[ET Net News Agency, 11 May 2020] Credit Suisse lifted its target price for SMIC
(00981) to HK$17 from HK$10.7 and upgraded its rating to "neutral" from "underperform".
SMIC proposed 33% new shares on the China Star board. The research house said the move
would dilute Hong Kong holders from 68% to 51% and government-backed stakeholders from 32%
to 24%.
It also noted that China listings and semiconductors command a sizeable premium. Credit
Suisse said the deal could lift SMIC's net cash to US$4.6bn, with a 55% median premium
realising US$5.6bn. The potential listing eases the research house's concerns of continued
dilutive equity and debt plus margin erosion from advanced technology. (KL)