Goldman Sachs: SMIC Q2 Earnings Beat Expectations, Sets HKD 135 Target Price

Huo Xing Finance reports that on August 14, Goldman Sachs released a report stating that SMIC's second-quarter revenue reached $3 billion, up 36% year-over-year and 20% quarter-over-quarter, exceeding both the bank’s and market expectations, as well as management’s guidance of a 14% to 16% sequential growth. Gross margin for the period was 25.3%, surpassing Goldman Sachs’ and market expectations of 21% and 21.4%, respectively, and also exceeding management’s guidance range of 20% to 22%. Goldman Sachs noted that the sequential revenue growth was primarily driven by increased wafer shipments and higher average selling prices, while management attributed the improved gross margin to an enhanced product mix and higher average selling prices. For the third quarter, management guided for sequential revenue growth of 2% to 4%, in line with Goldman Sachs’ and market expectations; the gross margin guidance of 26% to 28% exceeded both the bank’s and market forecasts. Goldman Sachs maintains a “Buy” rating on SMIC, expressing a positive long-term growth outlook, driven by increasing demand from domestic fabless semiconductor customers and artificial intelligence-related opportunities. The bank has set a target price of HK$135 for SMIC’s Hong Kong-listed shares. (Jin Shi)