SMIC Q2 Revenue Surges 36% YoY, Goldman Sachs Sets HK$135 Target

SMIC reported $3B Q2 revenue, beating estimates with 25.3% gross margin. Goldman Sachs raises HK share target to HK$135, citing AI and local demand drivers.

Woofun AI reports that SMIC's second-quarter revenue reached $3 billion, marking a 36% year-on-year and 20% quarter-on-quarter increase. This performance exceeded management's forecast of 14% to 16% growth, while the 25.3% gross margin surpassed both the bank's and market's estimates of 21% and 21.4%, respectively. Goldman Sachs attributes the revenue rise to higher wafer shipments and average selling prices, with margin improvements driven by a better product mix.

The bank projects third-quarter revenue growth of 2% to 4%, aligning with consensus, but forecasts a gross margin of 26% to 28%, which exceeds market expectations. Maintaining a "buy" rating, Goldman Sachs highlights long-term growth potential from local semiconductor customers lacking manufacturing capabilities and artificial intelligence opportunities. The target price for SMIC's Hong Kong shares is set at HK$135.