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<Research>UBS Keeps Neutral on SMIC; Pricing Environment Favorable, But Depreciation Pressure Piles Up
Recommend 11 Positive 16 Negative 10 |
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On the support of mild growth in both wafer shipments and the average selling price of mixed products, SMIC (00981.HK)'s 4Q25 net profit grew by 4.5% QoQ, which was better than the usual seasonal performance, the previous guidance of a 0-2% QoQ increase, and the market forecast of a 1.3% QoQ increase, according to a UBS research report. With ongoing business expansion, SMIC's management forecasts a 30% YoY surge in depreciation expenses this year, which will not only remain high next year but also heap more pressure on gross margins. UBS currently forecasts gross margin to reach 20% in 1Q26 and 21.2% in the entire year of 2026, with depreciation pressure being offset by a more favorable pricing environment. UBS has set its target price for SMIC at HKD76 and kept the Neutral rating unchanged. AAStocks Financial News |
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