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.

Semiconductor Manufacturing International Corp. trades at about 128 times forward earnings for its mainland-listed shares, while peer Hua Hong Semiconductor Ltd. trades at 181 times. In comparison, both US-chipmaker Intel Corp. and South Korea’s Hanmi Semiconductor Co. trade at the lower end of 90 times.