2024-02-16 06:59:23
On the day the Taiwan stock market opened red (2/15), TSMC hit a record high price of 709 yuan. Although the closing price of 697 yuan did not reach the integer level of 700 yuan, many investment friends have exclaimed: “The university president is out of trouble.” . Internet celebrity Joeman also happily shared his good mood on the Internet: “If you don’t sell one piece, a miracle will come.” It is not difficult to feel the joy of TSMC’s electrolytic sleeve during the conversation. But do you want to buy TSMC at 700 yuan? Or do you want to sell it?
The answer to this question is complex. If you are an investment friend who finally got out of the trap, there should be more people who want to sell at this price. But if you are an investment friend who bought below 600 yuan, the price of 700 yuan will be regarding 15%~16% for them. The price difference may be less than the profit stop point in your heart, so naturally you won’t want to sell.
Therefore, I said that the answer to the question “Should TSMC get off the market at 700 yuan?” is actually difficult to answer. However, I want to use a more objective perspective to analyze with all my investment friends from the short-term as well as the medium and long-term.
Should TSMC get off the market at 700 yuan?Analysis from short, medium and long term
First of all, from a short-term perspective, TSMC has only seen a daily limit in the past 10 years on July 27, 2020. At that time, TSMC was inspired by the US ADR surge of more than 12%, and the stock price hit the daily limit. The stock price at that time was 424.5 yuan. The stock price opened higher the next day (July 28). The intraday high price reached 466.5 yuan, and a large number of 172,000 lots were sold. After that, it went through nearly three and a half months of sideways trading until the same day (2020) On November 16, 2016, it once once more broke through the previous high of 466.5 yuan.
Compared with TSMC’s surge this time, the reason behind it is also due to the surge in US stock ADRs. Compared with Taiwan stocks, TSMC’s premium space is close to 30% at most. As a result, TSMC, which was unable to react during the Taiwan stock market break, saw its stock price surge on the day of the new year’s red market. The high difference (yuan) hit the daily limit of 710 yuan, and the closing price also broke out with a large number of 132,000. Therefore, I think there is a good chance that there will be a period of sideways consolidation in the future. Therefore, from a short-term perspective, I want to get off the market first at 700 yuan. Considering the efficiency of the use of funds, it should be a reasonable operating strategy.
The target prices of foreign investors are all above 700 yuan.
However, from a medium- to long-term perspective, 700 yuan is most likely not the highest price for TSMC. We can start with this inference from the TSMC buying report issued by foreign investor Morgan Stanley, which has been hotly discussed in the market recently.
Foreign capital Morgan Stanley issued a buying report on TSMC on February 13 this year (2024), raising the target price of TSMC from 698 yuan to 758 yuan, and giving it an Overweight rating. And it gives an attractive outlook for the industry it belongs to.
The report naturally attracted the attention of the market, because before JP Morgan issued this report, JP Morgan had given TSMC a target price of 770 yuan, while Bank of America and Goldman Sachs had set a target price of 760 yuan. 710 yuan for TSMC, 720 yuan for HSBC, 740 yuan for Smith Barney, 700 yuan for Nomura, and 750 yuan for UBS. Almost all foreign investors have set target prices for TSMC above 700 yuan.Therefore, in the medium and long term, TSMC’s highest price should not be just 700 yuan.
Table 1. Target prices given to TSMC by major foreign investors
Two reasons why Morgan Stanley is optimistic regarding TSMC
But what we should know more is why foreign investors are optimistic regarding TSMC, and then judge whether we should continue to hold TSMC.
Take this research report from Morgan Stanley. Morgan Stanley believes that with the growth trend of large-scale language models, the demand for AI chips will continue to grow, and TSMC’s leading position in high-end processes will be the largest. Beneficiary. Under this advantage, TSMC will have a new pricing power (Pricing Power), and it is expected to increase the quotation of advanced processes by 10% in the future to cope with the increased costs of US fabs.
In addition, in terms of the deployment of extreme ultraviolet (EUV) equipment, 15 to 17 units of EUV equipment have been successfully ordered, which means that the demand for the 3-nanometer process will be very strong in 2025 and 2026, and in the future AI-related The proportion of revenue is expected to increase to 15%, which means that the overall gross profit margin is expected to increase further.
Therefore, Morgan Stanley’s EPS forecast for TSMC in 2024 is 38.26 yuan, and its EPS forecast in 2025 is 47.08 yuan. The growth rate is as high as 23.05%, which is greater than the estimated revenue growth rate of 15%.
14 times price-to-earnings ratio calculates TSMC’s sweet price
Therefore, for investment friends who want to hold in the medium and long term, if your cost is low enough, it should be possible to continue holding without wanting to run in and out in the short term!
So for those investors who currently don’t have TSMC in their hands, if they want to buy TSMC, what price would be more appropriate?
Regarding the answer to this question, Morgan Stanley also mentioned it in the purchase rating report,Morgan Stanley believes that based on the estimated EPS in 2025, TSMC’s price-to-earnings ratio of 14 times will be an attractive price. If you look at the narrative content in the above paragraph, the estimated EPS in 2025 is 47.08 yuan, and the reasonable stock price with a price-to-earnings ratio of 14 times is 659.12 yuan, which should be rounded to 659 yuan.
Finally, Morgan Stanley also added that February 21st is Nvidia’s financial forecast announcement day, which will be a factor that has the opportunity to push up TSMC’s stock price in the near future. Whether you want to make a mid- to long-term layout or short-term, you want to make a profit first. Profits are taken, investment friends may wish to pay attention to Nvidia’s financial forecast numbers on 2/21 (Wednesday)! I wish you all smooth operation and good luck in the Year of the Dragon!
About the author_Chen Weitai
He has been engaged in the financial and securities industry for more than 17 years. He is a qualified securities analyst. He is currently the chief investment officer of Zhongying Wealth, CMoney Financial Consultant, and chief financial writer. He is also a lecturer at the Securities and Futures Foundation and Zhongzheng Community University. Net guest author.
The investment mentality focuses first on the long-short cycle of the overall economy, and combines fundamental stock selection with technical operations; it is believed that “entering the market at the right time” is the way to make profits in stock market investment. Currently there are 2 books: “Believe me, you can make endless money” and “Taiwan Stocks Biographical History”.
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