SMIC(688981) 华泰证券·2024-08-12 03:28Investment Rating - The report maintains a "Buy" rating for both H-shares (688981 CH) and HK shares (981 HK) with target prices set at HKD 24.00 and RMB 65.59 respectively [7]. Core Insights - The company has exceeded market expectations for Q2 2024, driven by strong demand in consumer electronics and local production trends. Revenue for Q2 2024 increased by 8.6% quarter-on-quarter, with a gross margin of 13.9% [2][16]. - For Q3 2024, the company expects revenue to grow by 13%-15% quarter-on-quarter, with gross margins projected to rise to 18%-20%, significantly outperforming peers [2][13]. - The report highlights a robust recovery in demand for mid-to-low-end consumer electronics, alongside geopolitical factors that have spurred local production needs [3][16]. Revenue and Profitability Forecast - The revenue forecast for 2024 has been adjusted upwards by 8.3%, with expected revenue of RMB 55.60 billion, reflecting a year-on-year growth of 24% in USD terms [5][18]. - The net profit estimates for 2024, 2025, and 2026 have been raised by 31.1%, 8.2%, and 17.0% respectively, with projected figures of USD 7.62 billion, USD 7.90 billion, and USD 8.63 billion [5][18]. - The company anticipates a significant increase in ASP (Average Selling Price) due to improved product mix and new capacity releases [4][13]. Capacity and Utilization - As of Q2 2024, the total capacity reached 837 thousand wafers per month, with a capacity utilization rate of 85.2%, up 4.4 percentage points from the previous quarter [4][16]. - The company expects to add approximately 60,000 12-inch wafers by the end of the year, exceeding previous estimates [4][18]. Market Position and Competitive Landscape - The company is positioned to outperform industry averages, with its revenue growth guidance for Q3 2024 being the highest among major competitors [2][13]. - The report notes that geopolitical factors have created new opportunities for the company within the supply chain, enhancing its competitive edge [3][16].