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My investment in SMIC (0981.HK)
18 Oct 2021 (340 views)  

I bought 45,000 shares of SMIC at an average price of HK $23.77. My total investment is $1,986,000 (SGD $181,000).

The current price of SMIC is $23.77 giving me a loss of 9.2%.

I bought this stock because of its strategic importance to China. Due to the restrictions placed by USA, China has to developed its own chip industry to meet its demand for chips (semiconductors) to many products. SMIC is probably the largest foundry in China. 

SMIC has a PE ratio of historical PE ratio of 26.29 (based on 2020 profit) and a prospective PE ratio of 15.54 (based on prospective 2021 profit). This implies a profit growth of 69%. It does not pay any dividend.

SMIC profit for 2020 grew by 3.0 times over 2019 profit. 

Its market capitalization is $257 billion HKD ($33 billion USD). It total debt to equity is 33%.

At the prospective PE ratio of 15.54 times, SMIC appears to be quite fully valued. It is not really an attractive long term investment, unless it is able to generate good growth for several years into the future.

By comparison, the PE ratio for Intel (INTX) is 12.09, for Qualcomm (QCOMM) is 16.27 and TSMC is 26.70.

The financial figures below are taken from Refinitiv database. The figures from Yahoo website are quite different (and certainly less attractive). I am not sure which set of figures are right.

My investment in SMIC has been quite disappointing for the past few months, but I am prepared to hold it for a year or two, to see if it can get high growth rate.

During the next few months, I will be monitoring news about SMIC and the semiconductor industry in China.

Note - I am sharing my experience in investing in this stock. I am not giving any investment advice. 


 


My investment in SMIC (0981.HK)
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I bought 45,000 shares of SMIC at an average price of HK $23.77. My total investment is $1,986,000 (SGD $181,000).

The current price of SMIC is $23.77 giving me a loss of 9.2%.

I bought this stock because of its strategic importance to China. Due to the restrictions placed by USA, China has to developed its own chip industry to meet its demand for chips (semiconductors) to many products. SMIC is probably the largest foundry in China. 

SMIC has a PE ratio of historical PE ratio of 26.29 (based on 2020 profit) and a prospective PE ratio of 15.54 (based on prospective 2021 profit). This implies a profit growth of 69%. It does not pay any dividend.

SMIC profit for 2020 grew by 3.0 times over 2019 profit. 

Its market capitalization is $257 billion HKD ($33 billion USD). It total debt to equity is 33%.

At the prospective PE ratio of 15.54 times, SMIC appears to be quite fully valued. It is not really an attractive long term investment, unless it is able to generate good growth for several years into the future.

By comparison, the PE ratio for Intel (INTX) is 12.09, for Qualcomm (QCOMM) is 16.27 and TSMC is 26.70.

The financial figures below are taken from Refinitiv database. The figures from Yahoo website are quite different (and certainly less attractive). I am not sure which set of figures are right.

My investment in SMIC has been quite disappointing for the past few months, but I am prepared to hold it for a year or two, to see if it can get high growth rate.

During the next few months, I will be monitoring news about SMIC and the semiconductor industry in China.

Note - I am sharing my experience in investing in this stock. I am not giving any investment advice.