SMIC(00981) 第一上海证券·2024-08-21 06:39Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 21.00, indicating a potential upside of 23.55% from the current stock price of HKD 17.00 [1][3]. Core Insights - The company reported Q2 2024 revenue of USD 1.90 billion, a year-on-year increase of 21.8% and a quarter-on-quarter increase of 8.6%, slightly above market expectations [1]. - The guidance for Q3 2024 indicates a revenue increase of 13%-15% to USD 2.15-2.19 billion, surpassing the consensus estimate of USD 1.87 billion, with a gross margin expected between 18%-20% [1]. - The demand for consumer electronics is recovering, contributing to a 35.6% revenue increase, particularly in gaming, toys, and smart furniture [1]. Summary by Sections Financial Performance - Q2 2024 operating profit was USD 90 million, a 9.2% increase year-on-year, while net profit decreased by 59.1% to USD 160 million, resulting in a net profit margin of 8.7% [1]. - The average monthly capacity for 8-inch wafers is projected to reach 850,000 pieces in 2024, with a capital expenditure guidance of USD 7.5 billion for the year [1][4]. Market Outlook - The semiconductor cycle is expected to recover, driven by a gradual increase in capacity utilization rates and a rebound in consumer electronics demand [1]. - The company anticipates a revenue CAGR of 27% and a net profit CAGR of 14.1% over the next three years [1]. Valuation Metrics - The report estimates a price-to-book (PB) ratio of 1.0 for valuation purposes, supporting the target price of HKD 21.00 [1][3]. - The company holds a 5.5% market share in the global wafer foundry industry, which is expected to increase to 8.0% by year-end [1].