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<Research>CLSA Keeps Rating at Outperform for SMIC (00981.HK), Elevates TP to $93.3
Recommend 14 Positive 26 Negative 11 |
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SMIC (00981.HK)'s 3Q25 results beat expectations, with revenue growing 7.8% QoQ to US$2.38 billion, surpassing the guidance range of 5-7% incline, CLSA published a research report saying. Gross margin increased by 1.6 ppts QoQ to 22%, also higher than the guidance of 18-20%. This improvement is believed to be driven by an increase in capacity utilization to 95.8%, reduced production volatility and product mix adjustments, which helped offset the impact of higher depreciation during the period. SMIC's 4Q25 guidance was broadly in line with market consensus. Although it is traditionally a low season, demand is expected to remain strong in 4Q25. Current capacity utilization and wafer production are better than the 4Q25 guidance. It is forecasted that capital expenditure for 2025 will remain flat or slightly increase YoY. The broker raised its 2025-2027 earnings forecasts by 5-22% to reflect the higher gross margin expectations. Therefore, CLSA elevated its target price for SMIC's H-shares from $58.8 to $93.3, with rating kept at Outperform. AASTOCKS Financial News Website: www.aastocks.com |
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