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SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION

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Semiconductor Manufacturing International : SMIC REPORTS UNAUDITED RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2020

08/06/2020 | 04:49am EDT

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this document.

SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION

中 芯 國 際 集 成 電 路 製 造 有 限 公 司*

(Incorporated in the Cayman Islands with limited liability)

(STOCK CODE: 00981)

SMIC REPORTS UNAUDITED RESULTS FOR THE THREE MONTHS ENDED JUNE 30, 2020

  • Revenue was a record high of $938.5 million in 2Q20, an increase of 3.7% QoQ from $904.9 million in 1Q20, and 18.7% YoY from $790.9 million in 2Q19.
  • Gross profit was $248.6 million in 2Q20, an increase of 6.4% QoQ from $233.6 million in 1Q20 and 64.5% YoY from $151.2 million in 2Q19.
  • Gross margin was 26.5% in 2Q20, compared to 25.8% in 1Q20 and 19.1% in 2Q19.

Set out below is a copy of the full text of the release by the Company and its subsidiaries (the "Group") on August 6, 2020, in relation to its unaudited results for the three months ended June 30, 2020.

All currency figures stated in this report are in US Dollars unless stated otherwise.

The consolidated financial information is prepared in accordance with International Financial Reporting Standards ("IFRS") and is presented in accordance with IFRS unless otherwise stated below.

Shanghai, China - August 6, 2020. Semiconductor Manufacturing International Corporation (SSE STAR MARKET: 688981; SEHK: 00981; OTCQX: SMICY) ("SMIC", the "Company" or "our"), one of the leading semiconductor foundries in the world, today announced its consolidated results of operations for the three months ended June 30, 2020.

* For identification purposes only

- 1 -

Third Quarter 2020 Guidance

The following statements are forward looking statements based on current expectations and involved risks and uncertainties, some of which are set forth under "Forward-Looking Statements" below. The Company expects:

  • Revenue to increase by 1% to 3% QoQ.
  • Gross margin to range from 19% to 21%.
  • Non-IFRSoperating expenses to range from $220 million to $235 million.
  • Losses to be borne by non-controlling interests of our majority-owned subsidiaries to range from $0 to $10 million.

Dr. Zhao Haijun and Dr. Liang Mong Song, SMIC's Co-Chief Executive Officers commented, "Although the macro environment remains uncertain, IC demand continues to be strong. Our second quarter revenue reached another record high of $938 million, an increase of 4% quarter-over-quarter and a 19% year-over-year increase; profit for the period attributable to SMIC also reached another historical high of $138 million.

In the second quarter, demand for our mature node technology platforms was strong, reflected in substantial growth in our consumer sector revenue, and our advanced technology business is progressing steadily. We maintain a high utilization, our expansion plan will release gradually, and our third quarter revenue is guided to grow to another all-time high.

SMIC is committed to innovation and development, capturing domestic and international opportunities, providing quality products and services to an increasing number of customers locally and globally, and driving the company's continued growth."

- 2 -

Conference Call / Webcast Announcement

Date: August 7, 2020

Time: 8:30 a.m. Beijing time

Dial-in:

Teleconference call services are affected by the COVID-19, operator assisted conference calls are not available at the moment. You must preregister online in order to receive the dial-in numbers.

Online registration:

You may register for the conference call at:

http://apac.directeventreg.com/registration/event/1289672

Once preregistration has been complete, you will receive dial-in numbers, the passcode, and a unique registrant ID. To join the conference, dial the number you receive in the email, enter the passcode followed by your registrant ID, and you will join the conference instantly.

The call will be webcast live with audio at:

http://www.smics.com/en/site/company_activityor https://edge.media-server.com/mmc/p/4majjijt

An archived version of the webcast, along with an electronic copy of this news release will be available on the SMIC website for a period of 12 months following the webcast.

About SMIC

Semiconductor Manufacturing International Corporation ( "SMIC", SSE STAR MARKET: 688981;

SEHK: 00981; OTCQX: SMICY) and its subsidiaries collectively constitute one of the leading foundries in the world, is Mainland China's most advanced and largest foundry, broadest in technology coverage, and most comprehensive in semiconductor manufacturing services. SMIC Group provides integrated circuit (IC) foundry and technology services on process nodes from 0.35 micron to 14 nanometer. Headquartered in Shanghai, China, SMIC Group has an international manufacturing and service base. In China, SMIC has a 300mm wafer fabrication facility (fab) , a 200mm fab and a majority-ownedjoint-venture 300mm fab for advanced nodes in Shanghai; a 300mm fab and a majority-owned 300mm fab for advanced nodes in Beijing; 200mm fabs in Tianjin and Shenzhen; and

  1. majority-ownedjoint-venture 300mm bumping facility in Jiangyin. SMIC Group also has marketing and customer service offices in the U.S., Europe, Japan, and Taiwan China, and a representative office in Hong Kong China.

For more information, please visit www.smics.com.

