[ET Net News Agency, 22 August 2019] Goldman Sachs raised its target price for SMIC
(00981) to HK$11.5 from HK$8.7 and upgraded its rating to "buy" from "neutral".
The research house conducted an in-depth analysis of SMIC's technology development and
foundry industry demand/supply dynamics. Goldman believes SMIC's accelerating technology
migration and growing demand from domestic customers will drive strong earnings recovery
in 2020-21.
While SMIC still lags global peers in 5/7nm, Goldman sees an opportunity in the domestic
market to gain share as competition in advanced nodes decreases and SMIC's 12/14nm FinFET
nodes catch up with domestic customers' product upgrade trend. It raised its 2020/21 EPS
forecasts by 16%/20% to factor in 12/14nm FinFET ramping up, larger TAM and improving
utilization rate. (KL)