In today’s briefing:
- China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon
- [KE Holdings (BEKE US, BUY, TP US$24) Target Price Change]: Benefiting from Structural Change
China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon
- Both SMIC & Hua Hong reported Q423 earnings in line with expectations and both guided Q124 flat to slightly down. SMIC expects FY24 mid single digit growth YoY.
- The downturn has exposed inherent weakness in China’s Semi Foundry segment relative to peers as exemplified by the significant GM disparity
- China’s two leading semi foundries have ~80% domestic dependence. Right now, that’s a headwind
[KE Holdings (BEKE US, BUY, TP US$24) Target Price Change]: Benefiting from Structural Change
- We expect KE Holdings (Beike) C4Q23 revenue to be in-line with consensus, with non-GAAP NI 15.6% higher than consensus, mainly due to better existing home sales.
- Although overall home living demand remains lukewarm in 2023, the structural substitution from purchasing new home to existing home has accelerated, benefiting Beike, in our view.
- We maintain the stock as BUY rating and trim down TP by US$0.5 to US$24.0/ADS to factor in the weak new home sales.
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