CLSA released a research report stating that SMIC's (00981) Q4 guidance largely aligns with market expectations. Despite being a traditionally slow season, the firm believes demand will remain robust in Q4, with current capacity utilization and wafer production exceeding guidance.

The report forecasts SMIC's 2025 capital expenditures to be flat or slightly higher year-on-year. CLSA raised its 2025–2027 profit forecasts by 5%–22%, reflecting improved gross margin expectations, and lifted its H-share target price from HK$58.8 to HK$93.3, maintaining an "Outperform" rating.

SMIC's Q3 results surpassed expectations, with revenue growing 7.8% quarter-on-quarter to $2.38 billion, exceeding the 5%–7% guidance range. Gross margin improved by 1.6 percentage points QoQ to 22%, also beating the 18%–20% guidance. This was driven by higher capacity utilization (95.8%), reduced production volatility, and product mix optimization, which helped offset increased depreciation costs.

Net profit rose 29% year-on-year to $192 million in Q3, beating market estimates by 6%.