The topic of today’s report is “TSMC’s Ultimate Way to Protect the Market: Increasing Dividends.”
Wanbao Investment Gu Cai Mingzhang emphasized that the Federal Reserve will raise interest rates and shrink the balance sheet to hit U.S. technology stocks. In the first week of this year, Nasdaq plunged 4.5%, the largest single-week decline since February last year. The fastest selling of technology stocks in the past ten years, Taiwan stocks foreign hedge fund ratio is small, but it is unavoidable to reduce the weight of electronic stocks and increase the number of small and medium-sized electronics.
Foreign investors have accumulatively bought 138 billion yuan over Taiwan stocks from Christmas to New Year’s Eve, which has come to an end. It is estimated that Taiwan stocks will be oversold once more before the Federal Reserve raises interest rates in March. Why does the Federal Reserve’s interest rate hike and balance sheet reduction will suppress technology stocks? Technology stocks take the future as their fundamental advantage and enjoy a relatively high PE ratio. The current Nasdaq PE ratio is 27 times, close to the level of the dot-com bubble in 2000. However, rising interest rates and shrinking balance sheets have weakened technological growth and reduced the discounted value of stock prices. The reasonable price-to-earnings ratio began to be revised downwards.
In addition, the main buying of US technology growth stocks in the past two years has come from the Federal Reserve Bank’s printing of money, and even the QE of the European and Bank of Japan’s central banks is also the driving force.
EURThe district’s CPI in December last year was 5%, a 30-year high. The ECB is bound to follow up with the FED. The abandonment of inflation is only a short-term increase in interest rates and tightening. Taiwanese electronics stocks have always followed the US technology stocks. , The current signs show that there is a greater chance that in mid-March, the overall electronic stocks of Taiwan stocks will fall into a mid-term adjustment. Electronic stocks account for 55% of the market value. Therefore, although the weighted index does not rule out a new high before the lunar calendar is closed, it is higher than 18,619 The point range is very limited.
As TSMC (2330-TW) Occupies 29% of Taiwan’s equity. Before the law meeting on Thursday, the bullish market held up the market. The 18,034 points created in July last year changed from past pressure to support. However, the US released December CPI this Wednesday. , Estimated at 7.1%, and the terror inflation data of over 7 is likely to hit US technology stocks once more. The 10-year bond yield, the leading indicator of inflation, closed last week at 1.76%, the highest since the 2020 epidemic. Will it move towards 2% this week? Step forward and become the focus of observation.
Wanbao Investment Gu Cai Mingzhang emphasized that TSMC’s stock price hit a sky-high price of RMB 679 in January last year, but it did not rise. The main reason was that the gross profit margin was conservative in the first quarter, which was only 50%. It is reported that this week, the law said that it will be optimistic regarding the financial forecast for the first quarter of this year. There is a chance to look at 53%. This should be a major profit for TSMC. The stock price is expected to exceed 679 yuan, and then write a new sky-high price.
However, TSMC is a world-renowned large-scale technology stock. Nearly 80% of its holdings are foreign capital. It must be constrained by the 10-year bond yield. Why did TSMC fail to perform following its high of 679 yuan in January last year. At that time, TSMC’s quarterly dividend was 2.5 yuan, and the total annual dividend was 10 yuan. The dividend yield corresponding to 679 yuan was only 1.5%. However, at that time, inflation rose and the 10-year bond yield exceeded 1.5% in February, the highest since March. At 1.75%, TSMC’s dividend yield is lower than the 10-year bond yield, making foreign companies sell more than TSMC.
Later, TSMC raised its quarterly dividend to 2.75 yuan per quarter, and the annual dividend was 11 yuan. The current 10-year bond yield is 1.76%, corresponding to TSMC’s reasonable price of 625 yuan, and Monday’s intraday low of 627 yuan is similar, driven by TSMC’s rebound. The market closed in the red, and I am most afraid of a high CPI this week. If the 10-year bond yield rises to 1.8%, the TSMC reasonable price will fall to 611 yuan.
