Guoxin Securities·2024-05-13 08:32Investment Rating - The report maintains a "Buy" rating for Semiconductor Manufacturing International Corporation (SMIC) [1][4]. Core Views - The first quarter of 2024 showed better-than-expected performance with revenue of $1.75 billion, a year-over-year increase of 19.7% and a quarter-over-quarter increase of 4.3%, surpassing guidance [1]. - The gross margin for Q1 2024 was 13.7%, significantly above the guidance of 9%-11%, attributed to increased customer inventory demand [1]. - For Q2 2024, revenue is expected to grow by 5%-7% quarter-over-quarter due to sustained demand and expanded capacity, although gross margin is projected to decline to 9%-11% due to rising depreciation costs [1]. - The company aims for a revenue growth rate exceeding the average of comparable peers for 2024 [1]. - Q1 2024 wafer shipments increased by 43% year-over-year, driven by strong demand in smartphones and consumer electronics [1]. - Capital expenditures in Q1 2024 exceeded $2.2 billion, with a full-year plan of approximately $7.5 billion, maintaining high investment levels [1]. Financial Forecasts - Revenue projections for 2024 and 2025 have been raised to $7.518 billion and $9.160 billion, respectively, from previous estimates of $6.828 billion and $8.893 billion [1]. - Net profit estimates for 2024 and 2025 have been adjusted downwards to $442 million and $633 million, respectively, due to anticipated higher depreciation and ongoing competition in mature processes [1]. - Expected revenue for 2026 is $12.008 billion with a net profit of $910 million [1][2]. - Key financial metrics include a projected P/E ratio of 37.6 for 2024 and a P/B ratio of 0.8 [2][6].