Forward-Looking Statements

This release contains, in addition to historical information, forward-looking statements. These forward- looking statements, including statements under "Quarterly Guidance", "Capex Summary" and the statements contained in the quotes of our Co-Chief Executive Officers are based on SMIC's current assumptions, expectations, beliefs, plans, objectives, and projections about future events or performance. SMIC uses words like "believe," "anticipate," "intend," "estimate," "expect," "project," "target, "going forward", "continue", "ought to", "may", "seek", "should", "plan", "could", "vision", "goals", "aim", "aspire", "objective", "schedules", "outlook" and similar expressions to identify forward looking statements, although not all forward-looking statements contain these words. These forward-looking statements are necessary estimates reflecting judgment of SMIC's senior management and involve significant risks, both known and unknown, uncertainties and other factors that may cause SMIC's actual performance, financial condition or results of operations to be materially different from those suggested by the forward-looking statements including, among others, risks associated with cyclicality and market conditions in the semiconductor industry, intense competition in the semiconductor industry, SMIC's reliance on a small number of customers, timely wafer acceptance by SMIC's

- 3 -

customers, timely introduction of new technologies, SMIC's ability to ramp new products into volume, supply and demand for semiconductor foundry services, industry overcapacity, shortages in equipment, components and raw materials, availability of manufacturing capacity, financial stability in end markets, orders or judgments from pending litigation, intensive intellectual property litigation in the semiconductor industry, general economic conditions and fluctuations in currency exchange rates.

In addition to the information contained in this release, you should also consider the information contained in our other filings with Hong Kong Stock Exchange Limited ("SEHK") and Shanghai Stock Exchange ("SSE") from time to time. Other unknown or unpredictable factors also could have material adverse effects on our future results, performance or achievements. In light of these risks, uncertainties, assumptions and factors, the forward-looking events discussed in this release may not occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated or, if no date is stated, as of the date of this release. Except as required by applicable laws, SMIC undertakes no obligation and does not intend to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events after the date on which such statement is made or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or otherwise.

About Non-International Financial Reporting Standards ("non-IFRS") Financial Measures

To supplement SMIC's consolidated financial results presented in accordance with IFRS, SMIC uses in this release non-IFRS measures of operating results that are adjusted to exclude finance cost, depreciation and amortization, income tax benefits and expenses, the effect of employee bonus accrual, government funding, impairment loss of tangible and intangible assets, gain or loss on the disposal of machinery and equipment and gain from the disposal of living quarters. This earnings release also includes second quarter 2020 guidance for non-IFRS operating expenses. The presentation of non-IFRS financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS. This earnings release includes EBITDA, EBITDA margin and non-IFRS operating expenses which consist of total operating expenses as adjusted to exclude the effect of employee bonus accrual, government funding, impairment loss of tangible and intangible assets, gain or loss on the disposal of machinery and equipment and gain from the disposal of living quarters. These non-IFRS financial measures are not calculated or presented in accordance with, and are not alternatives or substitutes for financial measures prepared in accordance with IFRS, and should be read only in conjunction with the Group's financial measures prepared in accordance with IFRS. The Group's non-IFRS financial measures may be different from similarly-titlednon-IFRS financial measures used by other companies.

SMIC believes that use of these non-IFRS financial measures facilitates investors' and management's comparisons to SMIC's historical performance. The Group's management regularly uses these non- IFRS financial measures to understand, manage and evaluate the Group's business and make financial and operational decisions.

The accompanying table has more information and reconciliations of each non-IFRS financial measure to its most directly comparable IFRS financial measure. A reconciliation of non-IFRS guidance measures to corresponding IFRS measures is not available on a forward-looking basis because the effect of these adjustment items excluded for the purpose of non-IFRS operating expenses guidance are subject to some unpredictable conditions that cannot be estimated with reasonable certainty.

- 4 -

Summary of Second Quarter 2020 Operating Results

Amounts in US$ thousands, except for EPS and operating data

2Q20

1Q20

QoQ

2Q19

YoY

Revenue

938,463

904,912

3.7%

790,882

18.7%

Cost of sales

(689,874)

(671,327)

2.8%

(639,724)

7.8%

Gross profit

248,589

233,585

6.4%

151,158

64.5%

Operating expenses

(183,923)

(186,244)

-1.2%

(193,988)

-5.2%

Profit from operations

64,666

47,341

36.6%

(42,830)

-

Other income, net

76,999

18,317

320.4%

18,379

319.0%

Profit before tax

141,665

65,658

115.8%

(24,451)

-

Income tax expense

(16,029)

(14,340)

11.8%

(1,366)

1,073.4%

Profit for the period

125,636

51,318

144.8%

(25,817)

-

Other comprehensive income (loss):

Exchange differences on translating

(4,941)

1,919

-

(10,057)

-50.9%

foreign operations

Cash flow hedges

(14,577)

(13,858)

5.2%

(9,908)

47.1%

Actuarial gains and losses on defined

-

-

-

(775)

-

benefit plans

Total comprehensive income

106,118

39,379

169.5%

(46,557)

-

for the period

Profit (loss) for the period attributable to:

Owners of the Company

137,969

64,164

115.0%

18,539

644.2%

Non-controlling interests

(12,333)

(12,846)

-4.0%

(44,356)

-72.2%

Profit for the period

125,636

51,318

144.8%

(25,817)

