Group 1 - SMIC reported a capacity utilization rate of 95.8% in Q3, indicating high demand and a supply shortage in its production lines [1] - The company has received a significant number of urgent orders for analog and storage products, including NOR/NAND Flash and MCUs, leading to a temporary decrease in the proportion of mobile business [1] - The global MCU market is projected to reach approximately $31.45 billion in 2024, with a compound annual growth rate (CAGR) of 10.50% from 2024 to 2029, while the Chinese MCU market is expected to grow from $7.84 billion in 2024 to $12.68 billion by 2029, with a CAGR of 10.09% [1] Group 2 - The demand for NOR Flash is expected to increase significantly due to the transition to HBM4 specifications in AI servers, with a projected 50% increase in usage [2] - Manufacturers like Winbond are experiencing full order books and may raise NOR Flash prices by 30% in Q1 of next year, with domestic manufacturers also expected to increase prices by at least 10% [2] - The supply of NOR Flash remains tight due to strong consumer demand and industrial recovery, with no clear increase in supply expected in the short term [2] Group 3 - Shanghai Beiling has launched its NOR Flash products for applications in IoT, energy monitoring, industrial control, automotive electronics, wearable devices, and consumer electronics [3]

早 报 精 选 4、中芯国际：公司承接了大量模拟、存储、MCU等急单，目前存储行业供应存在缺口预计高价位态势将持续。 5、宁德时代第三大股东黄世霖本次询价转让价格为376.12元/股，较昨日收盘价折价3.8%。 宏 观 新 闻 1、 2025年11月17日，中国国务院副总理何立峰与德国副总理兼财政部部长克林拜尔在北京共同主持第四次中德高级别财金对话。 声明中提到，双方欢迎符合条件的上海证券交易所、深圳证券交易所上市公司在法兰克福证券交易所发行全球存托凭证。声明还提 到，双方支持加强在证券、期货及衍生品领域的交流合作。 2、日前，个别日本政客称中方对高市早苗涉台错误言论"反应过度"。日本内阁官房长官也辩称，日本政府在台湾问题上的立场没有 改变，与1972年《中日联合声明》一致。对此，外交部发言人毛宁表示，中方敦促日方本着对历史和双边关系负责的态度，停止越 线玩火，收回错误言行，切实把对华承诺体现在实际行动上。 3、据《金融时报》报道，美国白宫国家安全备忘录以及相关声明称，阿里巴巴集团向中国军方提供了针对美国目标的技术支持。外 交部发言人毛宁在昨日的例行记者会上表示，有关企业已经作出了回应。中国政府高度重视并依法 ...

Core Viewpoint - SMIC reported a strong demand for its production capacity, with a utilization rate of 95.8% in Q3 2025, indicating a supply-demand imbalance in the market. The company has adjusted its order fulfillment strategy due to a shortage of memory chips, particularly affecting its mobile business segment [1][4]. Financial Performance - For the first three quarters of 2025, SMIC's revenue reached approximately 49.51 billion RMB, a year-on-year increase of 18.2%. The net profit attributable to shareholders was about 3.82 billion RMB, up 41.1% year-on-year, with a gross margin of 23.2%, an increase of 5.6 percentage points [1][2]. - In Q3 2025, SMIC's revenue was 17.16 billion RMB, a quarter-on-quarter increase of 6.9%. The net profit for the quarter was 1.52 billion RMB, a year-on-year growth of 43.1%, with a gross margin of 25.5%, up 4.8 percentage points from the previous quarter [1][2][3]. Production Capacity and Market Conditions - SMIC's production capacity utilization increased from 92.5% in Q2 to 95.8% in Q3, with a monthly capacity of approximately 1.02 million wafers [2][3]. - The company has received a significant number of urgent orders for various products, including NOR/NAND Flash and MCUs, leading to a temporary reduction in mobile business share as non-urgent orders were postponed [1][4]. Market Outlook - Despite a traditionally slow Q4, SMIC's revenue guidance remains stable, projecting a quarter-on-quarter growth of 0% to 2%. The company anticipates maintaining a full production line and a gross margin of 18% to 20% [4]. - The ongoing shortage of memory chips has led to significant price increases, with DRAM prices rising by 171.8% year-on-year in Q3 2025. This situation has created a cautious ordering environment among clients, particularly in the networking industry [4][5]. Industry Dynamics - The current price surge in memory chips is attributed to the global demand for AI chips, with major manufacturers shifting their focus to higher-margin products, resulting in a tight supply of standard memory chips [5][6]. - SMIC believes that the supply chain's price increases will continue to impact downstream products, leading to price pressures for OEMs while maintaining a cautious outlook for future supply availability [5][6].

