Lyon: Semiconductor Manufacturing International Corporation (00981) third quarter guidance falls short of expectations, maintains "outperform the market" rating.

Lyon released a research report stating that Semiconductor Manufacturing International Corporation (00981) saw a 1.7% decrease in second-quarter revenue to $2.21 billion, better than the company's guidance of a 4-6% decrease. The gross margin was 20.4%, higher than the guidance range of 18-20%, and net profit was $132.5 million, 24% lower than market expectations. The company guided for third-quarter revenue to increase by 5-7% quarter-on-quarter, with a median increase of 6%, reaching $2.34 billion, 1% lower than market expectations. The gross margin is expected to be 18-20%, with a median of 19%, which is 2.1 percentage points lower than expected. The firm maintains a rating of outperform for SMIC and a target price of HK$59.2.