SMIC(688981) 华安证券·2024-11-21 01:39Investment Rating - Maintain "Overweight" rating [2] Core Views - SMIC achieved record-high revenue in Q3 2024 driven by strong domestic demand for wafers, with revenue reaching RMB 15.6 billion, up 14% QoQ and 33% YoY [4] - Q3 gross margin improved significantly to 21%, up 7 percentage points QoQ, due to higher ASPs for 12-inch wafers [4] - Capacity utilization exceeded 90% in Q3, up 5 percentage points QoQ [4] - SMIC expects Q4 revenue to grow 0-2% QoQ with gross margin between 18-20% [4] - The company added 20k 12-inch wafer capacity in Q3 and plans to add another 30k in Q4, reaching total capacity of 950k 8-inch equivalent wafers by year-end [4] - CAPEX in Q3 was RMB 8.4 billion, down 48% QoQ, returning to Q1 2023 levels [4] Financial Performance - 2024E revenue is projected at RMB 57.5 billion, up 27.1% YoY [5] - 2024E net profit attributable to parent company is estimated at RMB 3.8 billion, down 20.2% YoY [5] - 2024E gross margin is forecast at 19.4%, with net margin of 6.7% [5] - ROE is expected to be 2.6% in 2024, improving to 3.9% by 2026 [5][7] - 2024E EPS is projected at RMB 0.48, with P/E of 193x and P/B of 5.11x [4][7] Industry Outlook - China's 12-inch wafer capacity is expected to account for 25% of global capacity by 2026, becoming the world's largest [4] - SMIC is well-positioned to benefit from the localization trend in wafer manufacturing [4] - The semiconductor industry is experiencing a moderate recovery, with consumer markets gradually improving [4] Valuation and Projections - 2024-2026 net profit attributable to parent company is projected at RMB 3.8 billion, RMB 4.9 billion, and RMB 6.1 billion respectively [4] - 2024-2026 EPS is estimated at RMB 0.48, RMB 0.61, and RMB 0.77 respectively [4] - 2024-2026 P/E ratios are projected at 193x, 152x, and 122x respectively [4] - 2024-2026 P/B ratios are estimated at 5x, 4.9x, and 4.7x respectively [4]