SEHK:981

Stock Analysis Report

Semiconductor Manufacturing International

Executive Summary

Semiconductor Manufacturing International Corporation, an investment holding company, engages in the computer-aided design, manufacture, testing, packaging, and trading of integrated circuits (IC) and other semiconductor services.

Rewards

Earnings are forecast to grow 8.91% per year

Risk Analysis

Has a high level of debt

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Mediocre balance sheet with limited growth.


Similar Companies

Hua Hong Semiconductor

SEHK:1347

Share Price & News

How has Semiconductor Manufacturing International's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 981's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-8.9%

981

-3.5%

HK Semiconductor

0.3%

HK Market


1 Year Return

95.8%

981

51.2%

HK Semiconductor

-5.1%

HK Market

Return vs Industry: 981 exceeded the Hong Kong Semiconductor industry which returned 51.2% over the past year.

Return vs Market: 981 exceeded the Hong Kong Market which returned -5.1% over the past year.


Shareholder returns

981IndustryMarket
7 Day-8.9%-3.5%0.3%
30 Day4.9%-1.6%-3.9%
90 Day55.5%36.5%4.4%
1 Year95.8%95.8%53.4%51.2%-1.6%-5.1%
3 Year50.5%50.5%44.8%37.7%13.4%1.9%
5 Year131.5%131.5%31.4%20.1%15.6%-3.6%

Price Volatility Vs. Market

How volatile is Semiconductor Manufacturing International's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Semiconductor Manufacturing International undervalued compared to its fair value and its price relative to the market?

63.42x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate 981's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate 981's fair value to establish if it is undervalued.


Price To Earnings Ratio

PE vs Industry: 981 is poor value based on its PE Ratio (63.4x) compared to the Semiconductor industry average (19.2x).

PE vs Market: 981 is poor value based on its PE Ratio (63.4x) compared to the Hong Kong market (10.2x).


Price to Earnings Growth Ratio

PEG Ratio: 981 is poor value based on its PEG Ratio (7.1x)


Price to Book Ratio

PB vs Industry: 981 is overvalued based on its PB Ratio (1.7x) compared to the HK Semiconductor industry average (1.4x).


Next Steps

Future Growth

How is Semiconductor Manufacturing International forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

8.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 981's forecast earnings growth (8.9% per year) is above the savings rate (1.6%).

Earnings vs Market: 981's earnings (8.9% per year) are forecast to grow slower than the Hong Kong market (11.8% per year).

High Growth Earnings: 981's earnings are forecast to grow, but not significantly.

Revenue vs Market: 981's revenue (14.2% per year) is forecast to grow faster than the Hong Kong market (10.5% per year).

High Growth Revenue: 981's revenue (14.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 981's Return on Equity is forecast to be low in 3 years time (9.7%).


Next Steps

Past Performance

How has Semiconductor Manufacturing International performed over the past 5 years?

-9.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 981 has a large one-off gain of $100.8M impacting its September 30 2019 financial results.

Growing Profit Margin: 981's current net profit margins (5.3%) are higher than last year (4.6%).


Past Earnings Growth Analysis

Earnings Trend: 981's earnings have declined by -9.1% per year over the past 5 years.

Accelerating Growth: 981's earnings growth over the past year (4.2%) exceeds its 5-year average (-9.1% per year).

Earnings vs Industry: 981 earnings growth over the past year (4.2%) underperformed the Semiconductor industry 4.2%.


Return on Equity

High ROE: 981's Return on Equity (1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Semiconductor Manufacturing International's financial position?


Financial Position Analysis

Short Term Liabilities: 981's short term assets ($6.9B) exceed its short term liabilities ($2.9B).

Long Term Liabilities: 981's short term assets ($6.9B) exceed its long term liabilities ($3.6B).


Debt to Equity History and Analysis

Debt Level: 981's debt to equity ratio (44%) is considered high.

Reducing Debt: 981's debt to equity ratio has increased from 32.3% to 44% over the past 5 years.

Debt Coverage: 981's debt is well covered by operating cash flow (24.8%).

Interest Coverage: Insufficient data to determine if 981's interest payments on its debt are well covered by EBIT.


Balance Sheet

Inventory Level: 981 has a high level of physical assets or inventory.

Debt Coverage by Assets: 981's debt is covered by short term assets (assets are 1.6x debt).