-

Gross margin

26.5%

25.8%

19.1%

Earnings per ordinary share(1)

Basic

$0.03

$0.01

$0.00

Diluted

$0.02

$0.01

$0.00

Earnings per ADS(2)

Basic

$0.13

$0.06

$0.02

Diluted

$0.12

$0.06

$0.02

Wafers shipped (in 8" equivalent wafers)

1,435,591

1,406,714

2.1%

1,284,451

11.8%

Capacity utilization(3)

98.6%

98.5%

91.1%

Note:

  1. Based on weighted average ordinary shares of 5,337 million (basic) and 6,006 million (diluted) in 2Q20, 5,095 million (basic) and 5,968 million (diluted) in 1Q20, and 5,050 million (basic) and 5,064 million (diluted) in 2Q19.
  2. Each ADS represents 5 ordinary shares.
  3. Based on total equivalent wafers out divided by estimated total quarterly capacity.

- 5 -

  • Revenue was $938.5 million in 2Q20, an increase of 3.7% QoQ from $904.9 million in 1Q20. Revenue increased in 2Q20 mainly due to the increase of wafer shipment in 2Q20.
  • Cost of sales was $689.9 million in 2Q20, compared to $671.3 million in 1Q20. Cost of sales increased in 2Q20 mainly due to the increase in wafer shipment in 2Q20.
  • Gross profit was $248.6 million in 2Q20, an increase of 6.4% QoQ from $233.6 million in 1Q20. Gross profit increased in 2Q20 due to the increase in wafer shipment and the product-mix change in 2Q20.
  • Gross margin was 26.5% in 2Q20, compared to 25.8% in 1Q20.
  • Operating expenses were $183.9 million in 2Q20, a decrease of 1.2% QoQ from $186.2 million in 1Q20, mainly due to the reasons stated in Operating Expenses (Income)below.
  • Other income, net was $77.0 million gain in 2Q20, as compared to $18.3 million gain in 1Q20. The change was mainly due to the reasons stated in Other Income (Expense), Netbelow.

- 6 -

Analysis of Revenue

Revenue Analysis

By Application

2Q20

1Q20

2Q19

Computer

5.9%

5.1%

4.6%

Communications

46.9%

48.9%

48.9%

Consumer

36.9%

35.4%

31.1%

Auto/Industrial

4.3%

2.9%

6.7%

Others

6.0%

7.7%

8.7%

By Service Type

2Q20

1Q20

2Q19

Wafers

90.9%

91.1%

93.9%

Mask making, testing, others

9.1%

8.9%

6.1%

By Geography

2Q20

1Q20

2Q19

United States(1)

21.6%

25.5%

27.5%

Mainland China and Hong Kong

66.1%

61.6%

56.9%

Eurasia(2)

12.3%

12.9%

15.6%

Wafer Revenue Analysis

By Technology

2Q20

1Q20

2Q19

14/28 nm

9.1%

7.8%

3.8%

40/45 nm

15.4%

14.9%

19.2%

55/65 nm

30.0%

32.6%

26.2%

90 nm

2.8%

1.6%

1.7%

0.11/0.13 µm

5.4%

5.4%

6.5%

0.15/0.18 µm

33.0%

33.4%

38.6%

0.25/0.35 µm

4.3%

4.3%

4.0%

Note:

  1. Presenting the revenue to those companies whose headquarters are in the United States, but ultimately selling and shipping the products to their global customers.
  2. Excluding Mainland China and Hong Kong.

- 7 -

Capacity(1)

Fab

2Q20

1Q20

Shanghai 200mm fab

115,000

115,000

Shanghai 300mm fab

3,150

4,500

Beijing 300mm fab

117,000

117,000

Tianjin 200mm fab

73,000

63,000

Shenzhen 200mm fab

46,000

55,000

Majority-owned Beijing 300mm fab

112,500

112,500

Majority-owned Shanghai 300mm fab

13,500

9,000

Total monthly wafer fabrication capacity

480,150

476,000

Note:

  1. Wafers per month at the end of the period in 8" equivalent wafers, calculated on a 30-day basis for comparison purposes.
  • Monthly capacity was 480,150 8-inch equivalent wafers in 2Q20 from 476,000 8-inch equivalent wafers in 1Q20, primarily due to the net impact of capacity expansion in the majority-owned Shanghai 300mm fab and the adjustment of production plan in 2Q20.

Shipment and Utilization

8" equivalent wafers

2Q20

1Q20

QoQ

2Q19

YoY

Wafer shipments

1,435,591

1,406,714

2.1%

1,284,451

11.8%

Utilization rate(1)

98.6%

98.5%

-

91.1%

-

Note:

(1) Based on total equivalent wafers out divided by estimated total quarterly capacity.

