Daiwa Research lifted its target price for SMIC (00981) to HK$9.2 from HK$8 and maintained its "underperform" rating.
The research house raised its 2019-20 net profit forecasts by 41% each to factor in the low base, higher-than-expected government subsidies and gross-margin trajectory.
Management painted a rosy outlook for 2020 after its business transition; Daiwa concurred and expects its top line to return to growth, but it remains concerned about SMIC's leading-edge technology execution.
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