Opinions on$SMIC(00981.HK) recent price performance:

The recent stock price increase was mainly driven by policy support and the overall rise of Chinese assets, with market expectations significantly improving after the 926 meeting. During this period, the company's stock performance has been relatively better than the overall market. Dolphin Research believes the main reasons are:

1) Low valuation: Before this round of increase, the company's Hong Kong-listed shares had a relatively low PB ratio, making it a semiconductor company trading below book value;

2) Earnings guarantee: The company's operations began to improve in Q3, with both revenue and gross margin expected to rise significantly;

3) Future policy expectations: The market anticipates that future policies will continue to focus on "high-quality development" and support the semiconductor technology industry.

Under the combined influence of these three factors, SMIC has shown strong outperformance recently. After this round of increase, the focus will shift to whether future policies and the company's earnings can exceed expectations.