Semiconductor Manufacturing International Corp
00981: XHKG (HKG)
| Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
|---|---|---|---|
| HKD 59.30 | Brtjf | Vkddq |
SMIC Earnings: Worst Is Over, but There Is No Cause for Celebration
/s3.amazonaws.com/arc-authors/morningstar/51408a44-34a8-4b9e-9370-8acd8e7699af.jpg)
We lift our fair value estimate for Semiconductor Manufacturing International Corporation by 4% to HKD 15.60 per share after adjusting nonoperating items that resulted in higher 2023 and 2024 EPS (up 170% and 65%, respectively). Our revenue and gross margin assumptions are unchanged and the stock remains overvalued as we believe the market underestimates the capital expenditure required to capture incremental electric vehicle, industrial, and consumer electronics demand. Upside risks to our fair value estimate are unexpectedly strong government stimulus and the company’s possible share offer priced based on its A-share.