<div id="readability-page-1"><div><p>JPMorgan issued a research report stating that SMIC (00981.HK)<span> </span><span> -1.650 (-2.319%)  </span> <span> Short selling $696.02M; Ratio 14.149%  </span>  reported 1Q gross margin slightly above expectations, benefiting from selective price increases, while its 2Q revenue guidance significantly exceeded expectations, reaching QoQ growth of 14% to 16%. The bank noted that although AI-related demand and localization trends have driven price hikes for certain products such as BCD, analog chips, power management and memory products (together accounting for about 40% to 50% of revenue), with part of the impact already reflected in 1Q and to be further realized in 2Q, it also expects consumer electronics demand to weaken in 2H due to front-loaded shipments in 1H and higher end-product prices.</p><p>The bank raised its 2026 and 2027 earnings forecasts for SMIC by about 15% to reflect broader price increases. It now expects EPS to reach USD0.1363 and USD0.1445 for 2026 and 2027, representing YoY growth of 59% and 6%, respectively.</p><p>Despite risks to consumer demand in 2H, given the broader-than-expected scope of price hikes, JPM upgraded SMICs investment rating from Underweight to Neutral and raised its TP from HKD57 to HKD67, implying about 2.8x price-to-book ratio. The bank believes a clearer margin recovery path (such as broader price increases sufficient to offset rising depreciation) would be needed to drive further re-rating, while downside risks stem from weaker-than-expected consumer demand weighing on pricing. (ad/da)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-05-18 12:25.)</p></div></div>

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<p>JPMorgan upgraded SMIC to Neutral and raised its target price to HKD67, citing a better-than-expected 1Q gross margin and strong 2Q revenue guidance. Despite anticipated consumer electronics demand weakening in 2H, the bank increased its 2026 and 2027 earnings forecasts by about 15%. The upgrade reflects broader price increases, although risks remain from potential declines in consumer demand.</p>

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JPM Upgrades SMIC  to Neutral, Raises TP to HKD67