Xin Lang Ji Jin·2025-11-14 02:31Core Viewpoint - SMIC reported strong Q3 earnings with record revenue and significant profit growth, indicating robust operational performance in the semiconductor industry [1] Financial Performance - In Q3, SMIC achieved revenue of 17.162 billion yuan, a quarter-on-quarter increase of 6.9%, marking a new high for single-quarter revenue [1] - The net profit attributable to shareholders was 1.517 billion yuan, representing a year-on-year growth of 43.1% [1] - The gross margin was 25.5%, up 4.8 percentage points from the previous quarter [1] Production Capacity - SMIC's monthly production capacity has surpassed 1 million wafers for the first time, which is more than double that of its domestic competitor, Hua Hong Semiconductor, whose latest monthly capacity is 468,000 wafers [1] - If the production continues to grow at a rate of 2% quarter-on-quarter, SMIC's revenue for Q4 is projected to be around 17.5 billion yuan [1] Market Valuation - The valuation of the A-share semiconductor index has reached historical highs, with the latest P/E ratio for the Sci-Tech Innovation Board at 184 times, placing it in the 91st percentile over the past three years [1][2] - The semiconductor industry’s latest P/E ratio stands at 128 times, also in the 91st percentile, while the Hong Kong stock market's semiconductor index has a P/E ratio of only 40 times, in the 46th percentile, indicating a significant valuation premium for A-shares [1][2] Investment Trends - The Hong Kong market is expected to experience a "slow bull market" due to international capital inflow during the interest rate cut cycle, with new economy sectors like AI technology anticipated to be key investment themes [3] - Southbound capital is primarily from long-term institutional investors focusing on the quality and sustainability of profit growth, with a potential allocation increase of 11 trillion HKD over the next five years [3] ETF Launch - The first ETF focusing on the Hong Kong semiconductor industry has been launched, comprising 70% hardware and 30% software, with SMIC holding a weight of 20.27% in the index [4] - This ETF aims to capture the AI hard technology market trends without including major internet companies like Alibaba and Tencent, enhancing its focus on high-tech sectors [4]