Zhi Tong Cai Jing·2025-11-17 14:30Core 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].