Detailed Financial Analysis

Gross Profit

Amounts in US$ thousands

2Q20

1Q20

QoQ

2Q19

YoY

Cost of sales

689,874

671,327

2.8%

639,724

7.8%

Depreciation and amortization

210,976

213,832

-1.3%

185,397

13.8%

Other manufacturing costs

477,686

457,382

4.4%

453,851

5.3%

Share-based compensation

1,212

113

972.6%

476

154.6%

Gross profit

248,589

233,585

6.4%

151,158

64.5%

Gross margin

26.5%

25.8%

-

19.1%

-

  • Cost of sales was $689.9 million in 2Q20, an increase of 2.8% QoQ from $671.3 million in 1Q20, mainly due to the increase in wafer shipment in 2Q20.

- 8 -

Operating Expenses (Income)

Amounts in US$ thousands

2Q20

1Q20

QoQ

2Q19

YoY

Operating expenses

183,923

186,244

-1.2%

193,988

-5.2%

Research and development

157,999

166,486

-5.1%

182,207

-13.3%

General and administrative

59,381

74,231

-20.0%

64,578

-8.0%

Selling and marketing

5,072

5,841

-13.2%

8,852

-42.7%

Net impairment losses recognized

1,924

(1,102)

-

627

206.9%

(reversal) on financial assets

Other operating income

(40,453)

(59,212)

-31.7%

(62,276)

-35.0%

  • Research and development decreased to $158.0 million in 2Q20, compared to $166.5 million in 1Q20. The change was mainly due to the decrease in R&D activities in 2Q20.
  • General and administrative expenses decreased by 20% to $59.4 million in 2Q20, compared to $74.2 million in 1Q20. The change was mainly due to our majority-owned fab in Shanghai entered into mass production in June 2020 and as a result, the pre-operating related expenses decreased.
  • The change in other operating income was mainly due to other operating income recognized in relation to government funding of $40.5 million in 2Q20, compared to $59.2 million in 1Q20.

Other Income (Expense), Net

Amounts in US$ thousands

2Q20

1Q20

QoQ

2Q19

YoY

Other income, net

76,999

18,317

320.4%

18,379

319.0%

Interest income

36,069

33,923

6.3%

36,612

-1.5%

Finance costs

(18,220)

(18,158)

0.3%

(16,646)

9.5%

Foreign exchange gains (losses)

1,890

1,866

1.3%

(5,487)

-

Other gains, net

27,789

2,553

988.5%

4,090

579.4%

Share of gain (loss) of investment

29,471

(1,867)

-

(190)

-

accounted for using equity method

  • The increase in other gains, net in 2Q20 was mainly caused by the increase in the gain on the fair value change of the investments in equity securities recognized as financial assets at fair value through profit or loss.
  • The change in share of gain of investment accounted for using equity method was due to the gain on the investments in associates in 2Q20. Certain associates of the Group are investment funds with a number of portfolio investments, fair value change of which resulted in the change in share of gain of investment accounted for using equity method in 2Q20.

- 9 -

Depreciation and Amortization

Amounts in US$ thousands

2Q20

1Q20

QoQ

2Q19

YoY

Depreciation and amortization

305,734

289,838

5.5%

284,364

7.5%

Liquidity

Amounts in US$ thousands

2Q20

1Q20

Inventories

669,202

616,688

Prepayment and prepaid operating

53,310

79,509

expenses

Trade and other receivables

1,448,234

1,001,303

Financial assets at amortized cost

3,272,024

3,619,729

Derivative financial instruments

8,248

18,018

Restricted cash

595,064

721,977

Cash and cash equivalent

3,130,068

1,663,808

Assets classified as held-for-sale

7,213

7,214

Total current assets

9,183,363

7,728,246

Trade and other payables

1,782,387

1,179,376

Contract liabilities

88,414

194,812

Borrowings

1,053,686

916,346

Lease liabilities

94,418

93,476

Convertible bonds

65,000

605,994

Short-term notes

211,840

496,827

Deferred government funding

312,441

313,446

Accrued liabilities

154,325

127,832

Derivative financial instruments

26,767

19,611

Other financial liabilities

11,581

11,640

Current tax liabilities

12,508

14,609

Other liabilities

23,002

17,946

Total current liabilities

3,836,369

3,991,915

Cash ratio(1)

0.8x

0.4x

Quick ratio(2)

2.2x

1.8x

Current ratio(3)

2.4x

1.9x

Note:

  1. Cash and cash equivalent divided by total current liabilities.
  2. Current assets excluding inventories divided by total current liabilities.
  3. Total current assets divided by total current liabilities.

- 10 -

Capital Structure

Amounts in US$ thousands

2Q20

1Q20

Cash and cash equivalent

3,130,068

1,663,808

Financial assets at amortized cost(1)

3,272,024

3,619,729

Total current financial assets, cash

6,402,092

5,283,537

and cash equivalent

Borrowings - Current

1,053,686

916,346

Borrowings - Non-current

1,690,928

1,829,925

Lease liabilities

292,268

314,639

Short-term notes

211,840

496,827

Medium-term notes

211,313

212,317

Convertible bonds

65,000

605,994

Bonds payable

596,457

596,625

Total debt

4,121,660

4,972,505

Net debt(2)

(2,280,432)

(311,032)

Equity

13,177,675

10,273,117

Total debt to equity ratio(3)

31.3%

48.4%

Net debt to equity ratio(4)

-17.3%

-3.0%

Note:

  1. Mainly contain bank deposits over 3 months.
  2. Total debt minus total current financial assets, cash and cash equivalent.
  3. Total debt divided by equity.
  4. Net debt divided by equity.

