Gelonghui, Feb. 26 | Huaxing Securities issued a report saying that SMIC's multi-year expansion plan is still progressing steadily. Currently, it is preferred to expand production with the N22-28 process to avoid competition from 12 inch/8 inch more mature process nodes, because in these more mature process fields, other domestic peers also have related production capacity and continue to expand. According to SMIC, the N22-28 process capacity expansion will be carried out at very large fabs around the world. The bank downgraded the SMIC rating to “hold”, and the target price was lowered from HK$18 to HK$14. Based on the market account ratio of 0.7 times the 2024 forecast (0.9 times previously), it is reflected that the company placed more emphasis on expanding production than profitability, causing a sharp decline in return and profit growth. It is predicted that SMIC's medium-term return on net assets will only be at a low single-digit level, while the compound annual growth rate of earnings per share from 2024 to 2026 is 25%.