Goldman Sachs: SMIC Q2 Earnings Beat Expectations, Sets HK Stock Target Price at 135 HKD

According to TechFlow, on August 14, Goldman Sachs issued a report stating that SMIC's second-quarter revenue was US$3 billion, up 36% year-on-year and 20% quarter-on-quarter, higher than the bank's and market expectations, and also surpassed management's guidance of 14% to 16% quarter-on-quarter growth. Gross margin during the period was 25.3%, higher than the bank's and market expectations of 21% and 21.4%, and also higher than management's guidance range of 20% to 22%.

Goldman Sachs stated that revenue quarter-on-quarter growth was mainly driven by increased wafer shipments and average selling prices, and management attributed the gross margin improvement to improved product mix and increased average selling prices. As for the third-quarter guidance, revenue quarter-on-quarter growth of 2% to 4% is in line with the bank's and market expectations; gross margin guidance of 26% to 28% surpasses the bank's and market expectations. The bank maintained its buy rating on SMIC, is positive on the company's long-term growth prospects, believing growth is driven by increased demand from local fabless semiconductor customers and AI-related opportunities. Goldman Sachs set a target price of HK$135 for the Hong Kong stock.