SMIC(688981) 浦银国际·2025-05-12 13:08Investment Rating - The report maintains a "Buy" rating for the company, with a target price adjustment to HKD 49.7 for the Hong Kong stock and RMB 99.4 for the A-share, indicating potential upside of 15.6% and 15.8% respectively [1][4][6]. Core Insights - The company is experiencing full capacity utilization, with a rebound in automotive demand. Despite a temporary impact on revenue and gross margin due to one-time maintenance in Q1, this effect is expected to dissipate by the second half of Q3. The company is well-positioned to benefit from growth opportunities in automotive products such as BCD, CIS, and MCU [6][8]. - The company reported Q1 revenue of USD 2.25 billion, a 28% year-on-year increase, and a net profit of USD 188 million, reflecting a 162% increase compared to the same period last year [8][9]. Financial Projections - Revenue is projected to grow from USD 6.32 billion in 2023 to USD 11.77 billion in 2027, with a compound annual growth rate (CAGR) of approximately 17% [2][7]. - Gross margin is expected to improve from 19.3% in 2023 to 25.6% in 2027, indicating a positive trend in profitability [2][10]. - Net profit is forecasted to increase from USD 903 million in 2023 to USD 1.50 billion in 2027, with significant growth rates in the coming years [2][10]. Performance Metrics - The company’s Q1 2025 performance showed a gross margin of 22.5%, up from 13.7% in Q1 2024, and a net profit margin of 8.4% [8][9]. - The report indicates that the company’s EV/EBITDA for 2025 is projected at 14.1x, suggesting room for valuation upside [6][11]. Market Context - The semiconductor industry is witnessing a rebound in demand, particularly in the automotive sector, which is expected to drive growth for the company [6][8]. - The company is considered one of the key beneficiaries in the localized demand upcycle for semiconductor foundries in China [6][10].