Semiconductor Manufacturing International Corp
00981: XHKG (HKG)
| Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
|---|---|---|---|
| HKD 77.90 | Qfc | Lpx |
SMIC Earnings: Second Quarter Guidance Outshined Peers but Full-Year Outlook Still Uncertain
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We keep our fair value estimate on no-moat Semiconductor Manufacturing International Corporation, or SMIC, at HKD 15 after the company reported unsurprising March quarter results and affirmed its full-year guidance. The stock is overvalued, in our view, due to expectations that the firm can offer new shares based on its higher A-share price, 10% lower 2024 and 2025 revenue forecasts than PitchBook consensus, and overlooking the heavy capital spending required to meet incremental demand in electric vehicles and industrial applications.