0817 GMT - SMIC's 2024 revenue could rise 26% on strong demand for its 12-inch wafers, Bocom International analysts Dawei Wang and Carrie Tong say in a research note. While chip demand for consumer electronics continues to recover and support SMIC's business in 2H, the auto and manufacturing sectors are still relatively weak, they say. The analysts estimate SMIC's 2024 capital expenditure could still exceed revenue amid capacity expansion, with capex then projected to gradually return to the average 2020-2022 level. SMIC may hit a trough in terms of profitability in 2024 and could "enter the harvest season" after significant investment, they say. Bocom sees SMIC's 2024-2026 gross margin at 16.8%, 20.0% and 22.3%, respectively. Bocom initiates a buy rating on SMIC and sets its target price at HK$32.00. Shares last closed at HK$28.25. (sherry.qin@wsj.com)
(END) Dow Jones Newswires
November 07, 2024 03:17 ET (08:17 GMT)
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