2025-11-14 05:14Summary of SMIC (0981.HK) 3Q25 Earnings Call Company Overview - Company: Semiconductor Manufacturing International Corporation (SMIC) - Ticker: 0981.HK - Quarter: 3Q25 Key Financial Highlights - Revenue: - 3Q25 revenue reached US$2.4 billion, representing a 10% YoY and 8% QoQ increase, exceeding management guidance of +5%~+7% QoQ and consensus estimates by 2% and 1% respectively [1][2] - Gross Margin (GM): - GM was 22.0%, significantly higher than management's guidance of 18%~20% and consensus expectations of 19.0% and 19.6% [1][2] - Operating Profit: - Operating profit stood at US$351 million, which is 62% and 101% higher than Goldman Sachs estimates and consensus respectively [2] - Net Profit: - Net profit was US$192 million, reflecting a 45% QoQ and 29% YoY increase, surpassing estimates by 9% and 6% [2] - Capacity: - Capacity increased to 1.02 million wpm (8-inch equivalent) from 991k wpm in 2Q25 [2] Operational Metrics - Utilization Rate (UT): - Improved to 95.8% in 3Q25 from 92.5% in 2Q25 [1][2] - Capital Expenditure (Capex): - Capex for 3Q25 was US$2.4 billion, up from US$1.9 billion in 2Q25 [1] 4Q25 Guidance - Revenue Guidance: - Expected to increase by 0%~+2% QoQ, aligning with Goldman Sachs estimates of +2% QoQ and consensus of +1% QoQ [1][6] - Gross Margin Guidance: - Projected GM of 18%~20%, slightly lower than Goldman Sachs estimate of 21.1% and consensus of 19.4% [1][6] Strategic Outlook - Long-term Growth Drivers: - Positive outlook driven by increasing demand from local fabless customers and opportunities related to AI [1] - Market Position: - SMIC is expected to benefit from new capacities and a better product mix, particularly with higher contributions from new 12-inch fabs [6] Investment Recommendation - Rating: - Maintain a Buy rating on SMIC with a 12-month price target of HK$117.00, indicating an upside of 54.8% from the current price of HK$75.60 [6] Additional Insights - Operating Expense Ratio: - The operating expense ratio was 7.2%, lower than estimates of 9.8% and 12.2%, contributing to the strong operating profit [2] - Earnings Per Share (EPS): - EPS for 3Q25 was $0.02, consistent with estimates and reflecting a 45% increase YoY [6] This summary encapsulates the key financial metrics, operational performance, guidance, and strategic outlook for SMIC as discussed in the earnings call for 3Q25.