Source: Xinzhixun

    On the evening of May 11th, SMIC International released a quarterly performance announcement, with revenue of 10.209 billion yuan, a year-on-year decrease of 13.9%; The net profit was 1.591 billion yuan, a year-on-year decrease of 44%; Deduction of non net profit of 876 million yuan, a year-on-year decrease of 66.3%; In addition, the company‘s operating cash flow was 5.3 billion yuan, a year-on-year decrease of 49.1%.

    SMIC International stated that according to international financial reporting standards, the company‘s sales revenue in the first quarter was slightly better than the guidance, and its gross profit margin was in the upper part of the guidance. The decline in performance is mainly due to a decrease in wafer sales and reduced capacity utilization. The decrease in operating cash flow is mainly due to a decrease in cash received from selling goods.

    In addition, the total R&D investment in the first quarter was 1.154 billion yuan, an increase of 9.9% year-on-year. The proportion of R&D investment in operating revenue was 11.3%, an increase of 2.4 percentage points. This is also one of the reasons for the decline in net profit in the first quarter.

     Specifically, in the first quarter, revenue was classified by region, with China accounting for 75.5% of revenue, the United States accounting for 19.6%, and Eurasia accounting for 4.9%; Classified by application type, smartphones account for 23.5%, the Internet of Things accounts for 16.6%, and consumer electronics accounts for 26.7%; According to wafer size classification, 8-inch wafers account for 28.1% and 12-inch wafers account for 71.9%.

    For the performance of the second quarter, SMIC International expects that the capacity utilization rate and shipment volume in the second quarter are higher than those in the first quarter, and sales revenue is expected to increase by 5% to 7% month on month. The average wafer price is expected to decrease month on month due to changes in product mix; The gross profit margin is expected to be between 19% and 21%. This gross profit margin level is much lower than the 32% in the fourth quarter of last year. However, SMIC had previously predicted a 10 digit year-on-year decrease in revenue for the entire year of 2023, with a gross profit margin of around 20%.

    SMIC International: Looking ahead to the full year of 2023, although revenue bottomed out and rebounded in the second quarter, the extent of recovery in the second half of the year is not yet clear. Overall, we have not yet seen a comprehensive recovery in the market. Therefore, the guidance for the whole year remains unchanged, that is, the year-on-year decrease in sales revenue is ten digits lower, and the gross profit margin is around 20%. We will strive to do better on the existing basis. In the face of rapid market changes, we will continue to follow a market-oriented approach Strengthen dialogue with the end market through a customer-centric strategy; Fully cooperate with the launch of new products, do a good job in adjusting and supporting the production line‘s long and short legs, and welcome the next round of growth cycle

    In terms of capacity construction, SMIC International stated that the company will promote corresponding capital expenditures based on the expansion plan. At present, SMIC Shenzhen has entered mass production, SMIC Capital is expected to enter mass production in the second half of the year, SMIC East is expected to open the line by the end of the year, and SMIC Xiqing is still under construction.

    It is worth noting that on the evening of May 11th, SMIC International also announced new personnel changes. Mr. Huang Dengshan, a non-executive director and member of the Nomination Committee of the company, announced his resignation due to other work arrangements, effective from May 11, 2023. At the same time, Dr. Liu Xunfeng (hereinafter referred to as "Dr. Liu"), a candidate recommended by National Integrated Circuit Industry Investment Fund Co., Ltd., was appointed as the second class director, executive director, vice chairman of the board of directors, and member of the nomination committee of the company, effective from May 11, 2023. The annual basic salary is RMB 3.34 million and annual incentive.

    According to data, Dr. Liu Xunfeng, currently 58 years old, holds the positions of Party Secretary and Chairman of Shanghai Huayi Group Co., Ltd. (600623. SH), Chairman of Shanghai Huayi Holding Group Co., Ltd., Vice Chairman of Shanghai Chemical Industry Zone Development Co., Ltd., and also serves as a member of the 14th National Committee of the Chinese People‘s Political Consultative Conference, Vice Chairman of the China Petroleum and Chemical Industry Federation, and President of Shanghai New Materials Association. Dr. Liu has been working in large industrial groups for a long time and has over 30 years of enterprise management experience. He has served as the Deputy Chief Engineer, Deputy Director of the Investment Engineering Department, General Manager Assistant, and Deputy General Manager of the Ethylene Plant of Sinopec Shanghai Petrochemical Co., Ltd., Deputy General Manager of Shanghai SECCO Petrochemical Co., Ltd., Deputy General Manager of Shanghai Chemical Industry Park Development Co., Ltd., Deputy Secretary and President of the Party Committee of Shanghai Huayi (Group) Co., Ltd Secretary of the Party Committee and Chairman. He has been awarded the titles of Shanghai Industrial and Commercial Leader, Shanghai Outstanding Entrepreneur, and so on. Dr. Liu is a doctor of management science and engineering in Xi‘an Jiaotong University, a master of business administration in China Europe International Business School, a master of reaction engineering in the Department of chemical engineering of East China University of Technology (now called East China University of Technology), and a professor level senior engineer.