Wanbao Investment Gu Cai Mingzhang emphasized that many Wall Street investment banks predict that the Fed will raise interest rates and shrink the balance sheet. The 10-year bond yield target is 2%. When this data appears, the reasonable price of TSMC will be reduced to 550 yuan. In the next few months It is possible for this to happen within. If TSMC’s quarterly dividend is raised to 3 yuan, 12 yuan for the whole year, when the 10-year bond yield reaches 2%, TSMC’s reasonable price will be raised to 600 yuan, which is TSMC’s ultimate means of protecting the market.
The Federal Reserve’s interest rate hikes and balance sheet reductions have greatly shifted funds and changed the color of stocks. Talk regarding a special phenomenon to alert investors. The performance of equity funds has changed significantly this year. Mainland A-share funds fell by an average of 4% in the first week of 2022. Last year’s champion performance rose by 120%, but fell sharply by 12% in the first week of this year, making it the bottom three of all funds. Funds moved greatly, and semiconductors, new energy, and lithium batteries, which rose sharply last year, fell sharply.
Taiwan stocks fell sharply in the first week of this year, and the counter-buying index explored the seasonal line support. The stock funds with an average performance of more than 40% last year plunged by 5% in the first week of this year, while 80% of domestic stock funds were in electronics. Last year, the adoption of small and medium-sized electronics won a big win.
At present, the small and medium-sized electronics company, Jinghong (3141-TW), Jiance (3653-TW), Wanrun (6187-TW), Dewei (3675-TW), Yu Tai (6679-TW), Chihara (3035-TW), Worldchip-KY(3661-TW), Genesys Logic (6104-TW), Qiangmao(2481-TW), Liwang (3529-TW), Hongkang(6457-TW), Yongzhi Technology (6683-TW), Hejing(6182-TW),brand new(2455-TW) Etc., most of these small and medium-sized electronics are real materials, but the problematic stock price has risen too much. Jinghong surged more than 5 times last year, and won the first place in Taiwan stocks. As a result, it has been under profit-taking and selling pressure. The limit fell on a trading day.
There are currently two options for investment credit that weighs on small and medium-sized electronics. One is to continue to hold on to small and medium-sized electronics stocks, but at the expense of 2 to 3 months of performance. The other is to exchange shares.2409-TW), Innolux (3481-TW) December revenue was flat without a significant recession. Coupled with the protection of high yields, it is estimated that the panel double tiger’s dividend this year will start at 3 yuan, and the yield rate will be 13-16%, which will be 7 times the 10-year bond yield. Tiger is the focus of the future operation of the investment letter.
Historically, the Federal Reserve will raise interest rates and shrink the balance sheet. The stock king’s first dominoes fell, indicating that legal persons and large players have reduced the size. In 2011, the balance sheet was reduced when the stock king Hongda Electronics (2498-TW), reversed from the sky-high price of 1,300 yuan. The interest rate was raised in December 2015, when the stock Wang Da Liguang (3008-TW) The band is cut in half, this time the stock king is Silicon Power-KY(6415-TW), this year’s dividend is estimated to be 14 yuan, and the yield is only 0.3%. Recently, the stock price broke the bottom. Although Silicon Power-KY-led daughters have adjustment pressure, they will still rebound in the medium and long term.
The more dangerous thing is that the Fed’s balance sheet reduction in the second half of the year will lead to market deleveraging. The stocks that are truly dangerous are the fact that listed companies draw big pie and tell stories. Taking advantage of the current 10-year bond yields that have not exceeded 2%, quickly withdraw and retreat. .
Bank stocks represented by value stocks rose strongly by 5% in the first week of 2022, the best opening in the previous year. This week, JP Morgan Chase, Citigroup, and Wells Fargo Bank released financial reports and are expected to deliver good results. Although value stocks lack rapid growth in performance However, it is stable, and the stock prices of value stocks are relatively cheap in terms of surplus, net worth, and dividends.
Although Taiwan Financial Holdings’ room for growth in the stock market has shrunk, high yields in the bond market can make up for the overall surplus, continuing its strength since last year. Before the announcement of this year’s dividend in the first quarter, financial stocks became the safe haven for absorbing the most funds. Cathay Pacific (2882-TW), Development Fund (2883-TW), Yushan Gold (2884-TW), CITIC Gold (2891-TW) Is a new high stock price index.
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