Next Steps

Dividend

What is Semiconductor Manufacturing International's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%2.3%markettop25%6.3%industryaverage1.8%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate 981's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate 981's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 981's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 981's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 981's dividend in 3 years as they are not forecast to pay a notable one for the Hong Kong market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.7yrs

Average management tenure


CEO

Haijun Zhao (55yo)

2.8yrs

Tenure

US$1,538,000

Compensation

Dr. Haijun Zhao has been Co-Chief Executive Officer and Executive Director of Semiconductor Manufacturing International Corporation since May 10, 2017 and October 16, 2017, respectively. Dr. Zhao served as ...


CEO Compensation Analysis

Compensation vs Market: Haijun's total compensation ($USD1.54M) is above average for companies of similar size in the Hong Kong market ($USD1.12M).

Compensation vs Earnings: Haijun's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Zixue Zhou
Chairman of the Board4.9yrsUS$824.00kno data
Haijun Zhao
Co-CEO & Executive Director2.8yrsUS$1.54mno data
Mong Song Liang
Co-CEO & Executive Director2.3yrsUS$478.00kno data
Gao Yonggang
CFO, Executive VP10.7yrsUS$608.00kno data
Mei Sheng Zhou
Executive VP of Technology Research & Development2.3yrsUS$620.00kno data
Zhi Li
Executive VP of Legal0yrsUS$428.00kno data
Wenyi Zhang
Honorary Chairman and Advisor4.9yrsUS$610.00kno data
Tim Kuo
Investor Relations Director0yrsno datano data
Sam Wang
Corporate Vice President and President of Smic Americas0yrsno datano data
Wei Liu
Joint Company Secretary2.6yrsno datano data

2.7yrs

Average Tenure

61yo

Average Age

Experienced Management: 981's management team is considered experienced (2.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Zixue Zhou
Chairman of the Board4.9yrsUS$824.00kno data
Haijun Zhao
Co-CEO & Executive Director2.8yrsUS$1.54mno data
Mong Song Liang
Co-CEO & Executive Director2.3yrsUS$478.00kno data
Gao Yonggang
CFO, Executive VP10.7yrsUS$608.00kno data
Wenyi Zhang
Honorary Chairman and Advisor4.9yrsUS$610.00kno data
William Brown
Independent Non Executive Director6.5yrsUS$278.00kno data
Juen-Yee Lau
Independent Non-Executive Director8.7yrsUS$142.00kno data
Jie Zhou
Non-Executive Director11.1yrsno datano data
Shanzhi Chen
Non-Executive Director10.7yrsUS$339.00kno data
Ren-Da Fan
Independent Non-Executive Director9.6yrsUS$144.00kno data

7.6yrs

Average Tenure

59.5yo

Average Age

Experienced Board: 981's board of directors are considered experienced (7.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 981 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3%.


Top Shareholders

Company Information

Semiconductor Manufacturing International Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Semiconductor Manufacturing International Corporation
  • Ticker: 981
  • Exchange: SEHK
  • Founded: 2000
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Market Cap: HK$80.150b
  • Shares outstanding: 5.10b
  • Website: https://www.smics.com

Number of Employees


Location

  • Semiconductor Manufacturing International Corporation
  • No.18 Zhangjiang Road
  • Pudong New Area
  • Shanghai
  • 201203
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SMIC.YOTCPK (Pink Sheets LLC)SPONSORED ADSUSUSDMar 2004
MKN1DB (Deutsche Boerse AG)SPONSORED ADSDEEURMar 2004
SIUI.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMar 2004
981SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDMar 2004
MKN2DB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 2004
981SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDMar 2004
981SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDMar 2004
8DVBSGX (Singapore Exchange)2% CNV SUB PERP USD250000 'REGS'SGUSDOct 2018

Biography

Semiconductor Manufacturing International Corporation, an investment holding company, engages in the computer-aided design, manufacture, testing, packaging, and trading of integrated circuits (IC) and other semiconductor services. It is also involved in wafer manufacturing, wafer probing and bumping, technology development, design service, mask manufacturing, assembly and final testing of integrated circuits; and sales of self-manufactured products. In addition, the company designs and manufactures semiconductor masks; and offers marketing related services. It operates in the United States, Europe, and the Asia Pacific. The company serves integrated device manufacturers, fabless semiconductor companies, and system companies. Semiconductor Manufacturing International Corporation was founded in 2000 and is headquartered in Shanghai, the People’s Republic of China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 12:53
End of Day Share Price2020/02/20 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.