The Zhitong Finance App learned that chip stocks have declined collectively. As of press release, Huahong Semiconductor (01347) fell 3.96% to HK$16.5; CLP Huada Technology (00085) fell 4.91% to HK$1.55; Shanghai Fudan (01385) fell 4.02% to HK$12.9; and SMIC (00981) was 1.54% to HK$16.66.
According to news, in 2023, the performance of SMIC and Huahong both declined. SPDB International believes that in the first half of this year, Huahong's gross margin may have bottomed out faster than SMIC. This is mainly because the increase in SMIC's revenue comes more from express order demand driven by the upgrading of consumer application products such as smartphones, and its revenue growth rate may show a “double-U” pattern of double-decoupling. At the same time, Huahong's valuation is at a certain discount compared to SMIC. SPDB International expects SMIC to also have considerable upside after its fundamental profit completes the second “U” pattern.
China Merchants Securities said in a research report that SMIC's performance in the second U of Double-U is expected to be average. Along with the semiconductor industry chain, it will break out of the slump and achieve steady and moderate growth under the combined effects of a gradual improvement in customer inventories and a continued recovery in demand for mobile phones and the Internet. However, looking at the market as a whole, the strength of the recovery in demand is not enough to support a strong overall rebound in semiconductors.