Investment Rating - The report maintains a "Buy" rating for the company [4][7]. Core Views - The demand outlook remains positive, with capacity expansion driving future growth [2][12]. - The company is expected to achieve revenue growth, with projected revenues of $2.419 billion in 2025, $2.949 billion in 2026, and $3.390 billion in 2027, reflecting year-on-year growth rates of 21%, 22%, and 15% respectively [6][12]. - The company is actively expanding its production capacity, with the monthly capacity increasing from 391 thousand wafers in Q4 2024 to 447 thousand wafers in Q2 2025 [12]. Financial Forecasts and Investment Recommendations - The forecast for the company's net asset per share for 2025-2027 is $3.66, $3.75, and $3.87 respectively, with a target price of HKD 79.63 based on a comparable company average PB of 2.8 times for 2025 [4][13]. - The company reported a revenue of $566 million in Q2 2025, a year-on-year increase of 18% and a quarter-on-quarter increase of 5% [12]. - The gross margin for Q2 2025 was 10.9%, exceeding the company's guidance of 7%-9% [12].

Group 1 - The company is planning to acquire a controlling stake in Shanghai Huali Microelectronics Co., Ltd. through a combination of issuing shares and cash payment to resolve competition issues related to its IPO commitments [1] - The acquisition targets assets related to the 65/55nm and 40nm processes that are in competition with the company's existing operations [1] - The transaction is expected not to constitute a major asset restructuring and will be classified as a related party transaction without changing the actual controller of the company [1] Group 2 - The company's stock will be suspended from trading starting August 18, 2025, for a period not exceeding 10 trading days due to the uncertainties surrounding the transaction [2] - As of the announcement date, the transaction is still in the planning stage, and no formal agreements have been signed yet [2] - The transaction requires approval from the company's board, shareholders, and regulatory authorities before it can be officially implemented [2]

Group 1 - The core point of the announcement is that Huahong Semiconductor is planning to acquire a controlling stake in Shanghai Huali Microelectronics to resolve competition issues related to its IPO commitments [1][2] - The acquisition involves the purchase of equity corresponding to the assets of Huahong's fifth factory, which competes in the 65/55nm and 40nm segments [1] - The transaction is expected to be classified as a related party transaction but will not result in a change of the company's actual controller or constitute a restructuring listing [1] Group 2 - The company's stock will be suspended from trading starting August 18, 2025, for a period not exceeding 10 trading days due to the uncertainties surrounding the transaction [2] - As of the announcement date, the transaction is still in the planning stage, and no formal agreements have been signed yet [2] - The transaction requires approval from the company's board, shareholders, and regulatory authorities before it can be officially implemented [2]

Investment Rating - The report maintains a "Recommendation" rating for the industry, indicating a positive outlook for the sector's fundamentals and expected performance relative to the benchmark index [2][16]. Core Insights - The domestic AI computing chip market is projected to reach nearly $50 billion, with a significant push towards localization and self-sufficiency in chip production, driven by both supply constraints and increasing domestic demand [6][10]. - The semiconductor industry is experiencing robust growth, particularly in segments related to AI chips, with notable performance from domestic companies such as Cambricon, Haiguang Information, and Xinyuan Semiconductor [6][10]. - The report emphasizes the importance of the entire computing power supply chain, including GPU/ASIC, networking chips, storage, and EDA, highlighting the potential for significant investment opportunities in these areas [10][11]. Industry Overview - The semiconductor industry index has seen a substantial increase of 20.6% since early August 2025, outperforming the broader market indices [6]. - The domestic semiconductor market is characterized by a high concentration of market share among a few key players, particularly in the Ethernet switch and PCIe switch segments, indicating a strong oligopolistic structure [6][7]. - The report identifies a growing trend towards the localization of semiconductor manufacturing, with domestic companies increasingly filling gaps left by foreign suppliers [10][11]. Market Segmentation - **GPU/ASIC**: Key players include Haiguang Information, Cambricon, and Xinyuan Semiconductor, which are positioned to benefit from the increasing demand for domestic AI chips [11]. - **Networking Chips**: Companies such as ZTE, Shengke Communication, and Lianqi Semiconductor are highlighted for their roles in the growing networking chip market [11]. - **Storage**: Domestic storage manufacturers are actively expanding their product lines, with companies like Jiangbolong and Demingli making significant strides in enterprise-level storage solutions [10][11]. - **EDA/IP**: The report notes that domestic EDA companies like Huada Jiutian are crucial for supporting the development of advanced semiconductor processes [10][11]. Investment Recommendations - The report suggests focusing on companies within the computing power supply chain, particularly those involved in GPU/ASIC, networking chips, storage, and EDA, as they are expected to benefit from the ongoing shift towards domestic chip production [10][11]. - Specific companies to watch include: - **GPU/ASIC**: Haiguang Information, Cambricon, Xinyuan Semiconductor [11] - **Networking Chips**: ZTE, Shengke Communication, Lianqi Semiconductor [11] - **Storage**: Jiangbolong, Demingli [11] - **EDA/IP**: Huada Jiutian, Gai Lun Electronics [11]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 HUA HONG SEMICONDUCTOR LIMITED 華虹半導體有限公司 （於香港註冊成立之有限公司） （股份代號：01347） 海外監管公告 本公告乃根據《香港聯合交易所有限公司證券上市規則》第13.10B條而作出。 執行董事： 茲載列華虹半導體有限公司（「本公司」）於上海證券交易所網站刊發的《關於籌劃 發行股份及支付現金購買資產並募集配套資金暨關聯交易事項的停牌進展公告》， 僅供參閱。 承董事會命 華虹半導體有限公司 董事會主席兼執行董事 唐均君先生 中國上海，二零二五年八月二十四日 於本公告日期，本公司董事分別為： 华虹半导体有限公司 关于筹划发行股份及支付现金购买资产并募集配套资 金暨关联交易事项的停牌进展公告 本公司董事会及全体董事保证本公告内容不存在任何虚假记载、误导性陈述 或者重大遗漏，并对其内容的真实性、准确性和完整性依法承担法律责任。 唐均君 （董事會主席） 白鵬 （總裁） 非 ...