Core Viewpoint - The report from Credit Lyonnais indicates that SMIC's (00981) Q4 guidance is generally in line with market expectations, despite being a traditional off-season, with strong demand anticipated. The company's capacity utilization and wafer production are better than the Q4 guidance, leading to a forecast of stable or slightly increased capital expenditure in 2025, and a 5% to 22% upward revision of profit forecasts for 2025 to 2027, reflecting improved gross margin expectations. The target price for H-shares has been raised from HKD 58.8 to HKD 93.3, maintaining an "outperform" rating [1]. Group 1 - SMIC's Q3 performance exceeded expectations, with revenue increasing by 7.8% quarter-on-quarter to USD 2.38 billion, surpassing the guidance of 5% to 7% growth [1]. - The gross margin improved by 1.6 percentage points quarter-on-quarter to 22%, also exceeding the guidance of 18% to 20%, driven by increased capacity utilization at 95.8%, reduced production volatility, and product mix adjustments [1]. - The net profit for the last quarter grew by 29% year-on-year to USD 192 million, which was 6% above market expectations [1].

Core Viewpoint - The article discusses the impact of the storage "super cycle" on end-user demand and the outlook for domestic chip production trends in China, particularly focusing on the performance and projections of SMIC. Group 1: Financial Performance - SMIC reported a 7.8% quarter-on-quarter revenue growth in Q3 2025, with a gross margin of 22.0%, exceeding company guidance [1] - The company anticipates Q4 revenue to remain flat or grow by 2%, with a gross margin forecast of 18-20%, which is below Bloomberg consensus expectations [1] Group 2: Market Trends - The rapid growth in storage demand for AI applications, such as HBM and eSSD, has led to significant price increases in consumer-grade DRAM and NAND over the past few months [1] - Due to concerns over adequate storage supply, downstream customers in sectors like mobile and automotive are adopting a cautious approach in their 2026 production planning, which may impact the capacity utilization of SMIC's mobile-related process platforms [1] Group 3: Domestic Production Outlook - In Q3, revenue from the Chinese market grew by 11% quarter-on-quarter, increasing its share by 2.1 percentage points to 86%, indicating an accelerated trend towards domestic production in the supply chain [2] - The company is optimistic about the continued strong demand for domestic chip production in sectors such as home appliances and networking in 2026 [2] Group 4: Revenue Forecast Adjustments - The company has lowered its revenue forecasts for 2026 and 2027 by 4.8% and 3.1%, respectively, and reduced net profit forecasts for the same years by 3.0% and 3.6% [3] - After adjustments, the company expects total revenue of $10.81 billion in 2026, representing a 17% year-on-year growth [3] - SMIC is viewed as the only company in mainland China capable of large-scale production of advanced process technologies, which gives it strategic scarcity, and it is assigned a valuation of 4.7x 2026 EPB [3]

Core Viewpoint - SMIC's fourth-quarter revenue guidance indicates flat or 2% growth, reflecting cautious customer behavior in planning for the upcoming year [1] Group 1: Revenue Guidance - The fourth-quarter revenue guidance is expected to be flat or show a 2% increase, with no significant quarter-on-quarter leap [1] - This cautious outlook is attributed to customers adjusting shipment volumes in preparation for next year's plans [1] Group 2: Production Capacity - Despite the flat revenue guidance, the company's production lines are operating at a high capacity utilization rate of 95.8% in the third quarter, indicating strong demand and a supply-constrained situation [1] Group 3: Market Conditions - The smartphone market is experiencing a severe shortage of memory chips, leading to significant price increases, which raises concerns for customers about assembling complete devices [1] - In the networking and communication sector, customers are placing orders more cautiously in the fourth quarter, fearing excess inventory, while market orders are shifting to competitors [1]

Core Viewpoint - The storage chip sector in the A-share market is experiencing a resurgence, driven by price increases from major players like Samsung, which supports market momentum. Additionally, insights from SMIC's investor briefing reveal significant trends in the storage industry [2][3]. Group 1: Market Dynamics - There is a severe shortage of storage chips for mobile phones, leading to substantial price increases. SMIC reported a production capacity utilization rate of 95.8% in Q3, indicating a supply-demand imbalance [3]. - The cautious ordering behavior from clients in the network communication sector is contributing to a conservative outlook for Q4, despite a generally positive recovery in various markets such as consumer electronics and automotive [3][4]. - A 5% fluctuation in supply can lead to exponential price changes in the storage market, highlighting the sensitivity of prices to supply-demand dynamics [5]. Group 2: Inventory and Order Trends - The current tight supply of storage chips has stimulated a clear demand for inventory replenishment, resulting in increased orders, although the future trend remains uncertain [6]. - SMIC has observed three key dynamics: 1. Clients are increasing inventory for analog and power products to capture market share, while the industrial and automotive sectors are replenishing stocks to safe levels [7]. 2. There is a contradictory market sentiment where clients are inclined to stock up on storage chips for complete assembly but remain cautious about future supply uncertainties [7]. 3. SMIC has received a significant number of urgent orders for various products, including NOR/NAND Flash and MCUs, leading to a temporary decrease in the proportion of mobile business as non-urgent orders are postponed [7].

