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

[SMIC (0981 HK, BUY, TP HK$26) Target Price Change]: Pricing Power Courtesy of Export Restrictions

[SMIC (981 HK, BUY, TP HK$24) TP Change]: Margins Will Decline on No-Profit 8” Wafers Orders

[SMIC (981 HK, BUY, TP HK$24) Target Price Change]: Still Waiting for Downstream Inventory Digestion

China/Asia TMT

Shawn Yang

Equity Bottom-Up

Semiconductor Manufacturing International Corp (SMIC) / Equity Bottom-Up

Semiconductor Manufacturing International Corp (SMIC) (981 HK)

Semiconductor Manufacturing International Corp (SMIC)

<ul>
<li>SMIC reported C1Q23 top-line, GAAP EBIT and non-IFRS net profit 4.7%, 17% and 75% vs. our est., and 1.9%, (19.5%), and 25% vs. cons。 </li>
<li>We expect 1Q23 to be the bottom for SMIC, improving quarterly on the back (1) IC supply chain localization, and (2) domestic economic improvement. </li>
<li>Despite high-inventory levels at most clients, SMIC continues to receive wafer orders for new IC products. We maintain BUY rating and HK$ 24 TP.</li>
</ul>


SMIC reported C1Q23 top-line, GAAP EBIT and non-IFRS net profit 4.7%, 17% and 75% vs. our est., and 1.9%, (19.5%), and 25% vs. cons。 
We expect 1Q23 to be the bottom for SMIC, improving quarterly on the back (1) IC supply chain localization, and (2) domestic economic improvement. 
Despite high-inventory levels at most clients, SMIC continues to receive wafer orders for new IC products. We maintain BUY rating and HK$ 24 TP.


[SMIC (981 HK, BUY, TP HK$24) Earnings Review]: Localization Beginning to Bear Fruit