Ge Long Hui·2025-11-17 02:57Core Viewpoint - SMIC's Q3 performance exceeded expectations, with revenue growth and improved profit margins, indicating strong operational efficiency and demand resilience [1] Financial Performance - Q3 revenue increased by 7.8% quarter-on-quarter to $2.38 billion, surpassing the guidance of 5% to 7% growth [1] - Gross margin improved by 1.6 percentage points to 22%, exceeding the guidance of 18% to 20% [1] - Net profit grew by 29% year-on-year to $192 million, also exceeding market expectations by 6% [1] Operational Insights - Capacity utilization rate rose to 95.8%, contributing to the improved financial performance [1] - Reduction in production volatility and adjustments in product mix helped offset the impact of increased depreciation during the period [1] Future Outlook - Q4 guidance aligns with market expectations, despite being a traditional off-peak season, with strong demand anticipated [1] - Current capacity utilization and wafer production are better than Q4 guidance [1] - Capital expenditure for 2025 is expected to remain stable or slightly increase year-on-year [1] - Earnings forecasts for 2025 to 2027 have been raised by 5% to 22%, reflecting an upward adjustment in gross margin expectations [1] Target Price Adjustment - The target price for H-shares has been raised from HKD 58.8 to HKD 93.3, maintaining an "outperform" rating [1]