SMIC (SMIC) released its unaudited Q2 2025 financial results on the Hong Kong Stock Exchange. Revenue for Q2 2025 reached US$2.209 billion, a 16.2% year-on-year increase and a 1.7% quarter-on-quarter decrease, exceeding guidance (a 4-6% quarter-on-quarter decline). Gross profit margin reached 20.4%, a 6.5% year-on-year increase and a 2.1% quarter-on-quarter decrease, slightly exceeding guidance (18-20%). China Merchants Securities' electronics team believes that the company's products will continue to be in short supply in Q3 2025, and visibility for Q4 2025 may be reduced. 1) Guidance: Q3 2025 revenue is expected to increase by 5-7% quarter-on-quarter, with both shipments and ASP expected to increase quarter-on-quarter. Gross profit margin is expected to be roughly flat quarter-on-quarter at 18-20%, primarily due to increased output offsetting the impact of increased depreciation. 2) Industry sentiment: Customers pre-ordered and built inventory in the first three quarters, demonstrating strong confidence, and the company's products continued to be in short supply. The pace of rush orders and pre-shipments is expected to slow in Q4, weakening order and performance visibility, but this is not expected to have a significant impact on capacity utilization.