Cash Flow

Amounts in US$ thousands

2Q20

1Q20

Net cash from operating activities

147,719

259,829

Net cash used in investing activities

(247,602)

(1,816,977)

Net cash from financing activities

1,577,785

991,448

Effect of exchange rate changes

(11,642)

(9,332)

Net change in cash and cash equivalent

1,466,260

(575,032)

Capex Summary

Capital expenditures were $1,342.5 million in 2Q20, compared to $777.2 million in 1Q20.

The planned 2020 capital expenditures increase from approximately $4.3 billion to $6.7 billion. The incremental capital expenditures are mainly for the capacity expansion in equipment and machinery.

- 11 -

Recent Highlights and Announcements

  • Inside Information Entering Into of Cooperation Framework Agreement (2020-7-31)
  • 2019 Corporate Social Responsibility Report (2020-7-22)
  • Compensation Committee Charter (2020-7-15)
  • Nomination Committee Charter (2020-7-15)
  • Audit Committee Charter (2020-7-15)
  • Amended and Restated Memorandum and Articles of Association (2020-7-15)
  • SMIC's Announcement on Listing Shares in Initial Public Offering on Science and Technology Innovation Board (2020-7-15)
  • Inside Information Completion of RMB Share Issue (2020-7-15)
  • Notification of Board Meeting (2020-7-13)
  • SMIC's Prospectus on Initial Public Offering of Shares and Listing on the Science and Technology Innovation Board (2020-7-13)
  • SMIC's Announcement on Issuance Result of Initial Public Offering of Shares and Listing on Science and Technology Innovation Board (2020-7-13)
  • SMIC's Announcement on Preliminary Offline Allotment Result and Online Lot-Winning Result of Initial Public Offering of Shares and Listing on Science and Technology Innovation Board (2020- 7-9)
  • SMIC's Announcement on Subscription and Lot-Winning Rate of Online Issuance for Initial Public Offering of Shares and Listing on Science and Technology Innovation Board (2020-7-8)
  • SMIC's Special Announcement on Investment Risks in Initial Public Offering of Shares and Listing on Science and Technology Innovation Board (2020-7-6)
  • SMIC's Announcement on Issuance for Initial Public Offering of Shares and Listing on Science and Technology Innovation Board (2020-7-6)
  • Inside Information Determination of Offer Size and Offer Price for Proposed RMB Share Issue under Specific Mandate and Progress of Subscriptions by Connected Persons as Strategic Investors under Proposed RMB Share Issue (2020-7-6)
  • SMIC's Announcement on Online Road Show for Initial Public Offering of Shares and Listing on Science and Technology Innovation Board (2020-7-3)
  • SMIC's Announcement on Issuance Arrangement and Preliminary Price Inquiry for Initial Public Offering of Shares and Listing on Science and Technology Innovation Board (2020-6-30)
  • SMIC's Prospectus on Initial Public Offering of RMB Ordinary Shares (A Shares) and Listing on the Science and Technology Innovation Board (2020-6-30)
  • Inside Information Preliminary Price Consultation Period of Proposed RMB Share Issue under Specific Mandate and Summary of Principal Provisions of Prospectus (2020-6-30)
  • Announcement on Completion of Registration of Proposed RMB Share Issue under Specific Mandate with the CSRC (2020-6-29)
  • Poll Results of the 2020 Fourth Extraordinary General Meeting held on 23 June 2020 (2020-6-23)
  • Poll Results of the 2020 Third Extraordinary General Meeting held on 23 June 2020 (2020-6-23)
  • Poll Results of the Annual General Meeting held on 23 June 2020 (2020-6-23)
  • SMIC's Prospectus on Initial Public Offering of RMB Ordinary Shares (A Shares) and Listing on the Science and Technology Innovation Board (Registration Draft) (2020-6-23)
  • Announcement on Approval of Proposed RMB Share Issue under Specific Mandate by the Listing Committee for the Sci-Tech Board (2020-6-19)
  • SMIC's Prospectus on Initial Public Offering of RMB Ordinary Shares (A Shares) and Listing on the Science and Technology Innovation Board (Meeting Draft) (2020-6-11)
  • Notification Letter and Request Form for Non-Registered Shareholders (2020-6-5)
  • Notification Letter for Registered Shareholders (2020-6-5)
  • Notice of 2020 Fourth Extraordinary General Meeting (2020-6-5)
  • Form of Proxy for use at the 2020 Fourth Extraordinary General Meeting to be held on 23 June 2020 (2020-6-5)
  • Connected Transactions Proposed Subscriptions by Connected Persons as Strategic Investors under the Proposed RMB Share Issue and Notice of the 2020 Fourth Extraordinary General Meeting (2020-6-5)
  • Notice of the 2020 Third Extraordinary General Meeting (2020-6-5)
  • Form of Proxy for use at the 2020 Third Extraordinary General Meeting to be held on 23 June 2020 (2020-6-5)
  • Circulars - (1) Discloseable and connected Transaction in relation to Proposed Capital Contribution and Deemed Disposal of Equity Interest in SMSC and (2) Notice of the 2020 Third Extraordinary General Meeting (2020-6-5)
  • Closure of Register of Members for Extraordinary General Meetings (2020-6-3)
    • 12 -
  • Clarification Announcement (2020-6-3)
  • Connected Transactions Proposed Subscriptions by Connected Persons as Strategic Investors under the Proposed RMB Share Issue (2020-6-3)
  • SMIC's Prospectus on Initial Public Offering of RMB Ordinary Shares (A Shares) and Listing on the Science and Technology Innovation Board (Application Draft) (2020-6-1)
  • Announcement on Acceptance by the SSE of the Application for Proposed RMB Share Issue under the Specific Mandate (2020-6-1)
  • Poll Results of Extraordinary General Meeting held on 1 June 2020 (2020-6-1)
  • Non-exerciseof pre-emptive rights by Datang and China IC fund and Potential Participation in the Proposed RMB Share Issue by Affiliates of Datang and China IC Fund (2020-5-31)
  • Circulars - (1) Grant of Share Options and (2) Non-Exempt Connected Transactions - Proposed Grant of Restricted Share Units to Directors (2020-5-26)
  • Grant of Options (2020-5-26)
  • Notification Letter and Request Form for Non-Registered Shareholders (2020-5-20)
  • Notification Letter for Registered Shareholders (2020-5-20)
  • Letter for Election of Means of Receipt and Language of Corporate Communication and Reply Form (2020-5-20)
  • Closure of Register of Members (2020-5-20)
  • Notice of Annual General Meeting (2020-5-20)
  • Form of Proxy for Use at the Annual General Meeting to be held on 23 June 2020 (2020-5-20)
  • Circulars - (1) Re-Election of Directors (2) Proposed General Mandate to Issue and Repurchase Shares and (3) Notice Of Annual General Meeting (2020-5-20)
  • Discloseable Transaction and Connected Transaction Proposed Capital Contribution and Deemed Disposal of Equity Interest In SMSC (2020-5-15)
  • SMIC Reports Unaudited Results for the three Months ended March 31, 2020 (2020-5-13)

