Chinese Chipmakers’ Lofty Valuations Prompt Investor Caution

A recent surge in Chinese chip stocks has made them some of the most expensive among global peers, and investors are growing increasingly cautious.

Shares of Semiconductor Manufacturing International Corp. listed on the mainland trade at more than 120 times forward earnings, while peer Hua Hong Semiconductor Ltd.’s trade at over 150 times. In comparison, both US-chipmaker Intel Corp. and South Korea’s Hanmi Semiconductor Co. trade near 95 times.