China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

[Blue Lotus Entertainment Sector Update]: What Change Can Mate 60 Bring to Games and Apps

[Blue Lotus Internet Sector Update]: Increasing Marginalization of Middle-Sized Companies

[Tencent(700 HK,BUY,TP HK$425)Target Price Change]: International Game and Advertising Drove Results

[Xiaomi(1810 HK, SELL, TP HK$8.2)  Update]: Huawei’s Impact on Xiaomi Will Be Meaningful in 2024

Gravity Works As WeWork Doesn't; Now Plan B

Bifurcated Chinese Express Market Developing

China/Asia TMT

Shawn Yang

Thematic (Sector/Industry)

<ul>
<li>We estimate that SMICs 7nm yield is &gt;70% with capacity of 19k 7nm wafers per month.  We expect SMIC will be able to ship 5nm by 2026 .</li>
<li>We expect Huawei’s wafer demand to reach 18k~ 7nm per month, which would have revenue gain of US$ 550mn~ per quarter to SMIC. We raise SMIC TP to HK$ 27.</li>
<li>We expect Huawei to reach 18% share of the China smartphone market in 2024. We expect Apple and Xiaomi’s China market share to decline by 2ppt and 0.8ppt YoY, respectively.</li>
</ul>


We estimate that SMICs 7nm yield is &gt;70% with capacity of 19k 7nm wafers per month.  We expect SMIC will be able to ship 5nm by 2026 .
We expect Huawei’s wafer demand to reach 18k~ 7nm per month, which would have revenue gain of US$ 550mn~ per quarter to SMIC. We raise SMIC TP to HK$ 27.
We expect Huawei to reach 18% share of the China smartphone market in 2024. We expect Apple and Xiaomi’s China market share to decline by 2ppt and 0.8ppt YoY, respectively.


Semiconductor Manufacturing International Corp (SMIC) (981 HK)

Semiconductor Manufacturing International Corp (SMIC)

[Blue Lotus Hardware Sector Update]: SMIC 7nm and 5nm Sufficient for Huawei Rejuvenation