Please visit SMIC's website at

http://www.smics.com/en/site/newsand http://www.smics.com/en/site/comapny_statutoryDocuments

for further details regarding the recent announcements.

- 13 -

Semiconductor Manufacturing International Corporation

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

(In US$ thousands except share data)

For the three months ended

June 30, 2020

March 31, 2020

(Unaudited)

(Unaudited)

Revenue

938,463

904,912

Cost of sales

(689,874)

(671,327)

Gross profit

248,589

233,585

Research and development expenses

(157,999)

(166,486)

General and administration expenses

(59,381)

(74,231)

Sales and marketing expenses

(5,072)

(5,841)

Net impairment losses (recognized) reversal on financial assets

(1,924)

1,102

Other operating income, net

40,453

59,212

Operating expenses

(183,923)

(186,244)

Profit from operations

64,666

47,341

Other income, net

76,999

18,317

Profit before tax

141,665

65,658

Income tax expense

(16,029)

(14,340)

Profit for the period

125,636

51,318

Other comprehensive income (loss):

Item that may be reclassified subsequently to profit or loss

Exchange differences on translating foreign operations

(4,941)

1,919

Cash flow hedges

(14,577)

(13,858)

Total comprehensive income for the period

106,118

39,379

Profit (loss) for the period attributable to:

Owners of the Company

137,969

64,164

Non-controlling interests

(12,333)

(12,846)

125,636

51,318

Total comprehensive income (loss) for the period

attributable to:

Owners of the Company

118,554

52,225

Non-controlling interests

(12,436)

(12,846)

106,118

39,379

Earnings per ordinary share

Basic

$0.03

$0.01

Diluted

$0.02

$0.01

Earnings per ADS

Basic

$0.13

$0.06

Diluted

$0.12

$0.06

Shares used in calculating basic earnings per share

5,337,141,635

5,095,402,229

Shares used in calculating diluted earnings per share

6,005,705,290

5,967,949,232

Reconciliations of Non-IFRS Financial Measures to

Comparable IFRS Measures

Non-IFRS operating expenses(1)

(215,011)

(238,509)

EBITDA(2)

465,619

373,654

EBITDA margin(2)

49.6%

41.3%

- 14 -

Semiconductor Manufacturing International Corporation

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

(In US$ thousands except share data)

Note:

  1. Non-IFRSoperating expenses are defined as operating expenses adjusted to exclude the effect of items listed in the following table. SMIC reviews non-IFRS operating expenses together with operating expenses to understand, manage and evaluate its business and make financial and operational decisions. The Group also believes it is useful supplemental information for investors and analysts to assess its operating performance. However, the use of non-IFRS financial measures has material limitations as an analytical tool. One of the limitations of using non- IFRS financial measures is that they do not include all items that impact our net profit for the period. In addition, because non-IFRS financial measures are not calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider the non-IFRS operating expenses in isolation from or as an alternative to operating expenses prepared in accordance with IFRS.
    The following table sets forth the reconciliation of the non-IFRS operating expenses to its most directly comparable financial measure presented in accordance with IFRS, for the periods indicated.

