SMIC 1Q25: strong QoQ wafer growth but weak ASP. Probably the same in 2Q. Large Capex to continue in 2025, shipment up, D&A up, ASP down, margins muted.
The stock is as expensive as always
1H25 strong revenue growth continues as capacity increase, “production shifting back domestically”, but weakening ASP and clearly demand pull-in in 1H due to US tariffs and China domestic consumer subsidies.
“2H not clear, especially after late 3Q” but not company specific. Management mentions the usual macro / US tariffs unknowns. 2025 Capex similar to 2024 (US$7.7bn or 80% of revenue), D&A increasing, ASP down, margins muted.
The stock is as expensive as always. 49x 2025 EPS, 41x 2026. Consensus is not expecting a negative tariffs shock or weaker China domestic demand.