespective of how the authorized individuals requested. As a result of TSMC adheres to the precept that prospects succeed first, following which TSMC succeeds. However beneath the tide of AI, Wei Zhejia not solely took the initiative to say that TSMC would elevate costs, but in addition cited Huida for example, saying, “Its merchandise are too costly, however they’re certainly beneficial, so I’ve to start out and present my worth to it.” .
Within the AI chip warfare, TSMC is the one provider of essentially the most superior processes. Within the first quarter of this yr, Huida’s gross revenue margin reached 78%, whereas TSMC’s was 53%. When prospects have achieved nice success, TSMC’s gross revenue margin has additionally elevated. House.
As for the price of constructing factories in america that’s of concern to the surface world, Wei Zhejia mentioned that the price in america is certainly costlier than in Taiwan, however TSMC’s objective is to make American factories cheaper than different opponents constructing factories in america. Establishing factories abroad will certainly enable TSMC to do issues properly. The strategy provides somewhat extra flexibility in varied locations, however TSMC nonetheless adheres to the identical set of values when working in varied locations, and creating abroad will probably be extra conducive to attracting abroad abilities.
The sharp money move instrument beats two main rivals
What’s fascinating is that when somebody requested for a chunk of clever recommendation, Wei Zhejia mentioned, “Let me share with you. If you wish to make investments and handle cash, stick with TSMC. We’re sincere, hard-working, and carry out properly. Typically the inventory value drops barely.” I really feel aggrieved, however I’ll nonetheless come once more. Didn’t I display funding and monetary administration earlier than?” Wei Zhejia mentioned that he additionally borrowed cash to purchase TSMC shares, and he might add extra money on the applicable time sooner or later.
A press convention revealed the key that TSMC’s inventory value is straightforward to rise however tough to fall. Why does the domineering Wei Zhejia dare to boldly name prospects for an increase?
Wei Zhejia might be very optimistic regarding TSMC’s future improvement and doesn’t suppose there may be something to fret regarding. However additional evaluation revealed that he was assured and the key he saved unstated was truly associated to TSMC’s monetary well being.
First, we are able to have a look at TSMC’s free money move efficiency. Free money move refers back to the money out there following deducting capital expenditures from money generated from operations. Up to now 5 years, TSMC’s free money move has been constructive for more often than not, and has grown considerably prior to now two years; within the fourth quarter of 2022, TSMC’s free money move was 150 billion yuan; within the fourth quarter of 2023 , this quantity elevated to 224.6 billion yuan; within the first quarter of this yr, it rose to 255 billion yuan.
Nonetheless, TSMC’s opponents Samsung and Intel aren’t so fortunate. In response to the Wall Avenue Journal web site, Samsung Electronics’ free money move within the fourth quarter of 2022 was nonetheless regarding NT$35.8 billion. Later, as a result of poor reminiscence increase, free money move fell into outflows for a lot of quarters; it was not till the fourth quarter of 2023 that It turned constructive and have become NT$102.8 billion. Nonetheless, within the first quarter of this yr, free money move fell into detrimental worth once more.
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Intel’s state of affairs is that within the fourth quarter of 2022, Intel’s free money move was roughly NT$57.1 billion; within the fourth quarter of 2023, it grew to become an outflow of NT$66.1 billion; within the first quarter of this yr, its free money move grew to become detrimental NT$2,297. billion.
Trying ahead to a brighter future for the Nationwide Protectorate Mountain
The importance of this to TSMC shareholders is that TSMC’s dividend coverage is to allocate 70% of free money move to shareholders. Since free money move is money generated from operations minus capital expenditures, when AI enterprise alternatives move to TSMC in massive portions, TSMC’s income will With extra cash, we are able to increase manufacturing capability in varied locations whereas rising dividends to shareholders. In Could this yr, TSMC’s interim board of administrators elevated the first-quarter dividend from 3.5 yuan per share to 4 yuan. As soon as the dividend is elevated, the inventory value will obtain stronger assist.
Moreover, TSMC’s monetary assets are nonetheless rising quickly. In response to TSMC’s monetary report, on January 1 this yr, TSMC’s undistributed surplus was 3.15 trillion yuan; in the identical interval final yr, TSMC’s undistributed surplus was 2.6 trillion yuan, a rise of greater than 500 billion yuan in undistributed surplus in a yr.
Below this AI wave, when most funds out there are pouring into TSMC, and different opponents need to compete with TSMC by rising capital expenditures, the money that may be distributed to shareholders will inevitably lower; quite the opposite, on this warfare, , TSMC’s money move will develop into more and more sturdy, forming sturdy assist for the inventory value.
Subsequently, following Wei Zhejia took workplace, along with quietly doing a great job in chip manufacturing, redefining his personal worth within the AII period will probably be an necessary proposition for TSMC’s future operations.
“Monetary Information” biweekly identified that it’s conceivable that within the subsequent few years, the media will proceed to ask regarding geopolitical dangers; however returning to enterprise fundamentals, TSMC’s efficiency and monetary assets are sufficient to make this huge ship sail additional sooner or later. The extra secure you might be, the broader you’ll stroll.…(This text comes from the 714th difficulty of the biweekly “Monetary Information”)
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