The Science And Technology Board Will Welcome The Chip Giant To Be Listed Overseas For 16 Years, SMIC International Official Announced To A

Just 16 years after the listing of Hong Kong stocks, SMIC formally launched the A plan to seek the "A+H".

On the evening of May May, the SMIC announced that the board of directors adopted a resolution in April 30th and proposed to submit the application to the Shanghai stock exchange for the launch of the science and technology board. It recommended that the initial issue be no more than 1 billion 686 million shares, and that Haitong Securities and CICC would be co sponsors and underwriters.

If the closing price of HK $15.26 is calculated in May 5, 2020, the total fund-raising of SMIC is about 25 billion 400 million Hong Kong dollars (about 23 billion 100 million RMB).

SMIC said that about 40% of the total fund-raising amount will be spent on the 12 inch chip SN1 project, about 20% as the reserve fund for its advanced and mature R & D projects, and the remaining 40% as a supplementary Liquidity Fund. The 1 billion 686 million shares to be issued will be all Renminbi new shares, without involving the conversion of existing shares.

At present, the listing proposal still needs to be determined and restricted by market conditions, shareholders' approval at the shareholders' special meeting and necessary regulatory approvals.

If SMIC successfully listed on Ke Chuang Chuang board, it will be the first stock of red chip back to A.

After announcing the news, SMIC's share price rose sharply in May 6th, or 10.75%, with a total market value of HK $87 billion 125 million, compared with the closing price in May 5th, its market value has soared by HK $10 billion.

16 years after the listing of Hong Kong stocks, back to A

The official website shows that SMIC was founded in April 2000 and is headquartered in Shanghai.

SMIC said that the company and its holding subsidiary are one of the world's leading integrated circuit foundry enterprises. It is also the most advanced, well matched, largest and multinational integrated circuit manufacturing enterprise in mainland China, providing wafer fabrication and technical services ranging from 0.35 microns to 14 nm.

At present, SMIC has built a 300mm wafer fab and a 200mm wafer factory in Shanghai, and a 300mm advanced process wafer fab. In Beijing, there is a 300mm wafer factory and a 300mm advanced Cheng Jingyuan plant in Beijing. In Tianjin and Shenzhen, there is a 200mm wafer factory. In Jiangyin, there is a holding 300mm joint processing plant. In addition, SMIC has established marketing offices in the US, Europe, Japan and Taiwan, China, and has set up a representative office in Hongkong, China.

In the capital market, SMIC landed in the US NYSE and the Hongkong stock exchange in March 17 and 18, 2004 respectively.

In May 24, 2019, SMIC announced on the Hongkong stock exchange that the company decided to withdraw from the NYSE, and has been approved by the board of directors.

Now, after 16 years of Hong Kong stock listing, SMIC has finally started its way back to A.

Referring to the reasons for returning to the domestic market, SMIC's board of Directors believes that the issuance of Renminbi shares will enable them to enter China's capital market through equity financing and to improve their capital structure while maintaining their international development strategy. In addition, the RMB share "in line with the overall interests of the company and shareholders is conducive to strengthening its sustainable development."

Wind data show that SMIC achieved revenue of about 14 billion 713 million yuan, 20 billion 216 million yuan, 20 billion 326 million yuan, 23 billion 184 million yuan and 21 billion 797 million yuan in 2015-2019 years, respectively, with net profit of 1 billion 646 million yuan, 2 billion 613 million yuan, 1 billion 174 million yuan, 920 million yuan and 1 billion 637 million yuan (RMB) respectively.

According to the 2019 annual report, domestic business still accounts for the largest revenue of SMIC, and its business revenue accounts for 59.5% of China's revenues. In addition, the US and Eurasia account for 26.4% and 14.1% respectively. Despite its decline in revenue in 2019, SMIC has set the target of growth of 11% to 19% this year based on its strategic position in China, and plans to maintain gross margins at 20%.

In addition, SMIC said in its 2019 annual report, "the company has made breakthroughs in the research and development of advanced processes. The first generation of 14nmFinFET technology has entered mass production. In the fourth quarter of 2019, it contributed about 1% of the wafer revenue. It is expected to grow steadily in 2020. The second generation FinFET technology platform will continue to import customers, and will grasp the industrial development opportunities such as 5G, Internet of things, vehicle electronics and so on.

As for the "12 inch chip SN1 project" mentioned in the fund-raising use of SMIC, a recent media report revealed some information. "As a major project in Shanghai, SMIC 12 inch chip SN1&SN2 plant construction project is located in Zhangjiang hi tech park, Pudong New Area. It is expected to be fully completed in August this year, with a total construction area of about 400 thousand square meters."

The article also mentioned, "the main contents of the project include SN1 production plant, CU8 power plant and SO8 production scheduling and R & D building, three large single buildings and some supporting facilities. This project is an investment project to break the monopoly of foreign countries and realize China's strong core dream, and the process node can cover 14 nanometer -7 nanometer".

An analysis of broker dealers pointed out that SMIC technology breakthroughs will accompany the construction boom of the Fab in China, and the demand for supporting industries will grow exponentially.

SMIC's many A shares "partners"

SMIC A, which represents the level of China's chip manufacturing, has gained widespread attention in the market.

In May 6th, A shares semiconductor, domestic chip, photoresist and other sectors were rising, mega innovation, Jingrui shares were all trading, and the technology of long electric power increased by 8.1%. Jacques technology and Jiangfeng electronics were also booming.

In addition, the company of the Chuang Chuang board, poly Chen shares and Anji technology limit, the micro and micro companies rose nearly 14%.

It is worth mentioning that SMIC has a large number of A shares "partners", mainly for equipment and materials enterprises.

Tianfeng securities research report pointed out that "as the leading domestic advanced enterprise, the localization process of upstream supply chain of SMIC deserves attention. In the supply chain of SMIC, equipment companies mainly include China micro company, North Huachuang, Sheng Mei semiconductor, Shenyang tujing and so on. Material suppliers mainly include Walter gas, Jiangfeng electronics, Anji technology, Jacques technology, Jingrui stock and so on.

For example, SMIC is the first largest customer of China's Micro equipment company in 2016. The plasma etching equipment of China microelectronics has been applied to 55 to 5 nanometer chip production lines of well-known manufacturers both at home and abroad.

In addition, SMIC is the largest single customer of Anji technology, accounting for about 60%. The chemical mechanical polishing fluid of Anji technology has been sold in large scale at 130-14nm technology node, mainly used in the domestic 8 inch and 12 inch mainstream wafer production line; 10-7nm technology node products are being developed.

Coincidentally, Jing Rui shares said that the company's photoresist product entered the SMIC Tianjin factory 8 inch line test in 2018 and was used in batches.

Ding long shares also mentioned that the company is responsible for SMIC's sub task "20-14nm technology node CMP polishing wafer product development" task; NTU also mentioned that it supplies SMIC with electronic special gases.

At present, SMIC is still the shareholder of the leading technology in the domestic leading technology. As at the end of the first quarter of 2020, SMIC holdings semiconductor (Shanghai) Co., Ltd. has a shareholding of 14.28%, which is the second largest shareholder.

"HSI, SMIC and Changdian technology as local semiconductor design, OEM and sealed test leading enterprises, the first quarter performance is expected to grow faster than expected, and it is expected to promote the localization of semiconductors in a coordinated way", the Great Wall securities analysis pointed out.