Assessing SMIC (SEHK:981) Valuation After Notable Share Price Swings

Semiconductor Manufacturing International (SEHK:981) shares have seen some movement in recent sessions, with investors considering the company's recent performance. Over the past month, the stock dipped 9%, although it remains up sharply in the past 3 months.

See our latest analysis for Semiconductor Manufacturing International.

After a phenomenal surge earlier this year, Semiconductor Manufacturing International’s 1-year total shareholder return now sits at nearly 170%. While momentum has cooled a bit recently with a 1-month share price return of -8.6%, the bigger picture still points to substantial long-term gains, as the 3-year total return has surpassed 315%. These swings suggest investors remain laser-focused on the company’s growth prospects and shifting risk appetite.

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But after such rapid gains and mixed recent performance, the key question remains: Is Semiconductor Manufacturing International’s impressive story fully reflected in the current share price, or could investors still be looking at meaningful upside?

Most Popular Narrative: 23% Overvalued

With Semiconductor Manufacturing International’s last close at HK$73.25 and the narrative fair value at HK$59.57, the current price sits notably higher than what analysts expect based on future earnings potential. This difference highlights the role of fierce competition, escalating spending, and big expectations in shaping the consensus view.

The ongoing push for semiconductor supply chain localization and reshoring by Chinese technology firms leads to a protected and expanding customer base for SMIC. This reduces competitive threats and enhances revenue visibility, as well as the potential for margin improvement through steady, high-capacity utilization.

Read the complete narrative.

What drives analysts’ high hopes for SMIC? The narrative hinges on bold forecasts for revenue and profit margins. Wondering what financial leaps are fueling this ambitious fair value? Get the full reveal by diving into the complete story now.

Result: Fair Value of HK$59.57 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent price pressures and reliance on Chinese demand could easily challenge the bullish narrative and lead to renewed earnings volatility.

Find out about the key risks to this Semiconductor Manufacturing International narrative.

Build Your Own Semiconductor Manufacturing International Narrative

Not convinced by the current outlook or want to dig deeper on your own terms? You can craft your personal take using our simple tools in under three minutes. Do it your way

A great starting point for your Semiconductor Manufacturing International research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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