Goldman Sachs: SMIC's operating profit in the fourth quarter exceeds expectations

Goldman Sachs published a report stating that SMIC (00981.HK) is expected to exceed operational profit expectations in the fourth quarter of 2025, with revenue guidance for the first quarter of this year meeting expectations. The firm anticipates that the company will benefit from increased domestic customer demand, continued capacity expansion, and product portfolio optimization, with the growth rate of high-margin product demand surpassing that of traditional products. The company is set to add 49,000 wafers per week of capacity (measured in 12-inch wafers) in 2025, while maintaining strong wafer yield, reflecting demand growth driven by the AI boom, supply chain industry restructuring opportunities, and the trend of "localized production."

Based on the optimistic growth outlook, Goldman Sachs expects SMIC to continue expanding capacity and advancing the transfer of advanced process technologies. The target price is HKD 134. Rating: "Buy."