SMIC(688981) 国泰君安·2024-10-22 01:15Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 136.80 CNY, up from the previous target of 62.50 CNY [5] - The current price is 90.14 CNY, and the 52-week price range is 40.33-90.14 CNY [6] Core Views - The company is a leader in China's integrated circuit manufacturing industry, benefiting from consumer recovery and domestic self-sufficiency catalysts, with expectations of strong earnings growth [4] - The company is a core player in technology self-sufficiency, with continuous improvement in performance [4] - The company's Q2 2024 revenue was 136.75 billion CNY, a 22% YoY increase and 9% QoQ growth, exceeding guidance of 5-7% growth [9] - Q3 2024 revenue is expected to grow 13-15% QoQ, with gross margins improving to 18-20% from 13.9% in Q2 [9] - The company is ranked third globally and second among pure foundries in the semiconductor manufacturing industry, and is the leader in China [9] Financial Summary - Revenue for 2024E is projected at 56,301 million CNY, a 24.4% YoY increase, with net profit (attributable to parent) at 3,604 million CNY, a -25.3% YoY decline [10] - EPS for 2024E is forecasted at 0.45 CNY, up from the previous estimate of 0.38 CNY [9] - ROE for 2024E is expected to be 2.5%, with a P/E ratio of 199.37x [10] - The company's market cap is 718,563 million CNY, with total shares outstanding at 7,972 million and A-shares at 1,988 million [6] Industry and Valuation - The company is valued at 7.5x PB for 2024, based on a comparison with domestic peers at 2.57x PB and global leader TSMC at 8.24x PB [9] - The semiconductor industry is driven by domestic self-sufficiency, with the company being a key player in China's push for technological independence [9] Performance and Growth - The company has shown strong growth in capacity utilization and wafer shipments, contributing to its outperformance in Q2 2024 [9] - The company's advanced process lines are considered scarce, further enhancing its competitive position in the industry [9]