SMIC rises 2.33% and maintains rating

SMIC (00981-HK) rose 2.33% in a half-day, at HK $0.44 and a deal of HK $51.7614 million, which won the market in early trading and the index fell 0.31%.　　Daiwa maintained the unit's rating, but lowered its target price from HK $0.36 to HK $0.42, the bank's expected 09-year market rate of 0.5 times times, before the target price equivalent to 0.44 times times the market rate, because the chip stocks were downgraded. The bank said the further adjustment would depend on the progress made by SMIC in turning around the world. Daiwa said that, according to the market-rate valuation method, while the stock's valuation was nearly 45% per cent less than that of other loss-making chips, the unit was concerned about the underlying fundamentals: executive capacity, long-term profitability and increased competition from Taiwanese chip makers.　　Added that SMIC did not have the first batch of companies to be restructured by government-backed industries. Daiwa is also expected to lose $105 million trillion in the second quarter of this year, ahead of a loss of $126 million trillion, but the forecast for fiscal year 09 is expected to increase from 374 million U.S. dollars to 375 million U.S. dollars, as revenue expectations for the second half of the year were lowered.