[ET Net News Agency, 18 October 2018] Credit Suisse lowered its target price for
Semiconductor Manufacturing International (SMIC)(00981) to HK$7.8 from HK$11, and
maintained its "neutral" rating.
The research house expects SMIC's 3Q sales to meet guidance for flat to +2% QoQ on
near-full utilisation in 8" fabs and 65nm, partially offset by 40nm and 28nm softness. On
in-line sales, gross margins should also be in line with guidance for 19-21%.
Credit Suisse believes foundry business should decline low-mid-single digits in 4Q due
to lack of Apple exposure, muted China smartphone demand and cautious supply chain
inventory control. GMs in 4Q18 should decline modestly.
It trimmed its 2018/19 EPS forecasts from HK$0.16/HK$0.16 to HK$0.14/HK$0.08 to reflect
slower near-term business outlook. (KL)