SMIC(SH:688981) CAITONG SECURITIES·2024-08-15 08:03Investment Rating - The investment rating for the company is "Accumulate" (maintained) [1] Core Views - The company's Q2 2024 financial report shows revenue of $1.9 billion, a year-on-year increase of 21.8% and a quarter-on-quarter increase of 8.6%. The gross margin is 13.9%, down 6.4 percentage points year-on-year but up 0.2 percentage points quarter-on-quarter. The net profit attributable to shareholders is $165 million, down 59.1% year-on-year but up 129.2% quarter-on-quarter [3][4] - The increase in revenue and gross profit exceeded expectations, driven by a significant increase in wafer sales. The company shipped 2.112 million wafers in Q2 2024, a quarter-on-quarter increase of 17.7%. However, the average selling price (ASP) decreased by 8% quarter-on-quarter, which partially offset the revenue growth [4] - The overseas revenue proportion has increased, with the consumer electronics sector showing significant growth. In Q2 2024, the revenue proportions from China, the US, and the Eurasian region were 80.3%, 16.0%, and 3.7%, respectively. The consumer electronics sector has become the largest revenue source, surpassing smartphones [4] Financial Performance Summary - The company expects to expand its 12-inch wafer capacity by 60,000 pieces in 2024, with an anticipated increase of 46,000 pieces in the second half of the year. The guidance for Q3 2024 indicates a revenue increase of 13% to 15% and a gross margin between 18% and 20% [4] - The projected revenues for 2024-2026 are 587.35 billion, 685.44 billion, and 789.62 billion yuan, with net profits of 34.02 billion, 40.46 billion, and 50.56 billion yuan, respectively. The corresponding price-to-earnings (PE) ratios are 114.47, 96.27, and 77.03 times [4][5]