Jinwu Financial News | According to Guoxin Securities Research, SMIC (00981) released unaudited results: 1Q24 achieved revenue of US$1.75 billion (YoY +19.7%, QoQ +4.3%), better than the guideline (US$16.78-1.112 billion), and its revenue in a single quarter surpassed UMC and GF; gross margin was 13.7% (YOY-7.1pct, QoQ-2.7pct), which was significantly better than the guideline (9%-11%), mainly due to an increase in the willingness of global customers to prepare goods. The company anticipates that demand for early delivery from some customers will continue. It is expected that 2Q24 revenue will increase 5%-7% month-on-month, and depreciation will increase quarterly due to increased production capacity. The gross margin is expected to be 9-11%; the company's target sales revenue growth in 2024 can exceed the average of comparable peers.
The bank said that based on the company's 1Q24 performance exceeding previous expectations and the recovery in downstream customer stocking demand is optimistic, the bank raised 2024-2025 revenue to US$75.18/9.160 billion US dollars (previous value of US$6.828/8.893 billion US dollars). Combined with the aforementioned depreciation or significant increase, as well as competition or continuation of mature global processes, the net profit was lowered to US$442/633 million (previous value of US$4.78/766 million US dollars), corresponding to the current stock price 0.8 times PB in 2024. Optimistic about the medium- to long-term development prospects of leading domestic foundry companies, maintaining a “buy” rating.