The benefit of returning to A is also to enhance the status of the industry.
The positive news of SMIC ’s return to A is still affecting its share price.
May 7, SMIC (00981.HK) opened 0.36% higher, As of press time, SMIC rose 3.08% to HK $ 17.42 / share, with the latest total market value of HK $ 89.806 billion .
On the evening of May 5, SMIC issued an announcement saying that it is planning matters related to the listing of the science and technology board. The next day, SMIC Hong Kong stocks rose nearly 12% during the session, and the intraday share price reached a maximum of 17.10 Hong Kong dollars per share, which is the highest share price since February 17.
Obtaining more financial support is the most intuitive benefit of SMIC ’s return to A. CITIC Securities believes that the industrialization of advanced technology requires continuous capital investment, and IPO fundraising is necessary for the company’s development. BOC International stated that SMIC’s return to the A-share science and technology board will greatly enhance its equity financing capabilities and continue to provide a source of funding for the company’s advanced process R & D and construction and production.
According to the announcement, about 40% of the funds raised by SMIC ’s listing of the science and technology board will be used to invest in the “12-inch chip SN1 project”, This is the SMIC SN1 plant, which is used for 14nm and subsequent advanced process projects. In the third quarter of last year, SMIC’s 14nm has achieved mass production and continues to expand production capacity. According to the plan, it will be expanded to 15,000 pieces / month by the end of 2020, while the monthly capacity of the SN1 plant will reach 35,000 pieces / month.
In addition to the business level, as far as the secondary market is concerned, Guosen Securities Research reported that SMIC now has only 1.62 times the PB in Hong Kong, and the valuation is at a reasonable estimate Below the value, the IPO of the Science and Technology Board is conducive to improving the valuation of its Hong Kong stocks. Its scarcity and the importance of core assets will be reflected in the mainland capital market due to its valuation. Guosen Securities maintained its “buy” rating.
Based on the industry, the benefit of returning to A is also to enhance the status of the industry. CITIC Construction Investment said that the three major giants of TSMC, Samsung and Intel have exceeded 10 billion U.S. dollars in continuous capital investment every year for ten years. A relaxed financing environment can help heavy asset high-tech companies catch up with industry giants.
BOCI expressed a similar view, and its research report pointed out that SMIC is expected to accelerate the advancement of the advanced process and catch up with the pace after returning to A, thereby driving the entire domestic semiconductor The industrial chain shortens the gap with the international level.
WSTS & CSIA data shows that in 2018 China ’s integrated circuit market accounted for about 40% of the global market, but the self-sufficiency rate was only about 15%. CITIC Securities estimates that SMIC will continue to benefit from domestic substitution, with a year-round trend going up, maintaining a “buy” rating, and raising its target price to HK $ 21.58 .