Bank of America Merrill Lynch issued a report that SMIC's quarterly net profit in the first quarter of last year was higher than the bank and market forecasts, revenue fell 3.4% year-on-year expected operating profit margin due to 34 million US dollars research and development subsidies and local government subsidies and high As expected, management materials revenue for the first quarter of this year will grow 7% -9% quarter-to-quarter, including revenue from one-off technology patents with a gross profit margin of 25% -27%.
However, the bank said its guidance on performance shows that the first quarter revenue after excluding one-off revenue actually dropped 11% quarter-on-quarter and the actual gross profit margin was expected to range from 10% -12%. Management's cautious outlook for 28nm wafer business was mainly due to pricing pressure The bank cut its earnings forecast for the next two years, the target price cut from 10.5 yuan to 9 yuan, reiterated 'underperform' rating.
