馃寪 TAIWAN SEMICONDUCTOR MANUFACTURING: ANALYSIS 馃寪
Taiwan Semiconductor Manufacturing Company Limited, together with its subsidiaries, manufactures, packages, tests, and sells integrated circuits and other semiconductor devices in Taiwan, China, Europe, the Middle East, Africa, Japan, the United States, and internationally. It provides a range of wafer fabrication processes, including processes to manufacture complementary metal- oxide-semiconductor (CMOS) logic, mixed-signal, radio frequency, embedded memory, bipolar CMOS mixed-signal, and others. The company also offers customer and engineering support services; manufactures masks; and invests in technology start-up companies; researches, designs, develops, manufactures, packages, tests, and sells color filters; and provides investment services. Its products are used in high performance computing, smartphones, Internet of things, automotive, and digital consumer electronics.
Based on a sample of the last year [4Q/24 TTM], its average margins have been:
- Gross margin: ≈ 54.4%
- Operating margin: ≈ 43.3%
- EBITDA margin: ≈ 67.7%
- Net margin: ≈ 39.2%
- Debt Net / EBITDA: ≈ 0x
Pros:
- Zero net debt
- Oligopolistic position in its market segment
- CAPEX superior than OPEX with increasing of EPS
Cons:
- Slightly high valuation compared to its average
- Potential reduction in demand
- Possible emergence of rivals
Based on the last report, their normalized annual EPS (ADR) was ≈ $7.00 USD and its last average ROIC [TTM] was ≈ 22.75%. If an average Forward PER 24 is set as a benchmark with an EPS intensity of ± 0.4102x, the potential forward spread target for the next 12 months could be:
- Optimistic: ≈ $236.98 USD
- Neutral: ≈ $168.05 USD
- Negative: ≈ $99.12 USD
At least, an EPS (ADR) of $1.30 USD is required for the next quarter, to keep the metrics.
In other hand, if an average Forward EV/EBITDA 15 is set, an EBITDA increases of ± 32%, a Net Debt increases of 00%, a Dividends increase of -5.6% and Shares Outstanding increases of ± 00%, the potencial spread price target for the next 12 months could be:
- Optimistic: ≈ $238.14 USD
- Neutral: ≈ $181.84 USD
- Negative: ≈ $125.78 USD
Finally, according to its current P/S ratio, a possible spread for the next 12 months might be at:
- P/S 13: ≈ $224.56 USD
- P/S 6: ≈ $103.66 USD
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M.F. J. Joel Padilla
Copyright: Joel Padilla 2025
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