CICC International: Raised SMIC's target price to HK$62, expecting average selling price to improve from the next quarter.

CICC released a research report stating that SMIC currently plays an important role in China's semiconductor supply, especially in the context of international policy uncertainty. In addition, the group has made smooth progress in new technology nodes and platform development. Therefore, the bank has raised its H-share target price by 15%, from HK$54 to HK$62. Due to the increasingly prominent position of the group in the field of advanced chip manufacturing in mainland China, the bank maintains a "outperform the market" rating. The bank believes that the accelerated depreciation and amortization of the production capacity of SMIC's wafer fab will continue to affect 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 depreciation and amortization.