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Singapore marketing feedback: Slightpositivebias,geopolitical caution Industry Overview 08 November 2024 Optimismamidgeopoliticalchallenges EquityAsia-PacificSemiconductors We met with 30 investors in Singapore between Nov 4-7. Overall, the feedback on marketoutlook was neutral to slightly positive. Investors maintain a positive view on thefundamentals and growth prospects for the semiconductor industry, although somehesitations persist, primarily around elevated valuations and geopolitical uncertainties. Keytopics of interest included semiconductor stocks under geopolitical influences, Al, TSMC.MediaTek, and ASE. We maintain our Buy ratings on TSMC and MediaTek, as we believeboth companies demonstrate strong potential within the current industry landscape. Brad Lin >>Research AnalystMerill Lynch (Taiwan)+886223763728brad.lin@bofa.com Mike Yang >>ResearchAnalystMerrill Lynch (Taiwan)mike.c.yang@bofa.com Navigatinggeopolitical dynamics Investors remain focused on the potential impacts of geopolitical issues, especially inlight of the recent U.S. election. Many had already factored in a bearish scenario,anticipating challenges from tariffs, tech restrictions, and margin pressures associatedwith U.S. capacity expansions. However, following the confirmation of the election result,there seems to be a sense of easing tension as one key uncertainty has been resolved.This shift appears to make investors more open to buying semiconductor stocks. Date Published Relevant reports: Trump re-election impactGlobalWafers DG to Neutral Nov-06, 2024MediaTek 30 resultsTSMC 3Q results Nov-07,2024Oct-30,2024Oct-17,2024 While geopolitical risks persist, we do not adopt an excessively cautious stance andexpect the industry to manage these without major disruptions to its fundamentals. Inour view, companies like TSMC, UMC, and GlobalWafers are better positioned due totheir growing U.S. presence, which may serve as a buffer against geopolitical headwinds. Please refer to Exhibit 2 foracronyms Al remains a prioritywith some interest in non-Al Al-related stocks, including NVIDIA, Broadcom, and TSMC, continue to attract positiveattention, thanks to the strong structural growth trend in Al. Investor interest remainshigh in the GPU and ASIC supply chains, highlighting the importance of Al-drivendemand. Within the OSAT space, long-term prospects for ASE in advanced packaging arerecognized, although near-term CE weakness may pose challenges. Conversely, KYECstands to benefit from the ramp-up of Blackwell from 4Q24 into 2025. For non-Al, wesee investor expectations as low given the recent earnings disappointments acrossseveral non-Al firms, though we also see signs of optimism emerge. FocusonBuy-ratedTSMCandMediaTek Taiwan's semi sector remains a core area of investor interest, esp. given its significantrole in driving Al growth. TSMC stands out as a clear leader due to its technological edgeand critical role in both front-end and back-end processes. We observed increasinginterest in MediaTek as well, despite ongoing debates about the China smartphonemarket and concerns around its valuation. Both TSMC and MediaTek are well-positionedto capitalize on long-term industry trends and trade at attractive valuations, in our view. This research report provides general information only. No part of this report may be usedor reproduced or quoted in any manner whatsoever inTaiwan by thepress or otherpersons without the express written consent of BofA Securities >> Employed by a non-US affiliate of BofAS and is not registered/qualified as a research analystunder the FINRA rules Refer to Other Important Disclosures" for information on certain BofA Securities entities that takeresponsibility for the information herein in particular jurisdictionsBofA Securities does and seeks to do business with issuers covered in its researchinterest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.Refer to important disclosures on page 7 to 9. Analyst Certification on page 4. PriceObjectiveBasis/Riskonpage3.12761084 Timestamp: 08 November 2024 12:02AM EST Exhibit 1: Valuation comparison Semi names benefit from long-term Al uptrend Exhibit 2: Acronyms We provide acronyms and the corresponding full names in the table below Priceobjectivebasis&risk ASE Technology Holding (XSRIF/ ASX) We value ASE Technology Holding at NTS190 per share (USS13 for ADR), based on 1.9x2025E P/B (at mid-end of its historical range), in view of solidified industry position in Alera. We use P/B ratio to value ASE as we believe asset based valuation can moreaccurately reflect ASE's improvement in its operation, profitability and return following amajor acquisition. Downside risks to our PO are 1) share loss and/or ASP erosion owing to Chinese players'cannibalization and/or ASE's worsening execution, 2) weakening end demand due touncontrollable matters, such as macro halt