For the three months ended

June 30, 2020

March 31, 2020

June 30, 2019

(Unaudited)

(Unaudited)

(Unaudited)

Operating expenses

(183,923)

(186,244)

(193,988)

Employee bonus accrued

9,365

6,947

6,999

Government funding

(40,458)

(59,258)

(61,785)

Loss (gain) of the disposal of

110

(517)

48

machinery and equipment

(Gain) loss of the disposal of

(105)

563

(421)

living quarters

Non-IFRS operating expenses

(215,011)

(238,509)

(249,147)

- 15 -

Semiconductor Manufacturing International Corporation

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

(In US$ thousands except share data)

  1. EBITDA is defined as profit for the period excluding the impact of the finance cost, depreciation and amortization, and income tax benefit and expense. EBITDA margin is defined as EBITDA divided by revenue. SMIC uses EBITDA margin as a measure of operating performance; for planning purposes, including the preparation of the
    Group's annual operating budget; to allocate resources to enhance the financial performance of the Group's business; to evaluate the effectiveness of the Group's business strategies; and in communications with SMIC's board of directors concerning the Group's financial performance. Although EBITDA is widely used by investors to measure a company's operating performance without regard to items, such as net finance cost, income tax benefit and expense and depreciation and amortization that can vary substantially from company to company depending upon their respective financing structures and accounting policies, the book values of their assets, their capital structures and the methods by which their assets were acquired, EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of the Group's results of operations as reported under IFRS. Some of these limitations are: it does not reflect the Group's capital expenditures or future requirements for capital expenditures or other contractual commitments; it does not reflect changes in, or cash requirements for, the Group's working capital needs; it does not reflect finance cost; it does not reflect cash requirements for income taxes; that, although depreciation and amortization are non-cash charges, the assets being depreciated or amortized will often have to be replaced in the future, and these measures do not reflect any cash requirements for these replacements; and that other companies in SMIC's industry may calculate these measures differently than SMIC does, limiting their usefulness as comparative measures.
    The following table sets forth the reconciliation of EBITDA and EBITDA margin to their most directly comparable financial measures presented in accordance with IFRS, for the periods indicated.

For the three months ended

June 30, 2020

March 31, 2020

June 30, 2019

(Unaudited)

(Unaudited)

(Unaudited)

Profit for the period

125,636

51,318

(25,817)

Finance costs

18,220

18,158

16,646

Depreciation and amortization

305,734

289,838

284,364

Income tax expense

16,029

14,340

1,366

EBITDA

465,619

373,654

276,559

Profit margin

13.4%

5.7%

-3.3%

EBITDA margin

49.6%

41.3%

35.0%

- 16 -

Semiconductor Manufacturing International Corporation

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(In US$ thousands)

As of

June 30, 2020

March 31, 2020

(Unaudited)

(Unaudited)

ASSETS

Non-current assets

Property, plant and equipment

9,340,611

8,278,206

Right-of-use assets

425,701

444,349

Intangible assets

88,763

91,170

Investments in associates

1,132,823

1,138,235

Investments in joint ventures

57,886

26,497

Deferred tax assets

26,994

28,271

Financial assets at fair value through profit or loss

129,399

88,889

Other assets

2,638

11,007

Total non-current assets

11,204,815

10,106,624

Current assets

Inventories

669,202

616,688

Prepayment and prepaid operating expenses

53,310

79,509

Trade and other receivables

1,448,234

1,001,303

Financial assets at amortized cost

3,272,024

3,619,729

Derivative financial instruments

8,248

18,018

Restricted cash

595,064

721,977

Cash and cash equivalent

3,130,068

1,663,808

9,176,150

7,721,032

Assets classified as held-for-sale

7,213

7,214

Total current assets

9,183,363

7,728,246

TOTAL ASSETS

20,388,178

17,834,870

- 17 -

Semiconductor Manufacturing International Corporation

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(In US$ thousands)

As of

June 30, 2020

March 31, 2020

(Unaudited)

(Unaudited)

EQUITY AND LIABILITIES

Capital and reserves

Ordinary shares

$0.004 par value, 10,000,000,000 shares authorized,

22,763

20,513

5,690,665,932 and 5,128,155,272 shares outstanding at

June 30, 2020 and March 31, 2020, respectively

Share premium

5,898,540

5,116,553

Reserves

1,879

66,578

Retained earnings

747,639

614,669

Equity attributable to owners of the Company

6,670,821

5,818,313

Perpetual subordinated convertible securities

339,307

502,473

Non-controlling interests

6,167,547

3,952,331

Total equity

13,177,675

10,273,117

Non-current liabilities

Borrowings

1,690,928

1,829,925

Lease liabilities

197,850

221,163

Bonds payable

596,625

596,457

Medium-term notes

211,313

212,317

Deferred government funding

591,384

617,805

Derivative financial instruments

72,075

72,780

Other liabilities

13,959

19,391

Total non-current liabilities

3,374,134

3,569,838

Current liabilities

Trade and other payables

1,782,387

1,179,376

Contract liabilities

88,414

194,812

Borrowings

1,053,686

916,346

Lease liabilities

94,418

93,476

Convertible bonds

65,000

605,994

Short-term notes

211,840

496,827

Deferred government funding

312,441

313,446

Accrued liabilities

154,325

127,832

Derivative financial instruments

26,767

19,611

Other financial liabilities

11,581

11,640

Current tax liabilities

12,508

14,609

Other liabilities

23,002

17,946

Total current liabilities

3,836,369

3,991,915

Total liabilities

7,210,503

7,561,753

TOTAL EQUITY AND LIABILITIES

20,388,178

17,834,870

- 18 -

Semiconductor Manufacturing International Corporation

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(In US$ thousands)

