CICC: SMIC 1Q Results and 2Q Guidance In Line; Deeply Benefiting from Localized Production Demand

CICC published a report stating that SMIC (00981.HK) +0.400 (+0.582%) Short selling $519.41M; Ratio 12.319% 's first-quarter results and second-quarter guidance were in line with its expectations. Revenue was USD2.505 billion, up 11% YoY and up 0.7% QoQ (guidance was flat QoQ). Gross margin was 20.1%, up 0.9 ppts QoQ, within the guided range of 18-20%. For the second quarter, the company guided revenue to grow 14-16% QoQ, with gross margin between 20% and 22%. The broker maintained an Outperform rating and a TP of HKD100.The report noted that by the end of the first quarter, SMIC's capacity reached 1.08 million wafers per month (8-inch equivalent), with a utilization rate of 93.1%, slightly down QoQ, mainly due to consumer electronics and seasonal factors. Capital expenditure in the first quarter was USD1.56 billion. Depreciation and amortization in the first quarter reached USD1.088 billion, up 25.7% YoY, but gross margin did not decline significantly, reflecting the current industry upcycle and the offsetting effect brought by the company's relatively high utilization rate. The broker expects 2026 to be a key year for the company, featuring accelerated revenue realization alongside ongoing depreciation pressure.SMIC guided second-quarter revenue to grow 14-16% QoQ, which the broker believes is driven by a resonance of higher utilization rates and rising ASP. In the first quarter, within the revenue mix, consumer electronics smartphones and consumer electronics declined to 18.9% and 46.2%, respectively, while computers and tablets, and industrial and automotive rose to 13.6% and 14%. The broker believes the company is deeply benefiting from "localized production demand" driven by AI supply constraints, as well as the reshaped supply-demand dynamics of mature-node processes by AI peripheral devices. Its customer mix is also shifting toward non-"traditional consumer electronics" segments. (ha/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-19 12:25.)