Core Viewpoint - The Hang Seng Index fell by 0.71% on November 17, with southbound capital totaling HKD 913.76 billion in trading volume, resulting in a net inflow of HKD 84.48 billion [1] Trading Activity Summary - Southbound trading included a total of HKD 351.89 billion from the Shenzhen Stock Connect and HKD 561.86 billion from the Shanghai Stock Connect, with net inflows of HKD 41.13 billion and HKD 43.35 billion respectively [1] - The most actively traded stock was Alibaba-W, with a total trading volume of HKD 101.70 billion, followed by the Tracker Fund of Hong Kong and SMIC, with trading volumes of HKD 39.03 billion and HKD 38.54 billion respectively [1][2] - The top net buying stocks included the Tracker Fund of Hong Kong with a net inflow of HKD 37.27 billion, Alibaba-W with HKD 20.71 billion, and Xiaomi Group-W with HKD 2.80 billion [1][2] Continuous Net Buying Stocks - Three stocks experienced continuous net buying for more than three days, with Xiaomi Group-W leading at 14 days, followed by Alibaba-W and Huahong Semiconductor at 3 days each [2] - The total net buying amounts during this period were HKD 98.07 billion for Xiaomi Group-W, HKD 57.02 billion for Alibaba-W, and HKD 1.81 billion for Huahong Semiconductor [2]

Market Overview - On November 17, the Hang Seng Index fell by 0.71%, closing at 26,384.28 points, while southbound funds through the Stock Connect recorded a net purchase of HKD 8.448 billion [1][3] - The total trading volume for the Stock Connect on the same day was HKD 91.376 billion, with a net purchase of HKD 8.448 billion [1] Trading Activity - In the Shanghai Stock Connect, the trading volume was HKD 56.186 billion with a net purchase of HKD 4.335 billion, while in the Shenzhen Stock Connect, the trading volume was HKD 35.189 billion with a net purchase of HKD 4.113 billion [1] - The most actively traded stock in the Shanghai Stock Connect was Alibaba-W, with a trading volume of HKD 6.484 billion, followed by the Tracker Fund of Hong Kong and SMIC, with trading volumes of HKD 3.356 billion and HKD 2.080 billion, respectively [1][2] Net Buying and Selling - In terms of net buying, the Tracker Fund of Hong Kong led with a net purchase of HKD 3.180 billion, despite its closing price dropping by 0.75% [1] - Tencent Holdings recorded the highest net selling amount of HKD 180 million, with its closing price also down by 0.70% [1] - In the Shenzhen Stock Connect, Alibaba-W again topped the trading volume with HKD 3.686 billion, and a net purchase of HKD 1.202 billion, closing flat [2]

Core Viewpoint - SMIC reports a high capacity utilization rate of 95.8% in Q3, indicating strong demand and a supply-constrained situation in its production lines [1] Group 1: Production and Demand - The company has a significant number of orders, leading to a supply-demand imbalance [1] - The guidance for Q4 does not show a substantial increase due to a severe shortage of memory components in the mobile market, which has resulted in rising prices [1] - Customers are cautious about future supply uncertainties, leading to a trend of increased inventory for memory components to ensure complete assembly of devices [1] Group 2: Impact on Business Operations - SMIC has taken on numerous urgent orders for analog and memory products, including NOR/NAND Flash and MCUs, and has postponed some non-urgent mobile orders to ensure timely delivery [1] - This shift has resulted in a temporary decrease in the proportion of mobile business [1] - The impact of memory supply issues is twofold: it boosts current orders but creates uncertainty for the upcoming year [1] Group 3: Market Dynamics - The industry is experiencing a supply gap, with expectations that high price levels will persist [1] - The verification cycles for NOR Flash, NAND Flash, and MCUs are lengthy, and the barriers to entry for new competitors are high, making it difficult for them to quickly replace existing suppliers [2]