Hong Kong · HKEX · 00981
SMIC (00981) stock analysis: valuation and financials
半导体
HK$55.55 -1.2% Price as of Oct 13, 2026
China's scaled foundry with policy backing: 20.8% five-year revenue CAGR but ROIC 4.3%, FCF -CNY36.6B and 57.2x PE; base case implies -66.5% upside — unattractive at this price.
- Market cap
- HK$475.6B
- P/E
- 57.2x
- EV/Sales
- 5.8x
- FCF yield
- -4.0%
- 52-week range
- HK$50.70 – HK$89.40
Research as of Oct 14, 2026
Business quality scorecard
- Growth63
- Profitability19
- Cash flow50
- Balance sheet67
- Capital allocation35
- Innovation20
- Valuation3
0–100, computed from reported financials; higher is better, and a higher valuation score means cheaper.
How it makes money
Global fabless design houses and integrated device makers pay per wafer for 8-inch and 12-inch foundry capacity plus attached technology services; 12-inch foundry is the profit engine, with FY2025 gross margin 21.0% and operating margin 11.9%.
Financials by year
| FY2021Jan–Dec 2021 | FY2022Jan–Dec 2022 | FY2023Jan–Dec 2023 | FY2024Jan–Dec 2024 | FY2025Jan–Dec 2025 | |
|---|---|---|---|---|---|
| Revenue | ¥34.7B | ¥50.7B | ¥44.8B | ¥57.7B | ¥65.6B |
| Revenue growth | +36.1% | +46.0% | -11.6% | +28.9% | +13.6% |
| Gross margin | 30.8% | 38.0% | 19.3% | 18.0% | 21.0% |
| Operating margin | 25.6% | 25.2% | 5.7% | 5.9% | 11.9% |
| Net income | ¥10.9B | ¥12.7B | ¥6.4B | ¥3.5B | ¥4.8B |
| Free cash flow | -¥8.5B | -¥6.4B | -¥30.3B | -¥32.3B | -¥36.6B |
| FCF margin | -24.4% | -12.5% | -67.6% | -56.0% | -55.9% |
Amounts in CNY · What is free cash flow?
Margins Gross margin rose to 21.0% in FY2025 from 18.0% FY2024 (+2.95pp) and 21.8% TTM; operating margin 11.9% vs 5.9% (+6.0pp). Q2 FY2026 gross margin 25.4%. Driver: 13.6% revenue growth and better utilisation against heavy depreciation.
- Cash flow WatchOCF FY2025 CNY22.45B versus net income CNY4.82B — cash conversion 4.68x; TTM OCF CNY37.79B vs CNY7.13B net income, inflated by CNY26.8B D&A.
- Debt LowNet debt only CNY8.36B, net debt/EBITDA 0.24x; total debt CNY95.5B TTM against cash CNY56.0B plus short-term investments CNY31.2B.
Balance sheet Leverage · Low
- Cash & short-term investments
- ¥87.1B
- Total debt
- ¥95.5B
- Net debt
- ¥8.4B
- Net debt / EBITDA
- 0.2x
- Interest coverage
- 3.7x
- Current ratio
- 1.9x
As of Jun 30, 2026 · Amounts in CNY · How to read a balance sheet
Management and track record
- Management WeakCapital allocation: cumulative FCF of -114.0B CNY over five years; FY2025 FCF -36.6B CNY with capex at 75.95% of revenue, funded largely by debt and equity.
Valuation range
Implied value per share · Price when researched: HK$55.55
Each scenario assumes five years of revenue growth, an FCF margin and an exit multiple, discounted to today. The assumptions and sensitivities are in the full report.
The full report also covers
- Revenue, growth and outlook of each segment
- Moat and main competitors
- Key risks
- Capital allocation: where the free cash flow went
- What management promised, and what they delivered
- Scenario assumptions and sensitivities
- A source for every claim
- Ask AI about this company
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