UMC (2303-TW)(UMC-TW)’s first-quarter earnings report and second-quarter outlook were far better than market expectations, pushing up today (28) the stock price once hit the daily limit of 48.8 yuan, and many foreign investors also issued reports, most of which raised their full-year profit estimates , the net profit per share reached 6-7 yuan, but there are also foreign investors considering the fluctuation of the external environment, maintaining a sell rating or lowering the target price.
Foreign investment pointed out that UMC’s operating performance in the first quarter and the outlook for the second quarter far exceeded market expectations. The gross profit margin in the first quarter was 43.4%, which was higher than the market expectation of 41%. In the second quarter, it is expected to increase to 45%. Delays in equipment shipments will limit some growth momentum in 2023, but also ease market concerns regarding oversupply.
In addition, one-third of UMC’s revenue comes from the fields of automobile, server, network and industrial control. The demand in related fields continues to be strong, and the outstanding orders are still at a high level. The company also grasps the growth opportunities of silicon content in smartphones. , such as OLED driver IC, RF-SOI, etc., so the capacity utilization rate will remain fully loaded this year.
Foreign investors have raised UMC’s revenue and profit estimates for this year. It is expected that UMC’s annual revenue will reach 258 billion yuan, with a net profit following tax of 77.6 billion yuan and a net profit per share of more than 6 yuan. They are optimistic regarding the quality of UMC’s mature manufacturing process. Comparable to TSMC (2330-TW)(TSM-US), making customers more sticky, emphasizing that UMC is still the first choice for second-tier wafer foundries.
However, some foreign investors believe that the overall level of uncompleted orders of UMC is declining, and it may even face the risk of excess inventory in the second half of this year, leading to a reversal of supply and demand. Sell rating.
In addition, in view of the recent increase in macro uncertainty and the limited room for sales unit price growth in the second half of the year, foreign investors lowered the price-earnings ratio estimate from 14 times to 9 times, and the target price was also revised down from 85 yuan to 66 yuan.