CITIC Securities International: Raises target price of Semiconductor Manufacturing International Corporation (00981) to 62 Hong Kong dollars, expects average selling price to improve from next quarter.

Bank of China International has released a research report stating that Semiconductor Manufacturing International Corporation (00981) currently plays an important role in China's semiconductor supply, especially in the face of international policy uncertainty. In addition, the group is making smooth progress in new technology nodes and platform development. As a result, the bank has raised its H-share target price by 15%, from HK$54 to HK$62. Due to the group's increasingly prominent position in the field of advanced chip manufacturing in mainland China, the bank maintains its "outperform market" rating. The bank believes that the accelerated depreciation and amortization of Semiconductor Manufacturing International Corporation's wafer fab capacity will continue to impact the group's gross profit margin, but higher demand and improvements in product structure may mitigate this impact. The bank has lowered its earnings forecast for the group in 2025 mainly to reflect the continued impact of accelerated depreciation and amortization. The report indicates that Semiconductor Manufacturing International Corporation benefited from an increase in non-utilization rate (UTR) in the second quarter, with quarterly revenue and gross margin both exceeding expectations. At the same time, UTR is stronger than expected and the domestic industrial and automotive markets are recovering well. Looking ahead to the second half of this year, the bank expects a slight decline in the group's UTR, with the full year UTR stabilizing at around 82.2% in 2025. However, starting from the third quarter, the average selling price is expected to continue to improve.