CICC International: Raises target price of Semiconductor Manufacturing International Corporation (00981) to HKD 87, maintains "outperform" rating.

Guotai Junan International released a research report stating that the target price of Semiconductor Manufacturing International Corporation's H shares (00981) has been raised from HK$62 to HK$87, maintaining an "outperform" investment rating; while the target price of Semiconductor Manufacturing International Corporation's A shares is RMB 90, up 40% to RMB 126, with an investment rating of "neutral". Guotai Junan International stated that the accelerated depreciation and amortization of the new wafer fab capacity of Semiconductor Manufacturing International Corporation will continue to affect the gross margin, but higher unit selling prices and optimization of product mix may mitigate this impact. The bank has raised profit forecasts for 2025/2026/2027 by 19%/4%/9%, primarily due to higher-than-expected gross margin and lower operating expenses. The bank's book value per share forecast has been raised by 0.5%/0.6%/0.9%. The bank pointed out that Semiconductor Manufacturing International Corporation currently plays a crucial role in the Chinese semiconductor supply chain, especially in the face of uncertain international policies. In addition, the company has made steady progress in new technology nodes and platform development. Its increasing competitiveness and capabilities in specialist technology fields further cement its position as a major beneficiary of supply chain reform. Therefore, the bank has raised the target market-to-book ratio of H shares from 3.0 times to 4.0 times.