[ET Net News Agency, 8 February 2021] Macquarie Research trimmed its target price for
SMIC (00981) to HK$18.25 from HK$20.5 and maintained its "underperform" rating.
Following the Huawei setback and the US restrictions requiring export licenses for
equipment, SMIC's priorities are shifting from advanced nodes (28nm and below, FinFET) to
mature nodes in both 8" and 12", said the research house.
While SMIC sounds comfortable on 8" capacity expansion, the 12" increase depends on
export licenses to be obtained, hence a focus on existing FinFET Gen 1 and 2 platforms.
Macquarie expects SMIC to report operating losses in 2021-23 (excluding government
subsidies, equity/investment income) as R&D on advanced nodes continues. It reduced its
2021-22 pretax profit forecasts by 22% and 52% on slower capacity expansion, lower gross
margin. (KL)