TSM Stock Forecast and Price Target 2021

Today, I will analyze TSMC stocks in-depth with you.

In the semiconductor sector, TSMC has always been my most promising stock. TSMC has just announced its results for the fourth quarter of 2020. At the same time, there are new developments in the entire chip industry recently. Therefore, today I will combine the financial report and chips. The latest developments in the industry to analyze the trend of TSMC stocks,

First of all, we analyze TSMC’s fourth-quarter and full-year 2020 financial reports to see what are the key points worthy of investors’ attention.

First, TSMC’s fourth-quarter revenue and profitability are very good.

Compared with the outlook for Q4 in Q3, the outlook at that time was US$12.4-12.7 billion, and the actual revenue was US$12.68 billion. Actual revenue As the upper limit of the outlook, the gross profit margin outlook is 51.5%-53.5%, while the actual gross profit margin is 54%, which is better than the outlook.

The operating net profit margin is expected to be 40.5%-42.5%, and the actual operating net profit margin is 43.5%, which is much better than the outlook. Then compared with the same period of the year, revenue increased by 22% month-on-month and gross profit margin increased by 3.8%. Earnings per share increased by 23%,

At the same time, compared to the third quarter, regardless of revenue, gross profit margin, operating net profit margin, or earnings per share, all are positive growth, so I think this is a very good financial report.

TSMC’s gross profit margin increased from 50.2% in the fourth quarter of 2019 to 54% in the fourth quarter of 2020, indicating that TSMC’s high-end process demand is strong.

Looking at the full year of 2020, revenue increased by 31.4%, while earnings per share increased by 50%. Earnings growth was much faster than revenue growth. This shows that although TSMC has been increasing capital expenditures, due to the near-monopoly of high-end manufacturing processes, Taiwan Semiconductor Manufacturing Co., Ltd. can easily cover the cost by increasing the foundry price,

Second, TSMC’s outlook for the first quarter of 2021 is also very good.

TSMC’s revenue outlook is between US$12.7 billion and US$13 billion. The revenue for the first quarter of 2020 is US$10.31 billion. The upper limit of 130 million is estimated that its growth is 26.1%,

TSMC did not give a forecast for earnings per share. Taking into account the increase in its profit margin, it is expected that earnings per share will grow by about 30%. TSMC’s full-year EPS in 2020 is 3.39 US dollars. The current price of ADR in the US stock market is 126 dollars, so the P/E ratio is 126 divided by 3.39, which equals 37 times the P/E ratio.

And if we are a little bit ahead, we use the EPS of Q4 in 2020, that is, the EPS per quarter is 0.97 US dollars, and we estimate that the full-year EPS of 2021 will be 0.97*4=3.88 US dollars. Therefore, the P/E ratio can be estimated as 126/3.88. It is equal to 32.5 times the price-earnings ratio. I think this estimation method is relatively conservative.

Another estimation method is that if it is assumed that TSMC’s earnings per share can increase by 30% in 2021, the current price-to-earnings ratio of the stock price relative to the 2021 earnings is 29 times.

If you compare horizontally with American technology companies, even if the price of TSMC has risen considerably in the past few months, looking to the future, TSMC’s current stock price is still within a reasonable range.

Third, TSMC’s high-end process demand is strong,

In revenue, the proportion of revenue from 5 nanometers increased from 8% in the previous quarter to 20%.

The revenue share of 7nm decreased from 35% in the previous quarter to 29%.

The revenue contributed by the 16nm and below 16nm processes will increase from 50% in 2019 to 58% in 2020.

Because the proportion of advanced process revenue is higher, this can explain why TSMC’s profit growth is much faster than revenue growth, and why the gross profit margin continues to increase.

Fourth, compared with the company’s capital expenditure of approximately US$17.2 billion last year, TSMC announced that this year’s capital expenditure will reach US$25 billion to US$28 billion, far exceeding market expectations.

TSMC said that about 80% of its expenditures will be used in chip manufacturing with advanced processes such as 7nm, 5nm, and 3nm, as well as the 5nm wafer fab that the company will build in Arizona, USA,

I don’t think investors need to worry about the substantial increase in capital expenditure, because we see that the main reason for the increase in capital expenditure is the increase in demand for chip foundry. At the same time, the increase in capital expenditure can strengthen TSMC’s technical barriers. To widen the gap with Samsung, these capital expenditures are necessary.

The biggest beneficiary of the competition between TSMC and Samsung on capital expenditure will be the upstream ASML company.

On the other hand, with the evolution of the process to 3 nanometers and 1 nanometer, EUV lithography machines are already standard configuration, so ASML, which monopolizes EUV lithography machines, is also worthy of special attention by investors.

After talking about TSMC’s fourth-quarter quarterly report and looking at industry trends, there is still much good news from TSMC shortly. One is that Qualcomm’s latest Snapdragon 888 chip has unexpectedly encountered some problems. As some reviewers got it equipped with Snapdragon The Xiaomi Mi 11 with 888 chip, some reviewers found that Xiaomi Mi 11 had problems such as overheating and dropped frames in the test. This inevitably makes people worry that the Snapdragon 888 may repeat the mistakes of the Snapdragon 810 with too high power consumption.

