Breaking news! The Big Fund reduced its holdings of SMIC by 100 million shares...

On April 15, China Securities Journal checked the data disclosed by the Hong Kong Stock Exchange and found that the National Integrated Circuit Industry Investment Fund (National Integrated Circuit Industry Investment Fund Phase I) sold a total of 100 million shares of SMIC Hong Kong stocks on April 9 and April 12. The proportion of equity shares held dropped from 10.21% at the beginning of 2021 to 8.93% on April 12, cashing out a total of approximately HK$2.58 billion.

The National Integrated Circuit Industry Investment Fund Phase I indirectly holds SMIC through Xinxin Hong Kong, a wholly-owned subsidiary of Xunxin (Shanghai) Investment Co., Ltd.

According to the 2020 annual report of SMIC Hong Kong stocks, as of the end of 2020, the National Integrated Circuit Industry Investment Fund Phase I indirectly held 622 million shares of SMIC Hong Kong stocks through Xinxin Hong Kong, and obtained 183 million equity interests through the subscription of perpetual subordinated convertible securities, with a total equity interest of 805 million shares. According to the data of the Hong Kong Stock Exchange, on January 5, 2021, the National Integrated Circuit Industry Investment Fund Phase I has exercised the share rights under the derivative instrument, with a conversion price of HK$12.78 per share.

The first phase of the National Big Fund's reduction of holdings coincided with the high prosperity of the chip industry. SMIC also successfully removed its U-listing on the Science and Technology Innovation Board. SMIC said that the company's net profit attributable to shareholders of the parent company in 2020 and the net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses were both positive, meeting the situation of "a company that was not profitable at the time of listing achieved profitability for the first time". The company's A-share stock name will cancel the special mark on April 2, 2021, and will be changed from "SMIC-U" to "SMIC". SMIC also became the first company to remove its U-listing on the Science and Technology Innovation Board.

According to the annual report data of SMIC A shares, in 2020, SMIC achieved revenue of 27.471 billion yuan, a year-on-year increase of 24.8%; the net profit attributable to the parent company's shareholders reached 4.332 billion yuan, a year-on-year increase of 141.5%; the non-net profit was 1.697 billion yuan, successfully turning losses into profits. In the same period of 2019, the net loss was 522 million yuan.

According to the annual report, in 2020, SMIC achieved a main business revenue of 26.975 billion yuan, a year-on-year increase of 25.6%. Among them, the revenue of wafer foundry business was approximately 23.989 billion yuan, accounting for 88.9% of the main business revenue in 2020, and the revenue increased by 20.0% year-on-year; the total revenue from photomask manufacturing, testing and other supporting technical services was 2.986 billion yuan, accounting for 11.1% of the main business revenue in 2020, and the revenue increased by 102.3% year-on-year.

SMIC said that the main reason for the change in operating income was the increase in the number of wafers sold and the change in product mix during the period. The number of wafers sold increased by 13.3% from 5 million 8-inch wafers last year to 5.7 million 8-inch wafers during the reporting period. The average selling price (main business income divided by the total number of wafers sold) increased from RMB 4,269 last year to RMB 4,733 this year.

However, although the National Integrated Circuit Industry Investment Fund Phase I reduced its holdings in SMIC, the National Integrated Circuit Industry Investment Fund Phase II became a shareholder of SMIC in 2020 and participated in the investment in SMIC South and SMIC's new projects in Beijing.

In addition to SMIC, the National Integrated Circuit Industry Investment Fund Phase I recently announced plans to reduce its holdings in chip companies such as Changchuan Technology and Beidou Starlink, and also reduced its holdings in GigaDevice and Jingfang Technology.