[ET Net News Agency, 19 February 2020] Credit Suisse lifted its target price for SMIC
(00981) to HK$13 from HK$10.2 due to the growth premium for semi localisation but
downgraded its rating to "underperform" from "neutral" as it views the stock as overshotm
with margins capped by rising depreciation, 14nm start-up and opex.
The research house said SMIC's 4Q 2019 results were in line with sales up 2.8% QoQ and
GMs at 23.8%. The government grants and valuation gain lifted EPS to HK$0.12 versus Credit
Suisse's estimate of HK$0.07.
The 1Q 2020 sales guided at 0-2% QoQ growth in ongoing orders in mature 12"/8"
mobile/consumer, though GMs down to 21-23% on rising depreciation and 14nm costs. Opex was
also guided up 10% over the 4Q guide to US$294-300mn. Credit Suisse adjusted its 2020/21
EPS forecasts from HK$0.23/HK$0.28 to HK$0.24/HK$0.28. (KL)
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00981 SMIC
Nominal 
14.320 -0.200 (-1.377%) Research Report
19/02/2020 10:43
{I-bank focus}Credit Suisse lifts SMIC (00981) to HK$13
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