Shares of Semiconductor Manufacturing International Corp (SMIC), China's largest chipmaker, surged 5.76% on Wednesday, propelled by the company's strong fourth-quarter outlook and analysts' bullish projections for its 2024 revenue growth.
SMIC provided an upbeat forecast during its third-quarter earnings report, estimating its fourth-quarter gross margin to range between 18% and 20%, with revenue expected to be flat or rise up to 2% from the previous quarter. The company's third-quarter gross profit stood at $444.2 million, with a gross margin of 20.5% and revenue of $2.17 billion.
Analysts at Bocom International expressed optimism about SMIC's prospects, projecting a 26% revenue growth for the chipmaker in 2024. They cited robust demand for its 12-inch wafers, driven by the recovery in the consumer electronics sector, as a key factor supporting SMIC's business in the second half of the year. Despite relative weakness in the auto and manufacturing sectors, analysts anticipate SMIC to "enter the harvest season" after significant investments, with gross margins estimated to improve from 16.8% in 2024 to 22.3% by 2026.
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