On May 22, SMIC (00981.HK) rose 3.91% in regular trading, trading at HK$77.05 per share with turnover of approximately HK$402 million, extending gains from its strong rebound earlier in the week.

The continued rally follows a wave of analyst upgrades. Citi upgraded SMIC to Buy with a target price of HK$90, citing better-than-expected Q1 results, domestic substitution trends, and stronger industrial and automotive demand. Goldman Sachs maintained its Buy rating with a target of HK$135, highlighting five growth drivers including AI-related analog/logic chip demand and capacity expansion. Morgan Stanley raised its target to HK$85, projecting mature-node capacity shortages by late next year as AI power IC demand accelerates.

Fundamentally, SMIC guided Q2 revenue growth of 14%-16% quarter-over-quarter with gross margins of 20%-22%, well above market expectations. Management noted AI-driven demand has pushed power management chip capacity to full utilization, while localization trends and preemptive customer stockpiling further support order visibility. The company confirmed selective price increases are being progressively implemented across BCD, analog, and storage-related platforms.

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