In the third quarter, nearly full production! Zhao Haijun of SMIC: Supply will still be insufficient in the fourth quarter, and annual revenue is expected to exceed 9 billion USD
Zhao Haijun stated that in the fourth quarter, as the industry enters the off-season, customer inventory replenishment has slowed down. However, the iterative effect of the industry chain continues, and the off-season is not dull. The company's production line is still in a state of supply exceeding demand, with annual sales revenue expected to exceed USD 9 billion. SMIC's Q3 net profit surged by 43.1%, and capacity utilization rose to 95.8%, nearing full production status. Goldman Sachs is optimistic about SMIC's long-term growth and maintains a buy rating
SMIC is heading towards a record revenue year, with the chip giant expecting its annual revenue to exceed $9 billion for the first time, as its production lines are operating at full capacity to meet strong demand.
At the latest earnings briefing, SMIC's co-CEO Zhao Haijun revealed this optimistic revenue forecast. He stated that the fourth quarter, typically a slow season for the industry, has seen a slowdown in customer stockpiling, but the iterative effects in the supply chain continue, making the off-season not so off, with the company's production lines still in a state of supply shortage. It is estimated that the company's annual sales revenue will exceed $9 billion, marking a new milestone in revenue scale.
SMIC executives indicated that the current memory market is in short supply, with prices rising significantly. From the perspectives of the foundry and memory industries, the pace of capacity expansion in the coming year will only increase, not decrease.
Goldman Sachs: Maintains Buy Rating on SMIC
Goldman Sachs stated that SMIC's third-quarter revenue exceeded market expectations and also surpassed the management's quarterly forecast of 5%-7%; the gross margin was also higher than guidance (18%-20%) and expectations. SMIC's fourth-quarter revenue expectation is +0% to +2%, which is basically in line with market expectations.
With the growing demand from local customers and opportunities related to artificial intelligence, the long-term growth of the company is optimistic. The buy rating is maintained, with a target price of HKD 117 and RMB 211.
SMIC Q3 Net Profit Soars 43.1%, Capacity Utilization Rises to 95.8%, Close to Full Production
SMIC's latest financial report shows that third-quarter revenue was RMB 17.162 billion, a year-on-year increase of 9.9%, with a gross margin of 25.5%, which significantly increased by 4.8 percentage points quarter-on-quarter, and capacity utilization rose to 95.8%, close to full production.
Wallstreetcn summarizes its financial data as follows:
Q3 revenue of RMB 17.162 billion, a quarter-on-quarter increase of 6.9%, and a year-on-year increase of 9.9%; revenue for the first three quarters was RMB 49.51 billion, a year-on-year increase of 18.2%;
Q3 gross margin of 25.5%, a significant increase of 4.8 percentage points quarter-on-quarter; gross margin for the first three quarters was 23.2%, a year-on-year increase of 5.6 percentage points;
Q3 net profit attributable to shareholders of RMB 1.517 billion, a year-on-year increase of 43.1%; net profit attributable to shareholders for the first three quarters was RMB 3.818 billion, a year-on-year increase of 41.1%;
Capacity utilization rose to 95.8%, an increase of 3.3 percentage points quarter-on-quarter, indicating strong demand.
However, the guidance provided by SMIC's management for the fourth quarter indicates that revenue is expected to remain flat to grow by 2% quarter-on-quarter, with a gross margin of 18%-20%. This means that with capacity utilization already at 95.8%, the company expects a significant slowdown in revenue growth in the fourth quarter, while the median gross margin of 19% will see a decline of about 6 percentage points compared to the 25.5% in the third quarter
