On October 8th, Huatai Securities published a report stating that, with the continued recovery in consumer electronics demand, the domestic leading semiconductor manufacturing capacity utilization rate is expected to maintain a recovery trend, and performance is expected to continue to improve. Supported by a steady recovery after hitting the bottom in fundamentals, the valuation repair sustainability of the subsequent Hong Kong-listed semiconductor manufacturing sector is bullish. The report points out that this year, the foundry industry has shown two major differentiations, namely advanced compared to mature. In the first half of the year, demand for high-end smartphones and AI was strong, with 3/5nm fully loaded, taiwan semiconductor's revenue growing rapidly and stock price leading the sector; however, mature processes have been relatively sluggish, with United Microelectronics, GlobalFoundries and others experiencing only single-digit revenue growth from January to August. With the drive for localized production demand in the mainland and restocking of the industry chain such as smartphones and home appliances, mainland manufacturers such as SMIC and Hua Hong have significantly higher capacity utilization rates in the first half of the year, around 90%, compared to overseas counterparts like United Microelectronics with around 70%. Since mid-September, the valuation and stock prices of SMIC and Hua Hong have rapidly recovered, and with the continuous recovery in end demand, the current round of semiconductor manufacturing sector valuation repair is expected to continue.