SMIC(688981) 华创证券·2024-11-17 18:00Investment Rating - Strong Buy (Maintained) with a target price of 123.7 CNY/53.5 HKD [1] Core Views - Revenue in Q3 2024 reached a historical high of 15.609 billion CNY, a YoY/QoQ increase of 32.50%/14.14%, in line with previous guidance [1] - Gross margin improved significantly to 23.92%, up 10.27pct QoQ, exceeding the guidance range of 18%-20% [1] - Q4 2024 revenue is expected to grow 2% QoQ, with gross margin projected to be between 18%-20% [1] - Local demand continues to rise, with capacity utilization increasing to 90.4% and product mix optimization driving margin recovery [2] - The semiconductor industry cycle is recovering, with AI innovation driving demand growth, particularly in the AI sector, which is expected to grow over 10% [2] - Domestic substitution is accelerating, benefiting leading domestic foundries like SMIC, which is expanding capacity in 28nm and above processes [2] Financial Performance - Q3 2024 revenue: 15.609 billion CNY, +32.50% YoY, +14.14% QoQ [1] - Q3 2024 gross margin: 23.92%, -0.13pct YoY, +10.27pct QoQ [1] - 2024E revenue: 57.806 billion CNY, +27.7% YoY [6] - 2024E net profit: 3.826 billion CNY, -20.7% YoY [6] - 2025E net profit: 5.495 billion CNY, +43.6% YoY [6] - 2026E net profit: 6.796 billion CNY, +23.7% YoY [6] Industry Outlook - The semiconductor industry is expected to continue growing, with AI and HPC sectors driving demand [2] - Domestic substitution is accelerating, with SMIC well-positioned to benefit from this trend due to its leading technology and capacity expansion [2] Valuation - 2025E PB multiple: 6.5x, target price: 123.7 CNY [2] - 2025E PB multiple for H-shares: 2.6x, target price: 53.5 HKD [2]