SMIC IPO bigger than expected?

February 23, 2004 – The IPO of China’s Semiconductor Manufacturing International Corp. (SMIC) could raise up to $1.58 billion, about 5% higher than initial projections, according to Dow Jones.

The offering’s price range is about 2.0-2.3 times SMIC’s estimated 2004 book value, which would give the fifth-largest chipmaker (in terms of 1H03 sales) a more expensive P/E ratio than either TSMC or UMC, with a price-to-book value about equal or slightly cheaper than the two.

SMIC is predicting its revenue could triple in 2004 with new operations coming online during the market upturn, but that it will achieve only a small profit at best due to high R&D and depreciation expenses.


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