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<Research>G Sachs Lifts SMIC (00981.HK) TP to $33.4 as Rev./ Margin to Continue to Recover
Recommend 9 Positive 25 Negative 7 |
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Goldman Sachs was optimistic about SMIC (00981.HK)'s revenue outlook, driven by healthier inventory level and localization trend, according to Goldman Sachs' research report. Goldman Sachs remained bullish on SMIC as the foundry leader in China due to its customers' growing demand for localized production. However, continuous capacity expansion, increasing supply of mature nodes output, intensifying competition and geopolitical risks remain valuation concerns and uncertainties. End demand in the industrial and auto segments is expected to weaken in 2H24 amid fierce competition, but the broker thought it should recover gradually as inventory digestion completes. While Goldman Sachs was optimistic about SMIC's sales growth, ASP growth is likely to remain modest due to increasing supply of mature nodes output in China. Overall, the broker estimated SMIC's gross profit margin to recover gradually, and lifted its target price on SMIC's H-shares from $29.2 to $33.4, with rating kept at Neutral. AAStocks Financial News |
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