20171115-交银国际证券-中芯国际-00981.HK-Outlook_soft__target_to_strengthen_long-term_competitiveness_challenging_5页_1mb
报告摘要
SMIC (981 HK) Summary
Core Content
SMIC is a leading global foundry and the most advanced semiconductor foundry in mainland China. It provides semiconductor technology services ranging from 0.35-micron to 28nm, with major facilities located in Beijing, Shanghai, and Shenzhen. The company was founded in 2000 and listed on the Hong Kong Exchange in 2004. The document provides an analysis of SMIC's financial performance, outlook, and valuation metrics, along with key industry trends and analyst ratings.
Financial Highlights (Y/E 31 Dec)
| Metric | 2015 | 2016 | 2017E | 2018E | 2019E |
|---|---|---|---|---|---|
| Revenue (US$ m) | 2,236 | 2,914 | 3,107 | 3,563 | 4,108 |
| YoY growth (%) | 14 | 30 | 7 | 15 | 15 |
| Net profit (US$ m) | 253 | 377 | 171 | 178 | 255 |
| EPS (US cents) | 5.91 | 7.75 | 3.48 | 3.80 | 5.44 |
| P/E (x) | 25.4 | 19.4 | 43.2 | 39.5 | 27.6 |
| P/B (x) | 1.6 | 1.8 | 1.7 | 1.6 | 1.5 |
| Dividend yield (%) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
3Q17 Performance
- Revenue and GPM were largely in line with previous guidance.
- Net profit exceeded expectations due to government interest subsidies and lower-than-expected OPEX.
- 4Q17 revenue growth is expected to be around 1-3% quarter-over-quarter, in line with the industry average (excluding TSMC).
- 4Q17 GPM is expected to be 20%, which is worse than market expectations and the lowest in five years.
- OPEX is expected to increase, potentially leading to operational losses in 4Q17.
- Net profit for 4Q17 is expected to be supported by the Beijing JV gains of US$48-50m.
Outlook and Strategy
- SMIC's strategy to narrow the technology gap (currently about 2.5 generations behind industry leaders) is considered the right approach but challenging.
- The company is still a major beneficiary of China's semiconductor industry growth.
- Competition is intensifying due to the expansion of foundry capacity in China, with UMC expanding 28nm capacity in Xiamen and TSMC ramping up its Nanjing 14nm fab next year.
- Other local and international foundries are also planning to expand capacity in China.
Valuation and Price Target
- Current share price is HK$11.70, with an upside of -17%.
- Target price is HK$9.70, up from previous estimates.
- The target price is based on a 1.3x 2018E P/B, up from 1.2x.
- Shares currently trade at 1.6x 2018E P/B, above the 3-year historical average of 1.2x.
- Analysts maintain a Neutral rating, as the stock's total return is expected to be in line with the industry over the next 12 months.
Stock Data
| Metric | Value (HK$) |
|---|---|
| 52-week high | 14.76 |
| 52-week low | 6.91 |
| Market cap | 59,386.97 |
| Issued shares (m) | 4,661.46 |
| Avg daily vol (m) | 91.81 |
| 1-month change (%) | 26.64 |
| YTD change (%) | 4.60 |
| 50-day MA | 10.11 |
| 200-day MA | 9.39 |
| 14-day RSI | 63.9 |
Key Financial Ratios
| Ratio | 2015 | 2016 | 2017E | 2018E | 2019E |
|---|---|---|---|---|---|
| P/E (x) | 25.4 | 19.4 | 43.2 | 39.5 | 27.6 |
| P/B (x) | 1.6 | 1.8 | 1.7 | 1.6 | 1.5 |
| P/S (x) | 0.3 | 2.5 | 2.4 | 2.0 | 1.7 |
| EV/EBITDA (x) | 1.8 | 59.7 | 63.4 | 54.2 | 44.0 |
| Net debt/equity | -0.1 | 0.2 | 0.3 | 0.5 | 0.5 |
| ROE (%) | 7.2 | 9.6 | 4.0 | 4.0 | 5.5 |
| ROA (%) | 3.4 | 3.7 | 1.1 | 1.2 | 1.8 |
| ROIC (%) | 5.3 | 5.5 | 1.6 | 1.7 | 2.6 |
Analysts and Research Team
- Head of Research: Hao HONG, CFA (852) 3766 1802
- Deputy Head of Research: Geoffrey CHENG, CFA (852) 3766 1809
- Research Team includes: Yuan MA, PhD; Karen TAN; Grace HUA, CFA; Mengqi SUN; Zhe ZHOU; Shan Ying; Li WAN, CFA, FRM; Hannah HAN; Jennifer ZHANG; Alfred LAU, CFA, FRM; Summer WANG, CFA; Wallace CHENG; etc.
Analyst Certification
- All views expressed reflect personal opinions.
- No compensation is directly related to the recommendations.
- No insider information is used in the report.
- No trading in the stock within 30 days prior to the report.
Business Relationships
- BOCOM International has investment banking relationships with multiple companies, including Orient Securities, Everbright Securities, and Guolian Securities.
- BOCOM International Global Investment Limited holds more than 1% of equity in several listed companies.
Disclaimer
- The report is strictly confidential and for private circulation only.
- No part of the report may be copied, stored, or redistributed without prior written consent.
- The report does not constitute investment advice and is not tailored to any specific investor.
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