SMIC's Oversupply Risk Lingers, Jefferies Says -- Market Talk

Dow Jones11-11

0354 GMT - Semiconductor Manufacturing International Corp.'s oversupply risk lingers and could lead to diminishing return on equity, Jefferies analysts say in a research note. The recent stock-market rally riding on China's stimulus and positive sentiment over further localization of chip production in China could continue to benefit SMIC's share price, they say. SMIC is expanding power-device capacity to support the auto and renewable segments, but Jefferies is conservative about the outlook as the growth rate of supply will likely continue to surpass demand. Jefferies raises its 2024-2027 revenue forecasts by 4% to reflect faster-than-expected revenue recovery. Jefferies maintains a hold rating for SMIC but raises its target to HK$27.00 from HK$18.00. Shares are 5.6% higher at HK$30.30. (sherry.qin@wsj.com)

(END) Dow Jones Newswires

November 10, 2024 22:54 ET (03:54 GMT)

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