SMIC stock forecast

SMIC's weighted forecast is HK$63.78 in October 2027, rising to HK$74.23 in October 2029. It hinges on whether SMIC can turn factory expansion into cash returns.

Where could SMIC's shares be by 2029?

The weighted price is HK$63.78 in October 2027. It rises to HK$68.70 in October 2028 and HK$74.23 in October 2029. Including dividends, the returns are 17% and 27% in the first two periods. The 2029 return is 37% from today’s HK$54.30.

At October 2029, the bear case is HK$24.46. The bull case is HK$153.28. The probabilities are 30%, 50% and 20% for bear, base and bull.

What has to go right or wrong for SMIC's forecast?

Base revenue rises from $12,800 million to $14,000 million. It reaches $15,000 million thereafter, while margins move from 56% to 57.5%. Q2 shipments rose 14.4% sequentially, selling prices rose 5.7% and utilization reached 93.7%. These facts support growth, but capacity contributes only after qualification and production. The bear case falls to $5,616 million as pull-ins reverse and margins reach 48%. The bull case reaches $10,980 million as domestic and AI-related orders, yields and mix improve.

How much cash does SMIC really make?

Capital spending reached US$8,403.471 million. That left free cash flow negative US$5,226.482 million, and deducting stock compensation produced real free cash flow of negative US$5,254.521 million. Interest paid is already included in operating cash, so subtracting it again would count the same payment twice.

What does an investor pay for SMIC today?

The price-to-earnings ratio, or P/E, shows how much investors pay for each dollar of annual profit. SMIC’s trailing P/E is far above its forward P/E, so the lower forward figure depends on profits arriving. That profit also needs checking: other income reached US$275.9 million in the second quarter, helped by rising investment values. Such gains can lift reported earnings without SMIC producing another wafer.