For the three months ended

June 30, 2020

March 31, 2020

(Unaudited)

(Unaudited)

Cash flow from operating activities:

Profit for the period

125,636

51,318

Depreciation and amortization

305,734

289,838

Share of gain of investment accounted for using

(29,471)

1,867

equity method

Changes in working capital and others

(254,180)

(83,194)

Net cash from operating activities

147,719

259,829

Cash flow from investing activities:

Payments to acquire financial assets at fair value through

(14,123)

-

profit or loss

Proceeds from sale of financial assets at fair value through

1,698

44,062

profit or loss

Payments to acquire financial assets at amortized cost

(593,896)

(2,253,642)

Proceeds from maturity of financial assets at amortized cost

1,038,355

1,046,546

Payments for property, plant and equipment

(731,897)

(664,999)

Net proceeds after netting off land appreciation tax from disposal of

38

459

property, plant and equipment and assets classified as held-for-sale

Payments for intangible assets

(524)

(1,222)

Proceeds from release of restricted cash relating to investing

53,615

4,140

activities

Payments to acquire joint ventures and associates

(3,015)

(8,517)

Proceeds from disposal of joint ventures and associates

2,064

16,196

Distributions received from joint ventures and associates

83

-

Net cash used in investing activities

(247,602)

(1,816,977)

Cash flow from financing activities:

Proceeds from borrowings

123,768

395,672

Repayment of borrowings

(119,666)

(193,934)

Principal elements of lease payments

(19,153)

(28,117)

Proceeds from issuance of bonds

-

596,768

Proceeds from issuance of short-term notes

213,062

216,291

Repayment of short-term notes

(493,477)

-

Proceeds from exercise of employee stock options

3,320

4,768

Proceeds from non-controlling interests - capital contribution

1,874,931

-

Distribution paid to perpetual subordinated convertible securities

(5,000)

-

holders

Net cash from financing activities

1,577,785

991,448

Effects of exchange rate changes on the balance of cash held in

(11,642)

(9,332)

foreign currencies

Net increase (decrease) in cash and cash equivalent

1,466,260

(575,032)

Cash and cash equivalent, beginning of period

1,663,808

2,238,840

Cash and cash equivalent, end of period

3,130,068

1,663,808

- 19 -

By order of the Board

Semiconductor Manufacturing International Corporation

Dr. Gao Yonggang

Executive Director, Chief Financial Officer and Joint Company Secretary

Shanghai, August 6, 2020

As at the date of this announcement, the directors of the Company are:

Executive Directors

ZHOU Zixue (Chairman)

ZHAO Haijun (Co-Chief Executive Officer)

LIANG Mong Song (Co-Chief Executive Officer)

GAO Yonggang (Chief Financial Officer and Joint Company Secretary)

Non-executive Directors

CHEN Shanzhi

ZHOU Jie

REN Kai

LU Jun

TONG Guohua

Independent Non-executive Directors

William Tudor BROWN

CONG Jingsheng Jason

LAU Lawrence Juen-Yee

FAN Ren Da Anthony

YOUNG Kwang Leei

- 20 -

Disclaimer

SMIC - Semiconductor Manufacturing International Corporation published this content on 06 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 August 2020 08:48:16 UTC


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Financials (USD)
Sales 2021 4 928 M - -
Net income 2021 741 M - -
Net cash 2021 2 732 M - -
P/E ratio 2021 37,0x
Yield 2021 -
Capitalization 27 286 M 27 285 M -
EV / Sales 2021 4,98x
EV / Sales 2022 4,77x
Nbr of Employees 17 354
Free-Float 83,1%
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Semiconductor Manufacturing International Corporation Technical Analysis Chart | 981 | KYG8020E1199 | MarketScreener
Technical analysis trends SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION
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TrendsBullishNeutralNeutral
Income Statement Evolution
Consensus
Sell
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Mean consensus HOLD
Number of Analysts 24
Last Close Price 3,45 $
Average target price 3,19 $
Spread / Average Target -7,52%
EPS Revisions
Managers and Directors
Hai Jun Zhao Co-Chief Executive Officer & Executive Director
Meng Song Liang Co-Chief Executive Officer & Executive Director
Yong Gang Gao CFO, Secretary, Executive Director & EVP
Zi Xue Zhou Chairman
Mei Sheng Zhou Executive VP-Technology Research & Development
Sector and Competitors