Glonghui, Feb. 20 | Bank of China International released a research report stating that while maintaining SMIC's “buy” rating, the target price was lowered to HK$22.2. According to the report, the company's performance in the fourth quarter of last year was generally in line with expectations, but the market was disappointed with its conservative guideline of only 9% to 11% gross margin for the first quarter, and investors were even more concerned about overcapacity at its mature nodes. Unless SMIC fully digests its production capacity, there will still be pressure on the average selling price of products. The bank expects that although the company faced operational challenges in the first half of the year, it is expected to see a significant recovery in the second half of the year, mainly due to expectations that demand for terminals in the market will bottom out, orders from leading companies such as Huawei will provide strong momentum, and SMIC's relatively advanced domestic manufacturing process leading market with 28 nm nodes and below will be difficult to be shaken by peers.