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Semiconductor Manufacturing International (SEHK:981) has released its fourth quarter 2025 earnings together with fresh first quarter 2026 guidance, giving investors new revenue, profit and margin markers to evaluate the Hong Kong listed foundry.
See our latest analysis for Semiconductor Manufacturing International.
After the fourth quarter figures and first quarter 2026 guidance, the recent 4.07% 7 day share price return and 0.79% 1 day move contrast with a 9.05% 1 month share price decline. At the same time, the 1 year total shareholder return of 54.45% and roughly 3x 3 year total shareholder return indicate that longer term momentum has been strong despite the softer year to date share price return of 6.32%.
If earnings news around chipmakers has your attention, it could be worth broadening your watchlist with 34 AI infrastructure stocks as another way to find potential beneficiaries of demand for compute capacity.
So with revenue expected to be flat next quarter and the share price pulling back over the past month, is Semiconductor Manufacturing International now trading below what its recent earnings justify, or is the market already counting on future growth?
With Semiconductor Manufacturing International last closing at HK$70.35 against a narrative fair value of HK$74.69, the widely followed view is that the current price sits below what the long term assumptions support.
The analysts have a consensus price target of HK$49.742 for Semiconductor Manufacturing International based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of HK$68.0, and the most bearish reporting a price target of just HK$20.0.
Want to know what is sitting behind a higher fair value than that consensus target? The narrative leans on steady top line expansion, thicker margins and a rich future earnings multiple. Curious which specific growth and profitability assumptions have to line up for HK$74.69 to make sense?
Result: Fair Value of HK$74.69 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, the narrative also flags risks, including reliance on Chinese demand and margin pressure from pricing and heavy capital spending, which could challenge those fair value assumptions.
Find out about the key risks to this Semiconductor Manufacturing International narrative.
The fair value narrative suggests Semiconductor Manufacturing International is 5.8% undervalued at HK$74.69, but the current P/E of 116.1x tells a tougher story. That is much higher than the Asian semiconductor industry at 42.9x, peers at 32.8x, and above a fair ratio of 44.3x.
In practice, that means a lot of optimism is already priced in, so any slip in earnings or sentiment could matter more for the share price. Do you see this as justified confidence, or valuation risk that leaves less room for error?
See what the numbers say about this price — find out in our valuation breakdown.
SEHK:981 P/E Ratio as at Feb 2026
If parts of this story do not quite line up with your own view, or you prefer to test the assumptions yourself, you can build a custom narrative in just a few minutes and Do it your way.
A great starting point for your Semiconductor Manufacturing International research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
If Semiconductor Manufacturing International is on your radar, do not stop there. Use the screener to quickly spot other ideas that fit what you are looking for.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include 0981.HK.
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