Sou Hu Cai Jing·2025-10-14 04:15Core Viewpoint - The article discusses the investment potential of SMIC (Semiconductor Manufacturing International Corporation), highlighting its high valuation and the ongoing debate on whether to buy during a pullback or to enter during an upward trend [1] Valuation Screening - SMIC's current stock price is 131.31 yuan with a TTM P/E ratio of 241.31, which is considered high but reflects market expectations of domestic substitution and technological breakthroughs [3] - In the short term, the stock has seen a decline of 3.46% over the past five days, but a 14.42% increase over the past 20 days indicates a still positive medium-term trend [3] - The conclusion from the valuation screening is that while the valuation is high, it has underlying expectations that support it, suggesting caution in both buying and selling [3] Fundamental Screening - SMIC's fundamentals show short-term pressure but strong long-term potential, with projected revenue of 32.3 billion yuan in the first half of 2025, a 23% year-on-year increase, and a net profit of 2.3 billion yuan, up nearly 40% [4] - 84% of SMIC's revenue comes from the domestic market, supported by strong domestic demand and product structure optimization [4] - The company holds a leading position in both mature and advanced processes, with significant orders from Huawei and ongoing R&D in 5nm technology, indicating strong support from national policies [4] - Short-term challenges include a 17% year-on-year decline in net profit for Q2 due to rising equipment depreciation costs and price competition in mature processes [4] Industry Trends - SMIC is positioned in two high-demand sectors: AI computing chips and automotive electronics, both of which are experiencing significant growth [5] - The ongoing need for domestic semiconductor production ensures that SMIC remains a key player in the industry, with a stable demand from numerous domestic chip design companies [5] Investment Strategy - For short-term investors (days to weeks), the strategy is to wait for signals and avoid chasing high prices, with specific price targets and stop-loss levels outlined [6] - For medium-term investors (1-3 months), the focus should be on waiting for price corrections or improvements in quarterly earnings to build positions gradually [6] - Long-term investors (over six months) should focus on the company's ability to overcome technological challenges and its role as a pillar of China's semiconductor industry, with a buying range suggested between 110-120 yuan [6]