SMIC(00981) 交银国际证券·2024-11-08 12:54Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 32.00, indicating a potential upside of 12.1% from the current closing price of HKD 28.55 [1][3][8]. Core Insights - The company's 3Q24 performance showed continued improvement, with revenue reaching USD 2.171 billion, a historical high, driven by increased demand in consumer electronics and higher product prices. The gross margin was 20.5%, exceeding expectations [1][2]. - The management's guidance for 4Q24 indicates revenue growth of 0-2% year-on-year and a gross margin of 18-20%, slightly above previous forecasts [1][3]. - The company is progressing steadily with its capacity expansion plans, expecting to add 30,000 12-inch wafers in 2023/24 and a slower pace in 2025, aligning with market demand recovery in the semiconductor sector [2][3]. Financial Summary - For 2024, the revenue forecast has been slightly adjusted to USD 8.017 billion with a gross margin of 17%. The 2025 revenue is projected at USD 9.094 billion with a gross margin of 20.1% [3][9]. - The net profit for 2024 is estimated at USD 664 million, with a significant increase expected in 2025 to USD 1.028 billion [5][9]. - The company’s capital expenditures for 2024 have been revised down to USD 7.67 billion, with expectations of a decrease in capital spending in the second half of 2024 [1][3]. Market Position - The company has a market capitalization of approximately HKD 170.9 billion and has shown a year-to-date price change of 43.76% [4][9]. - The stock has a 52-week high of HKD 33.30 and a low of HKD 14.02, indicating significant volatility and potential for growth [4][9]. Performance Metrics - The gross margin for 3Q24 was reported at 20.5%, a 0.6 percentage point increase year-on-year, while the net profit margin was 6.9% [6][9]. - The company’s earnings per share (EPS) for 2024 is projected at USD 0.65, with a recovery expected in subsequent years [5][9]. Capacity and Demand Outlook - The management anticipates a double-digit growth in wafer shipments for 2025, primarily driven by the recovery in consumer electronics, smartphones, and personal computers [2][3]. - Despite a slow recovery in industrial and automotive sectors, the company plans to invest in power and analog devices to meet customer demand, including from new energy vehicle manufacturers [2][3].