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

ROKU stock forecast 2025: worth holding for a long time

1.The Roku Channel (TRC). The Roku Channel (TRC) will be a huge driving force for the company's growth. I think the market has not yet realized the huge potential of TRC. Currently, TRC is watched by 70 million people, which has doubled from last year. The growth rate is astonishing. Therefore, the ability of advertising monetization is getting stronger and stronger. ROKU mentioned in the Q1 quarterly report that if content providers promote their subscriptions in TRC, the effect will be twice as good as just on the ROKU platform. This fully shows the extremely strong marketing capabilities of TRC. The exclusive content of ROKU license Cipher has also become the most popular show in TRC, and then ROKU original packaged after the acquisition of Quibi will be launched, which will further increase the user viscosity of TRC. Roku's CEO said that the TRC flywheel has been turned, and the market seems to have not had time to digest this benefit. SVOD on the market i...

The relationship between Dow theory and the stock market!

Many technical analyses, such as morphological analysis and wave theory, use the Dow theory as the basis for the evolution of original technical analysis. Let's talk about the relationship between the Dow theory and today's stock market. Starting from the three most widely known theorems, theorems, market behavior is inclusive and digestive, market behavior follows the trend, and history will repeat itself. Among these three theorems, there are many Charles investment ideas, which can also be said to be the backbone of technical analysis. Charles' first theorem hoped that the market was originally a gathering place for hundreds of news. For example, Jun A believes that a country's civil war and unstable economy caused it to sell the shares of local companies; Jun B learned that the local companies will still have considerable profitability next year, so he bought the shares of local companies; Jun received a third different message and made an investment decision and...

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 ...

How to judge the diffusive horn pattern ?

As an investment trader, you must understand the use of chart technology analysis to determine the position of market transactions. Now let's talk about a common pattern in chart technical analysis, which is the diffuse speaker pattern. Diffusion horn patterns are different from trend patterns and horizontal patterns. Diffusion horn patterns are more difficult to judge than trend patterns and horizontal patterns, and often cause losses to investment traders. So, how do investment traders judge the spreading horn pattern and make favorable investment transactions? S&P500 Index The price trend of the diffusive horn pattern. When the price rises over some time, then the price falls, and falls below the recent low, then rises, and rises through the last high. It keeps expanding in two directions. If we connect the high point and the low point with straight lines, respectively, we can show a horn shape, so it is called a diffuse horn shape. Because of this, some i...

The era of negative US interest rates coming?

Recently, the US Federal Reserve suddenly cut interest rates and US stocks fell sharply. Most investors believe that the ten-year bull market for US stocks has ended. In terms of the US dollar index, after a period of decline, the US dollar index rebounded sharply, indicating that risk aversion was high, and market funds were flowing to the US dollar to hedge. The Fed ’s interest rate cuts have not saved the US stock market. The Fed ’s interest rates are now very low. If the Fed continues to cut interest rates in the future, the United States will soon enter the era of negative interest rates. Take Europe and Japan as examples. Negative interest rates have not restored the country ’s economy. The future economic situation of the United States is not optimistic. The reason for the negative interest rate is that the investment must be profitable, otherwise, it will not be invested. If the profit is low or loss, the investor will directly deposit the profit to the bank. When socia...

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...

ARKK VS ARKW, ARKQ, ARKG, ARKF, How to choose ARK Innovation ETF?

Which ARK Innovation ETF is best? Let’s perform an Ark ETF review. Today, I will introduce to you the five actively managed ETFs in ARK INNOVATION. Let’s take a look at which types of companies they have invested in so that you can choose the industry you like to invest in. ARK INNOVATION was founded by Catherine Wood. This investment company is a revolutionary and innovative company that specializes in investment. Their company currently manages seven different types of ETFs, five of which are actively managed ETFs, and the other two One is an exponential passive ETF, Simply put, the biggest difference between these two ETFs is that for actively managed ETFs, they will frequently trade the company stocks in the fund, so the proportion of the company he holds will always change, while the index-type ETF is as they think. After purchasing the company, you will not be able to move it again. It is very similar to S&P500 or QQQ, except that the holding company is different. Then let...

Three stages of bull and bear markets!

The bull and bear markets of the stock market are traditional indicators of the business cycle. As an investor, distinguishing bull and bear markets in the stock market and grasping the long-term development direction of the market can avoid the impact of short-term market fluctuations and the impact of complex market information. For example, the market fluctuations brought by news information, the sudden and sharp drop in market prices, and the impact of investor sentiment have led to making wrong investment trading decisions. The stock market is in a bull market, most asset prices will continue to rise, and the stock market is in a bear market, most asset prices will continue to fall. Both bull and bear markets are divided into three stages, so how to tell whether the stock market is in a bull or bear market, and at what stage. S&P500 Index What is a bull market? In the first stage of the bull market, after the market economy was in recession, the stock price fe...

Why has international oil(USO) prices plummeted?

As OPEC and Russia failed in negotiations and could not reach an agreement to reduce production, Saudi Arabia issued a comprehensive production increase announcement. Russia followed Saudi Arabia to increase production. Due to the sharp increase in oil supply, international oil prices plummeted, and US stocks were affected by the spread of the epidemic, and international oil prices The plunge, the U.S. stock market plummeted, triggering multiple fuses. S&P500 Index Oil is a commodity whose price is affected by supply and demand. When oil production increases, supply increases, prices fall, and at the same time affected by the epidemic, demand decreases, and prices also fall. Oil supply increases and demand decreases, which is the main cause of the plunge in international oil prices. In terms of oil supply, since the United States developed shale oil, US oil production has become the world's largest. The production cost of shale oil is more than US $ 40, which is the ...

The stock market entering a bear market？

On March 6, 2020, the US stock market continued its decline today after a few days of rebound. Is this the beginning of a bear market in the stock market? Next, let's analyze one important indicator of entering the bear market, Treasury bonds yield. What is the yield of Treasury bonds? Treasury bonds are a tool issued by the state to raise funds. When the bonds are issued, they promise to repay the principal and interest on a specified date. The ratio of the return of Treasury bonds to the principal invested is the return of Treasury bonds. The main factors affecting bond yield include coupon rate, maturity, face value, holding time, purchase price, and sale price. Rising bond yields and falling bond prices mean investors are selling bonds, turning to invest activities, or entering the stock market. In a healthy economic environment, the longer the Treasury bonds, the higher the bond yield. Because short-term bonds are more liquid, investors are willing to accept lower ...

FinanceLinkway

Search This Blog