SMIC Q3 profit doubles as wafer shipments, margins rise

Overview

• China chip foundry's Q3 revenue rose 34% yr/yr to $3.19 bln

• Gross margin improved to 29.9% from 25.3% in prior qtr, driven by higher utilization and product mix

• Net profit for Q3 more than doubled yr/yr

Outlook

• SMIC expects Q4 revenue to increase 4% to 6% sequentially

• Company sees Q4 gross margin in the range of 26% to 28%

Result Drivers

• WAFER SHIPMENTS - Co said Q3 revenue growth was mainly due to an increase in wafer shipments, which rose 5.7% q/q

• UTILIZATION AND PRODUCT MIX - Gross margin improvement attributed to higher utilization rate and product mix change

• INVESTMENT-RELATED LOSSES – Other income swung to a $32.1 mln loss from a $275.9 mln gain, due to lower associate investment gains and equity-security fair-value changes

Company press release: Full Story

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 21 "strong buy" or "buy", 2 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the semiconductors peer group is "buy"

• Wall Street's median 12-month price target for Semiconductor Manufacturing International Corporation is HK$100.00, about 105.2% above its November 12 closing price of HK$48.74

• The stock recently traded at 28 times the next 12-month earnings vs. a P/E of 50 three months ago

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• Nov 12 - Chinese chip firms Hosin, Amicro rise in Hong Kong debuts

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)