The Zhitong Finance App learned that BOC International released a research report saying that SMIC (00981)'s performance for the second quarter greatly exceeded expectations, and the average sales price increased significantly. Revenue of US$3.01 billion increased 20% quarterly, far exceeding the guideline ceiling by 16% quarterly. The gross profit margin was 25.3%, up 5.2 percentage points from quarter to quarter, and far exceeded the guideline limit of 22%. Management indicated that third-quarter revenue continued to increase by 2-4% on a quarterly basis, leading to an increase in gross margin between 26% and 28%. The bank raised the SMIC target price to HK$108. Considering that the increase in the company's average selling price is beginning to be further reflected, the 2026/2027/2028 revenue forecast was raised to US$118.8/149.4/17.2 billion. Rating “Buy”.
According to the bank, the driving effect brought about by artificial intelligence was further evident, and the price increase effect began to be shown in the next quarter and may continue to be extended until the second half of the year. This may be the main reason why the company's gross margin continues to rise from quarter to quarter. Management pointed out that shipments of computers/tablets and industrial/automobiles related to artificial intelligence increased 40% year over year. The bank believes that since the beginning of the year, SMIC's stock price performance has clearly outperformed comparable foundry companies, and that direct or indirect demand driven by artificial intelligence has been fully transmitted to the company's various businesses, and has clearly benefited the company's revenue and gross margin.