Zhi Tong Cai Jing·2026-02-12 05:37Group 1 - UBS raised the revenue forecast for SMIC (00981) for 2026 to 2029 by 4% to reflect greater domestic opportunities and improved supply-demand dynamics [1] - The profit forecast was lowered by 8% to 18% due to higher depreciation burdens, with a target price set at HKD 76 based on a projected price-to-book ratio of 3.3 times and a long-term return on equity of 11.3% [1] - SMIC's net profit for the last quarter increased by 4.5% quarter-on-quarter, exceeding previous guidance of 0% to 2% and market expectations of 1.3% growth, driven by slight increases in wafer shipments and average selling prices [1] Group 2 - The management predicts that capital expenditures this year will remain at USD 8.1 billion, with a 40 kW per month increase in 12-inch capacity by year-end to meet strong domestic demand from fabless companies [1] - The focus will be on expanding in areas with tight supply, such as BCD chips and memory-related products [1] - The management forecasts flat sales for the first quarter, with a gross margin between 18% and 20%, and expects sales growth to exceed the industry average this year [1] Group 3 - The management anticipates a 30% year-on-year increase in depreciation expenses this year, which will continue to exert pressure on gross margins [2] - UBS currently forecasts a gross margin of 20% for the first quarter and 21.2% for the entire year, with depreciation pressure offset by a more favorable pricing environment [2]