Xin Lang Cai Jing·2026-02-12 02:57Core Viewpoint - UBS report indicates that SMIC's Q4 profit increased by 4.5% quarter-on-quarter, outperforming seasonal expectations and market forecasts, primarily due to a slight rise in wafer shipment volume and average selling prices of mixed products [1] Financial Performance - Q4 profit growth was supported by a 64% quarter-on-quarter increase in other income due to the year-end shipment of photomasks [1] - Gross margin stood at 19.2%, aligning with the guidance of 18% to 20%, but below the market expectation of 20% [1] - Gross margin declined by 2.8 percentage points quarter-on-quarter due to rising depreciation expenses [1] Demand and Pricing - Management indicated strong and sustained demand for BCD processes, memory, and related products, with supply unable to meet demand, and price increases expected by 2025 [1] - Other product areas such as CIS and LCD driver chips are experiencing stable pricing as industry capacity is reallocated to BCD and other high-demand sectors [1] Forecast Adjustments - UBS raised SMIC's revenue forecast for 2026 to 2029 by 4% to reflect greater localization opportunities and improved supply-demand dynamics [1] - Profit forecasts were lowered by 8% to 18% due to higher depreciation burdens [1] - UBS maintains a "Neutral" rating with a target price of HKD 76 [1]