On August 13th, Guosen Securities research reports reveal that the company's Q2 performance was impressive. Q2 achieved revenue of $1.901 billion, up 21.8% year-on-year and 8.6% quarter-on-quarter, exceeding the upper limit of the company's previous revenue guidance range of 5%-7% quarter-on-quarter growth, mainly due to the quarterly increase of 18% in wafer shipments that offset the 8% drop quarter-on-quarter caused by the change in product mix. In terms of profitability, the company's Q2 gross margin was 13.9%, exceeding the upper range of the company's previous gross margin guidance range of 9%-11% and rising by 0.2 percentage points quarter-on-quarter, but declining by 6.4 percentage points year-on-year, while the net income attributable to its parent company reached $0.165 billion, down 59% year-on-year, and up 129% quarter-on-quarter; the corresponding net margin increased by 5 percentage points quarter-on-quarter to 9%. The company's Q3 guidance is strong and exceeds expectations. The company's Q3 revenue guidance is 13%-15% quarter-on-quarter growth, corresponding to $2.15-2.19 billion, with a median value over 16% higher than the market's expected $1.87 billion; the gross margin guidance is 18%-20%, with a median value of about 7 percentage points higher than the market's expected 12.08%. The strong performance is attributed to the acceleration of local demand, the improvement of capacity utilization rate, and the rise in ASP. The company expects that the full-year revenue growth rate in 2024 will exceed the industry average, and the revenue scale in the second half of the year is expected to exceed that in the first half. Bullish on downstream demand recovery, the bank maintains a "buy" rating on Semiconductor Manufacturing International Corporation's Hong Kong stocks/A-shares, with expectations of improving capacity utilization rate and rising wafer ASP in the future.