The Snapdragon 888 is produced by Samsung with a 5nm process, because now only Xiaomi Mi 11 phones are equipped with the Snapdragon 888 chip. The evaluation results may not be representative. As more and more high-end mobile phones equipped with the Snapdragon 888 chip are launched, there will be more tests that have come out, if Qualcomm’s chips go wrong again, there is a high probability that Qualcomm will abandon Samsung in the future.

Turning to TSMC again, investors must pay attention to the extent to which this matter will ferment. Also, Intel has changed its CEO, and the new CEO will be able to drastically change Intel’s existing structure. I think Intel is gradually abandoning chip manufacturing. And seeking foundry is a high probability event,

At this stage, Intel must contact Samsung and TSMC at the same time, to increase the weight of the negotiation.

Because of TSMC’s leading process, the chance of TSMC winning Intel’s orders is very high. Even if Intel is declining, Intel is still a big customer. Therefore, if the news of Intel looking for TSMC foundry is released in the future, TSMC will usher in another round of surges.

It is also possible that because of the confidentiality of customers, Intel does not say, and TSMC can not actively release the news. If so, investors need to think for themselves to conduct an in-depth analysis of the ins and outs. No matter what, the stock price of TSMC is down. The trigger point of a big rise may be related to Intel.

Therefore, whether you look at TSMC’s latest financial report or the recent trends of Qualcomm and Intel, TSMC’s good news continues. Now that the epidemic will not pass immediately, and the digital transformation of mankind is still accelerating, so the entire chip industry Will still be thriving and full of life in 2021,

According to my preliminary estimation, TSMC’s stock price is still within a reasonable range. I expect that even if TSMC has risen a lot from the beginning of 2021 to now, TSMC’s stock price will continue to follow the performance of TSMC in the future. The growth is realized and the tide rises,

At the same time, the growth of chip demand has driven the growth of TSMC, and the growth of TSMC and the competition with Samsung will greatly benefit ASML, so ASML also deserves special attention.

If the chip industry is too obscure for you, and you believe in the overall development of the chip industry, you can consider ETFs, such as the ETF that tracks the Philadelphia Semiconductor Index, coded as SOXX. Of course, I have to emphasize that the overall semiconductor market has risen recently. It's too fast and too fierce, please be careful not to chase the risk,

The conclusions mentioned here and the conclusions obtained are all long-term trends. Put a long line to catch big fish. There are opportunities. Sometimes you need to be patient and wait for a good opportunity to enter the market.

Comments

The signal that the stock market has peaked?

the stock market Although I know how to judge when the bear market is over and when I should buy at the bottom, I still don't know how to judge the selling at the top. I'm afraid I don't know when to leave the market after buying stocks in the future. If you have also tried to avoid the crash, stock market crash, and even bear market, or always hold stocks at these times. These four tricks are based on my experience in the stock market for more than 10 years. They help me hold cash early before many market declines, so I suggest that you must see the end. It is likely to help you invest in stocks. Raise to another level. Because knowing how to go is more important than knowing how to buy, and knowing how to go is an important factor in determining how much you can earn or lose. The first trick, everyone needs to learn to identify the Distribution Day. As the name implies, the shipping day is a day of huge selling pressure. On that day, it may be that large account...

Will the Great Depression make a comeback?

the Great Depression On March 21, 2020, the United States already had initial unemployment data. Exceeding market expectations, the number of applicants reached 3.28 million, a record high. The current unemployment situation in the United States. Before March 7, employment in the United States was not affected by the epidemic. In the week of March 7, the number of people applying for unemployment benefits for the first time in the United States was 211,000, a decrease of 4,000 compared to the previous week. It is still healthy. This shows that the United States is in a good employment track range. The actual data began to fluctuate, that is, the data for the week of March 14, the number of people applying for relief reached 282,000, a slight increase. On March 21, the number of people applying for unemployment benefits soared to a record high this week. 1.7 million people have far exceeded expectations, and market expectations are about 1.5 to 1.7 million people. It can be said...

NIO stock forecast 2025: Core technologies

In terms of new forces in car manufacturing, industry participants have entered the fast lane in areas such as new product releases and intelligent driving. With the "general trend" of the popularization of electric vehicles, you will catch up. For NIO, which is the first to deploy the electric vehicle industry, whether ET7 can take the industry pioneer into the "overtaking lane" and continue to be at the forefront of the industry. Examining NIO's strategic measures is an effective way to try to find answers. Way, especially in the context of the “general trend” of electric vehicles. NIO's Core technologies: 1. At present and for a period of time, the price, performance iteration, and supply of batteries and core raw materials will be the core factors that determine the popularization of pure electric vehicles, and determine a series of trends in the market and participants. Lithium is an indispensable and important element of power batteries. The comme...

Safe-haven assets（GLD） are flowing into the market?

