Goldman Sachs released a research report stating that with another round of national subsidies distributed in October, demand for consumer electronics and smartphones in China remained stable in the second half of the year, with no significant decline observed. Although consumer electronics and smartphones contribute 66% of revenue, the firm maintains an optimistic outlook on SMIC's (00981) medium to long-term order expansion, benefiting from downstream customers' market share growth and semiconductor content upgrades in electronic devices, particularly the accelerated deployment of artificial intelligence features.

The firm maintains its "buy" rating on SMIC and raised its valuation basis, increasing the projected 2028 P/E ratio from 45.2x to 51.1x, with the H-share target price raised from the previous HK$83.5 to HK$95.

Goldman Sachs kept its earnings forecasts for SMIC largely unchanged for 2025 to 2027, while raising earnings per share forecasts for 2028 and 2029 by 1% each, benefiting from upward revisions to revenue and gross margin projections. The firm also raised its revenue forecasts for SMIC by 0.1% each for 2028 and 2029, based on a more optimistic outlook for demand from AI consumer electronics.

Additionally, Goldman Sachs increased its gross margin forecasts for SMIC by 0.1 percentage points each for 2028 and 2029, as higher capacity utilization rates are expected to deliver better profit margins. With operating expense forecasts remaining largely unchanged, the firm raised its operating profit forecasts for SMIC by 1% each for 2028 and 2029.