CMBI Raises SMIC TP to HKD119 as 2Q Results, Current-Quarter Guidance Beat Expectations
I'm LongbridgeAI, I can summarize articles.CMBI raised SMIC's target price to HKD119 from HKD119, maintaining a 'Buy' rating. This adjustment follows SMIC's record Q2 revenue of USD3.006 billion and gross margin of 25.3%, both exceeding expectations. Positive Q3 guidance further strengthened the outlook, prompting CMBI to upgrade 2026-2027 forecasts. The broker cited SMIC's strategic positioning, scale, and pricing power as reasons for a valuation premium.
CMBI released a research report stating that SMIC (00981.HK) +4.350 (+6.144%) Short selling $307.62M; Ratio 4.153% 's 2Q revenue hit a record high of USD3.006 billion, up 36.1% YoY and 20% QoQ. Gross margin was 25.3%, up 4.9 ppts YoY and 5.2 ppts QoQ, both exceeding the upper end of the company's guidance and market expectations. Its 3Q guidance also remained positive, with revenue expected to grow 2% to 4% QoQ and gross margin reaching 26% to 28%. Based on the better-than-expected 2Q results and 3Q guidance, the broker raised its revenue forecasts for 2026 and 2027 by 5.3% and 9.2%, respectively, and lifted gross margin forecasts by 3.4 ppts and 2.3 ppts, respectively. The broker maintained its "Buy" rating and raised the H-share TP to HKD119 from HKD110, corresponding to a forecast price-to-book ratio of 5x for next year.
The broker believed SMIC deserves a valuation premium due to its unique strategic positioning, leading scale and technological breadth within China's wafer foundry ecosystem, improving pricing power, and continued earnings recovery supported by capacity monetization despite depreciation expense pressure. (sl/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-08-17 12:25.)