Nomura cut SMIC's 2024 and 2025 gross margin forecast from more than 20% to 10%-15%.
The Zhitong Finance App learned that Nomura released a research report stating that it raised the target price of SMIC (00981) by 1.7% from HK$18.1 to HK$18.4 to maintain a “neutral” rating.
According to the report, the decline in the company's gross margin exceeds the increase in customer orders. Sales for the first quarter of 2024 increased 4.3% quarterly, exceeding expectations of “flat to 2% quarter-on-quarter”. The gross profit margin for the first quarter was 13.7%, exceeding expectations of 9%-11%.
Meanwhile, Nomura cut its gross margin forecast for 2024 and 2025 from 20% or more to 10%-15%, mainly because the gross margin guideline for the second quarter was 9%-11%, and the low market forecast was about 15%.