[ET Net News Agency, 8 February 2021] Citi Research cut its target price for SMIC
(00981) to HK$14.6 from HK$20.3 and maintained its "sell" rating.
The research house said SMIC's 4Q 2020 revenue declined by 9% QoQ on a lower mix from
advanced nodes and decreasing contribution from other revenue. GPM declined to 18% from
24.2% in 3Q on lower utilization and under-loaded FinFET capacity. The wafer manufacturing
business, especially for the 14/28nm nodes, declined sharply in 4Q.
With headwinds from US government restrictions, SMIC's 2021 revenue and margin outlooks
suggest it is far from operating-level breakeven, Citi noted. (KL)