Stock Track | SMIC Plummets 5.09% Intraday on Acquisition Dilution and Weak Target Performance Concerns

Stock Track05-13

SMIC's stock experienced a sharp intraday decline of 5.09% during Wednesday's trading session.

The drop follows market reaction to the approval of the company's landmark acquisition of SMIC North. While the deal, valued at approximately 40.6 billion yuan, marks a significant expansion for SMIC, investors have raised concerns over the financial health of the target and the method of financing. Newly disclosed figures show SMIC North's 2025 full-year revenue grew a mere 0.76% year-over-year, with its performance in the first quarter of 2026 coming under pressure.

Furthermore, the acquisition is to be completed through the issuance of new shares, introducing immediate dilution concerns for existing shareholders. Analysts note that despite the potential for the deal to add over $120 million to SMIC's net profit in 2026, the market's focus has shifted to the near-term earnings headwinds and the dilutive impact of the share issuance, leading to the significant sell-off.

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