On 29 June 2009, Semiconductor Manufacturing International Corporation (SMIC) revised upwards its sales guidance for 2Q 09, reflecting strong growth in customer orders due to robust demand from the Chinese market. The company's revised guidance is higher than our previous expectations, and we plan to revise our estimates and target price in line with Management's current guidance. With the increase in revenue guidance for the current quarter and growth in demand from the Chinese market, we upgrade the ADR from a SELL to a HOLD although the stock does not support a HOLD at current price levels. Based on our fundamental outlook we upgrade the Hong Kong stock from a SELL to a HOLD although the stock does not support a HOLD at current price levels. The Hong Kong dollar is pegged to the US dollar; therefore, we assume a neutral currency impact.

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