Hong Kong Semiconductor Stocks Surge, SMIC Hits Four-Year High
Hong Kong’s semiconductor sector continues to rally, driven by policy stimulus and renewed investment in China. The sector’s fundamentals are also improving, with the industry entering an upward cycle. SMIC and Hua Hong, the leading wafer foundries, are currently trading atrelatively low valuations.
[Hong Kong, October 7, 2024] – Macroeconomic stimulus policies have propelled a sustained surge in Hong Kong’ssemiconductor sector. At the close of trading on October 7, SMIC (00981.HK), China’s largest wafer foundry, soared 21.76% to close at HK$33.3per share, marking a four-year high. Its market capitalization reached HK$265.5 billion. Another wafer foundry, Hua Hong Semiconductor (01347.HK), climbed 16.25% toclose at HK$32.55 per share, reaching a one-and-a-half-year high with a market capitalization of HK$559.1 billion.
This rally has also benefited numerous smaller semiconductor companies. Over the past two trading days, October 4 and 7, ShanghaiFudan (01385.HK), a semiconductor design and development service provider, rose 26.39% and 20.59% respectively. Jingdongfang Jingdian (00710.HK), a supplier of automotive semiconductors, gained 5.86%and 16.94% respectively.
The current surge is attributed to a combination of factors, including policy stimulus, enhanced investment expectations in China, and a gradual shift towards an upward cycle in the semiconductor industry. While SMIC and Hua Hong are currently trading at relatively low valuations, their fundamentals remain strong,indicating potential for further growth.
[Source: Caixin Global]
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