On March 9, 2020, the US Dow Jones Index plunged more than 2,000 points, the U.S. stock market crashed, the investment market was full of fear, and market funds flowed into those safe-haven assets? With the spread of the epidemic, the market's risk aversion has continued to increase, and the stock market has continued to fall. As an investor, to reduce investment risks, you must buy safe-haven assets, reduce the purchase or sale of assets in the stock market, and avoid a sharp decline in the stock market, which will cause serious losses. When market risks continue to increase, investors will continue to buy safe-haven assets. Investors should pay attention to the following several safe-haven assets and use them as safe-havens. Dow Jones Index The first safe-haven asset is gold. Gold（GLD）, as a traditional anti-inflation commodity, has always been the preferred safe-haven asset for investors. GLD The second safe-haven asset is the Japanese yen. Because the Japanese y...

Can Apple（AAPL） icar end the dominance of Tesla（TSLA）?

Beginning in 2014, Apple started a plan for electric vehicles developed by "Project Titan". In the Apple electric car project, in the past few years, internal conflicts, leadership issues, and other issues have affected the entire project. The rumors in 2016 even hinted that Apple had shelved plans for the car, but Apple has overcome the development difficulties and still plans to develop consumers Car, The Apple car project has changed the leadership many times, and hundreds of employees have been laid off during the development process. In the past few years, there have been rumors that Apple has shifted its focus to autonomous driving software instead of just a car. In June 2017, Apple CEO Tim Cook publicly talked about Apple’s work on autonomous driving software, which rarely confirmed Apple’s development work, because Apple usually does not share the details it is studying, but when it comes to cars When it comes to software, due to legal restrictions, it has to apply fo...

NFLX stock forecast 2025: plummeted 22% after the earnings report.

Time to talk about Netflix, which plummeted 22% after the earnings report. First of all, Netflix's financial report this time does have its thunderous place, but part of the reason for the 22% drop in one breath is because the market sentiment has been very bad recently. At this time, the financial report thunderous will be punished more than usual. It is a wake-up call for companies that are about to report financial reports in the future, so we try to hold the stocks in the hands of companies with relatively stable historical financial reports and try to balance our positions as much as possible, to reduce the risk of financial report storms. After all, this quarter In a more dangerous period, back to the point. Let's take a look at Netflix's financial report this time. In the fourth quarter of 2021, Netflix's EPS was $1.33, exceeding analysts' estimates of $0.82, and revenue was just in line with expectations, with $7.71 billion, an increase of 16% year-on-year...

Will China's economy recover as the epidemic is under control?

During the Chinese Spring Festival, novel coronavirus broke out in Wuhan, and the Chinese stock market was hit hard. Subsequently, the Chinese government quickly took strict measures to block Wuhan, a city with a population of tens of thousands of people, to prevent the further spread of the epidemic, and to take corresponding epidemic prevention measures in other cities. When the worst of the epidemic had already occurred, the Chinese stock market quickly rebounded. As the number of infections continues to decline, China's Shanghai Composite Index is expected to rise further. Sars Period Looking back on similar events in the past, the SARS epidemic in 2003, the stock market also made a short-term decline, and then the SARS epidemic was brought under control, the stock market immediately went up for a long time. According to past historical data, the impact of the novel coronavirus epidemic on the stock market may be short-lived. China Fund Capital Flow Howeve...

FNKO VS PLBY: Which NFT stock is more attractive for investment?

The market for NFT stocks is recently booming, and investors have begun to show strong interest in NFT stocks. NFT is a digital asset created using blockchain encryption technology, such as works of art, music or video, etc. Each NFT has a unique digital signature to determine its unique attributes, making it difficult for NFTs to exchange with each other. NFT provides a unique way for content creators to earn income by paying copyright fees or selling their artworks directly to consumers. According to data provided by Forbes Advisor, since November 2017, nearly $174 million has been used for NFT transactions. On May 12, Eastern Time, eBay (EBAY.US) added NFT to its online shopping mall product list. Funko (FNKO.US) and PLBY Group (PLBY.US) recently had the most popular NFT concept stocks, which stock is more attractive for investment? Let's look at what Wall Street analysts think of these two stocks. Funko is a pop culture consumer goods company who...

Bear market coming, gold(GLD) assets become essential

The economic data of the global economic powers have been deteriorating, entering the bear market stage of the economy, and people have become more cautious when choosing asset investment. We should choose investment products with a low correlation coefficient with economic performance and investment products suitable for the current economic cycle. Investors should pay more attention to foreign exchange and commodity markets so that they can add value to your assets. Among many assets, anti-inflation commodities such as gold have become essential assets. Take gold as an example. For many years, gold has been regarded as an anti-inflation commodity by international capital markets and has been regarded as an important asset hedging tool by investors. There is also a saying, "The world bought gold during turbulent times." From basic political theory, we know that gold is not currency, and the currency is naturally gold and silver. Although gold has withdrawn from ...

FinanceLinkway

Search This Blog