With the continuous development of the financial market, the exchange of information between businesses and investors has become particularly important. In this bridge of information exchange, the corporate earnings call (commonly known as the earnings call) plays a pivotal role. Whenever a listed company holds an earnings call, investors in the market pay special attention, including industry giants like Taiwan Semiconductor Manufacturing Company (stock code: 2330).

Understanding Earnings Calls

An earnings call is an event organized by a company itself or through a corporate securities firm, aimed at providing comprehensive disclosure of the company's operating conditions, strategic plans, and future prospects to institutional investors. It serves not only as a platform for disclosing financial information but also as a crucial means for investors to obtain firsthand information. Typically, earnings calls cover:

• Detailed explanation of the current financial situation, involving financial data and performance;
• Analysis of the company's operating environment and competitive situation;
• Outlook on future market trends and company development strategies;
• Disclosure of major policies, risks, and opportunities.

Earnings calls not only enable investors to understand the current status and future plans of the company but also help build investors' trust and understanding of the company's management team, thereby providing deeper insights into the company's development direction.

Who is Eligible to Attend?

Earnings calls are primarily targeted at institutional investors, such as:

• Securities investment trust fund managers
• Financial institution executives and analysts
• Life insurance company asset management department researchers, etc.

Individual retail investors generally cannot participate directly in earnings calls. However, they can obtain information about earnings calls through various channels, including company websites, public information platforms, and specific investor interaction activities.

Participants in earnings calls play different roles, but all are crucial. The corporate management team serves as the provider and interpreter of information, directly influencing investors' confidence and decisions. Institutional investors, on the other hand, act as recipients and analysts of information, guiding fund flows and investment strategies through their understanding and interpretation of company reports. This two-way information exchange and interaction contribute to optimizing the operation of capital markets and improving resource allocation efficiency.

The frequency of earnings calls

The frequency and process design of earnings calls directly impact the effectiveness of information dissemination and investor participation. In Taiwan, listed companies hold earnings calls at least once a year, ensuring that investors are promptly informed about the latest developments in the company. In the United States, earnings calls are typically held after quarterly financial reports are released, allowing investors to promptly access the latest financial information and business strategies.

The design of the earnings call process is also crucial, with ample interactive sessions helping to promote information exchange and understanding, thereby enhancing investors' knowledge of and confidence in the company.

Meeting Process

The typical process of an earnings call consists of two parts:

1. Corporate operations report: The company's management team provides a detailed overview of the company's operational performance, financial details, reasons for performance growth or decline, operational investment strategies, and future development plans, enabling investors to gain a deeper understanding of the company's current operational status.
2. Question and answer session: After the company management team's report, institutional investors present at the event raise questions, typically focusing on unclear aspects of financial statements, market rumors, new product information, comparisons with competitors' strengths and weaknesses, or future market planning. The company management team then responds accordingly.

Key Points of Investor Attention

Investors should pay particular attention to the following aspects during earnings calls:

1.Company's future outlook:

• Whether the company's revenue and gross profit margin can continue to improve
• Whether the product competitiveness is superior to competitors
• Whether profitability can continue to grow
• Whether the production yield can be greatly improved

2.Company's capital expenditures:

• Whether the company will increase capital expenditures in the future (such as expanding factories, purchasing equipment)
• This reflects the company's confidence in its prospects

3.Company's measures in response to current events:

• The company's ability to deal with challenges brought about by unexpected events (such as the COVID-19 pandemic)
• Demonstrating the company's crisis management capabilities and adaptability

How to Access Earnings Call Information

Taiwan Stock Exchange:

1.Company website:

Some companies may publish earnings call materials in the "Investor Relations" section of their official website. For example, TSMC provides quarterly operational reports on its official website.

2.Public information observation station:

• They offer comprehensive earnings call information, briefings, and audiovisual materials.
• Access the "List of Corporate Briefings" to query.

3.Over-the-counter trading center:

• Provides audiovisual materials of earnings calls for over-the-counter listed companies.

4.Stock Exchange:

• Offer audiovisual materials related to earnings calls organized by the stock exchange.

US Stock Market:

1.Company website:

• Go to the official website, select the "Investor Relations" section, and search for Earnings Calls.

2.Financial News Websites:

• Platforms like Seeking Alpha and The Motley Fool provide information related to earnings calls.
• On the Seeking Alpha website, enter the stock code and click on "Transcripts" to view relevant information.
• Similarly, on The Motley Fool website, enter the stock code and click on "Earnings" to access earnings call-related information.

3.Brokerage Trading Platforms:

• Brokerage platforms for US stocks such as Futu Securities (moomoo trading platform), Tiger Brokers, and Chang Bridge Securities allow users to check the schedule of earnings calls for listed companies, watch or listen to earnings calls online, and obtain transcripts of earnings calls.

Conclusion

Earnings calls serve as a crucial channel for communication between companies and investors, offering comprehensive insights into corporate operations, market strategies, and future developments.

Investors should leverage earnings calls to gain a deeper understanding of a company's situation, enabling them to make wiser investment decisions. By focusing on a company's future prospects, capital expenditure plans, and responses to current events, investors can better assess the long-term investment value of the company.