Core Viewpoint - The acquisition of 49% stake in SMIC North by SMIC for 40.6 billion yuan is beneficial for shareholders in both the short and long term [1] Group 1: Financial Impact - The acquisition is expected to increase SMIC's net profit attributable to shareholders by over 120 million USD by 2026, positively impacting earnings per share [1] - The deal is anticipated to enhance SMIC's book value per share by a single-digit percentage [1] Group 2: Strategic Developments - SMIC's investment of approximately 7.78 billion USD in SMIC South is seen as a positive move for the development of advanced process technology in China [1] - This capital injection is likely to further strengthen the earnings per share for SMIC shareholders [1] Group 3: Revised Projections - The diluted earnings per share estimates for SMIC have been raised to 0.16 USD and 0.18 USD for 2026 and 2027, respectively [1] - The book value per share estimates have been adjusted to 3.05 USD and 3.27 USD for the same years [1] - The target price for SMIC has been increased to 93 HKD, maintaining a "buy" rating [1]

Group 1 - Core viewpoint: The report from CMB International maintains a "Buy" rating for SMIC (00981) and raises the target price to HKD 93.0, highlighting the acquisition of 49% stake in SMIC North for CNY 40.6 billion, which is expected to enhance the company's EPS and net profit [1] - Acquisition details: The company plans to acquire the 49% stake in SMIC North through the issuance of A-shares at CNY 74.2 per share, totaling approximately 547 million shares. Post-transaction, SMIC North will become a wholly-owned subsidiary [2] - Financial impact: The projected net profit for SMIC North in 2024 is approximately CNY 1.68 billion, with total equity at CNY 40.8 billion. The diluted EPS for SMIC is expected to increase to CNY 0.55 for the period of January to August 2025, compared to CNY 0.49 before the transaction [2] Group 2 - Capital increase for SMIC South: SMIC plans to inject approximately USD 7.78 billion into SMIC South, with about USD 3.58 billion allocated to registered capital and USD 4.20 billion to capital reserves. This will raise SMIC South's registered capital from USD 6.5 billion to USD 10.08 billion [3] - Ownership change: Following the capital increase, SMIC's ownership in SMIC South will rise from approximately 38.5% to 41.6%, indicating a 3 percentage point increase [3] - Strategic focus: The capital increase is expected to support advanced process technology development at SMIC South, which is anticipated to positively impact the advancement of China's advanced process technology [3]

Group 1 - The core viewpoint of the report is that China International Capital Corporation maintains a "buy" rating for SMIC (00981) and raises the target price to HKD 93.0, following the announcement of a plan to acquire 49% of Northern SMIC for CNY 40.6 billion, which will make it a wholly-owned subsidiary [1] - The acquisition is expected to enhance the company's EPS and net profit, with the diluted EPS forecasted to increase from CNY 0.49 to CNY 0.55 for the period of January to August 2025, and from CNY 0.46 to CNY 0.53 for 2024 [1] - The total equity attributable to shareholders is projected to rise from approximately CNY 1,482 billion before the transaction to about CNY 1,682 billion after [1] Group 2 - The report indicates that Northern SMIC primarily engages in 12-inch wafer foundry services, which are highly profitable, and the acquisition is expected to increase SMIC's net profit by over USD 120 million in 2026, positively impacting EPS and BVPS [2] - SMIC plans to invest approximately USD 77.8 billion into Southern SMIC, with about USD 36.6 billion coming from SMIC, increasing its ownership from approximately 38.5% to 41.6% [3] - The capital increase will raise Southern SMIC's registered capital from USD 6.5 billion to USD 10.08 billion, and the net profit for Southern SMIC is estimated to be around CNY 3.67 billion and CNY 3.93 billion for the fiscal years 2023 and 2024, respectively [3]

Core Viewpoint - Nomura has raised the target price for Huahong Semiconductor (01347.HK) by 116% from HKD 16.4 to HKD 35.4, while maintaining a neutral rating due to persistent fixed cost burdens despite improved pricing conditions [1] Group 1: Financial Performance - Huahong Semiconductor's first-quarter revenue aligned with its guidance, but the gross margin of 9.2% was below expectations, likely due to depreciation from new facilities [1] - Management forecasts a 3.5% quarter-on-quarter revenue increase for the second quarter, driven by sustained demand momentum [1] Group 2: Market Dynamics - Although Huahong Semiconductor anticipates pressure on 8-inch wafer foundry prices (which have not yet decreased), the 12-inch wafer foundry prices are expected to continue rising due to supply-demand imbalances [1] - Nomura views the rising prices of 12-inch wafers as a positive indicator for the overall pricing dynamics of mature node foundries in Asia [1]