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The subject of today’s report is “Sold Out, Change Your Faith, A Stock More Worth Buying Than UMC.”
Wanbao Investment Gu Cai Mingzhang emphasized that on Thanksgiving, the US stock market is expected to fall into a wait-and-see mode, because US stocks only traded for three and a half days. this week. The bullish news includes the announcement of senior cabinet members by Biden’s cabinet line-up, and vaccination will begin next month. However, the bad news is that almost 200,000 people were recently diagnosed in a single day. The CDC strongly recommends canceling the Thanksgiving vacation trip.
However, the most critical piece of information is that October’s personal consumption spending will be announced this week. Last month’s retail sales data fell short of expectations, and weak consumer spending will further confirm the decline in GDP growth in the fourth quarter. Currently, the research institute preliminarily estimates that GDP in the fourth quarter will increase by about 2% annually, but with the expansion of the lockdown and winter factors, US GDP in the first quarter of next year, JP Morgan Chase forecasts that it will contract by 1%.
At this time, international funds turned to Asian stock markets to protect themselves. On Monday, Korean equities were up 1.9% and this year they were up 18%. Taiwanese shares rose 1.2%, setting a record. This year, they are up 16%. If you add the currency appreciation, the total rate of return exceeds 20%. By contrast, the US Dow Jones stock market rose 2.5% this year, the S&P 500 was up 10.4% and the Nasdaq was up 32%, but 40% of the increase was concentrated in FAANG. deduces FAANG, the performance of the Nasdaq in the United States is still not as good as that of Asia. Taiwan and South Korea stocks.
Asian stocks are dominated by tech stocks, which are the Taiwanese and South Korean stock exchanges. International funds prefer weighted stocks from the Taiwanese and South Korean equity markets and have a stock-out effect, targeting smelting.
Among them, 8-inch production capacity has been difficult to find since the second half of 2019. There are almost no suppliers for 8-inch equipment, which makes 8-inch machines a rare commodity, and wafers of 12 inches is 2.3 times the production volume of 8-inch wafers. Generally speaking, 8-inch expansion is not cost-effective, but products such as PMIC power management chip and LDDI oversized panel driver chip are more cost-effective to produce in 8-inch, and there is no need to move to a 12-inch advanced manufacturing process.
Entering 5G, the PMIC demand for smartphone base stations has multiplied. UMC’s 8-inch foundry (2303-TW) accounted for 46% of revenue. The EPS in the first three quarters was 1.49 yuan, and the annual estimate was 2.2 yuan. Compared to 17 times, compared to TSMC (2330-TW), which is based on 12-inch wafers, the current P / E ratio is 26 times.
UMC has discontinued advanced processes below 12nm, so the price / earnings ratio should be 70% to 80% and 18 to 20 times that of TSMC. Of course, the biggest gain now is marrying Toshiba’s two 8-inch factories at a cost of NT $ 10 billion. In early 2019, World Advanced (5347-TW) bought GlobalFoundries Singapore’s 8-inch factory for 7.1 billion yuan.
Obviously UMC’s current selling price is too high, especially the old Japanese factories have high costs. This is a short-term gain for UMC, but you can buy from high-end 8-inch factories in the long run. TSMC is the hero who makes the times, UMC is the hero who makes the times, UMC activated the daily limit on Monday, but the 8-inch casting capacity is mainly due to the shortage of PMIC. Compare with Silicon Power-KY (6415-TW) and Zhixin (8081-TW), Analogue (3438-TW), Tongjia (3588-TW) can be seen by the daily limit or Monday’s increase.
Wanbao Investment Gu Cai Mingzhang emphasized that the expansion and extension of the blockade in Europe and the United States will benefit which industries in Asia, including NB and components, the most representative is PMIC. Second, gaming graphics cards are represented and shipping is based on container ships.
Qingyun (5386-TW) EPS graphics card was 0.87 yuan in the first three quarters, which is higher than 0.66 yuan last year. The share price went up 7 consecutively and became the number one share on the Taiwan stock market recently. Currently, graphics cards are out of stock and out of materials, and the supply chain power supply BT control chip backing board is out of materials until early next year. Bitcoin will challenge the skyrocketing price. In addition to rigid demand, speculative demand will increase. The price will change your beliefs. Rising Bitcoin has changed investors’ views on Bitcoin. Out of stock and materials, fear of losing the market, heavy buying is flooding the graphics card, and Shaoxun (6150-TW) has doubled from the lowest point in a month, but conservative investors are advised to seek stocks. underrated in esports games. .
Wanbao Investment Gu Cai Mingzhang emphasized that after this wave of corrections, the P / E ratio of Gigabyte (2376-TW) and Thermaltake (3540-TW) is only about 10 times, and it is estimated that Gigabyte’s fourth quarter revenue will decrease by 5% quarter-on-quarter. Based on the above estimate of 10% of the legal entity, Thermaltake’s EPS for the first three quarters is 5.5 yuan, and the annual estimate is 7 yuan.
In addition, it can be seen that this year’s increase in game hardware, but the game software, except for the 85% increase in the image (3293-TW) this year, no other performance has been shown. But recent low prices, game software stocks that originally had negative returns this year, Cayenne (4946-TW), Huayi (3086-TW), Ou Maigu (3687-TW) and Yuquan (6169-TW) all rose by 2 ~ 3 The main reason for the suspension is that the game will enter the traditional high season from the fourth quarter to the first quarter of next year. The remaining industries may be hit by the spread of the epidemic in Europe and the United States and fall into a slowdown in demand, but game stocks usher in strong demand in peak season.
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