| A | 股代码：688347 | A | 股简称：华虹公司 | 公告编号：2025-020 | | --- | --- | --- | --- | --- | | 港股代码：01347 | | | 港股简称：华虹半导体 | | 华虹半导体有限公司 关于筹划发行股份及支付现金购买资产并募集配套资 金暨关联交易事项的停牌进展公告 本公司董事会及全体董事保证本公告内容不存在任何虚假记载、误导性陈述 或者重大遗漏，并对其内容的真实性、准确性和完整性依法承担法律责任。 1/2 【 】 【 】 关各方正在就本次交易方案进行沟通、协商和确定。鉴于上述事项尚存在不确定 性，根据上海证券交易所的相关规定，公司 A 股股票将继续停牌。 截至本公告披露日，本次交易正处于筹划阶段，交易各方尚未签署正式的交 易协议，具体交易方案仍在商讨论证中，尚存在不确定性。本次交易尚需提交公 司董事会、股东大会审议，并经监管机构批准后方可正式实施，最终能否通过审 批尚存在不确定性。 公司将根据本次交易的进展情况，严格按照有关法律法规的规定和要求履行 信息披露义务。待相关重大事项确定后，公司将及时发布相关公告并申请公司股 票复牌。敬请广大投资者关 ...

Group 1 - The company, CITIC Prudential Fund Management Co., Ltd., will adopt the "index yield method" for valuing the suspended stock "Huahong Company" (stock code: 688347) starting from August 22, 2025 [1] - The valuation method will revert to using the closing price on the day of trading once the stock resumes trading and exhibits active market trading characteristics [1] - Investors can obtain further details by visiting the company's website or calling their customer service [1]

Core Viewpoint - The semiconductor market is experiencing a significant merger event as Huahong Semiconductor plans to acquire controlling stakes in Shanghai Huahong Microelectronics to resolve industry competition issues related to its IPO commitments [2][3]. Group 1: Acquisition Details - Huahong Semiconductor is planning to acquire the equity of Huahong Micro's Wafer Fab 5 through a combination of issuing shares and cash payments, while also raising funds to support this acquisition [2]. - The acquisition specifically targets Wafer Fab 5 and does not include the advanced process Wafer Fab 6, leading to investor concerns that the transaction may fall short of expectations and potentially violate IPO commitments [2][7]. - The acquisition is part of Huahong Semiconductor's commitment made during its IPO to eliminate competition within the same industry, as stated in a supplementary commitment letter issued at the time of its listing [3][4]. Group 2: Market Reactions and Concerns - Following the announcement of the acquisition, Huahong Semiconductor's H-shares experienced a decline of 7.37% from August 18 to 21, attributed to concerns over share dilution and uncertainties surrounding the acquisition [2]. - Analysts noted that the issuance of shares for the acquisition could dilute existing shareholders' equity, leading to fears of short-term pressure on earnings per share [3]. Group 3: Implications of Industry Competition - The acquisition is expected to address the overlapping business operations between Huahong Semiconductor and Huahong Micro, particularly in the 65/55nm and 40nm process nodes, thereby enhancing governance clarity and operational independence [6]. - Industry experts highlighted that resolving competition issues could improve resource allocation efficiency and mitigate risks associated with internal competition, which can dilute profits and cash flow [5][6]. Group 4: Strategic Benefits - The acquisition is seen as a strategic move to enhance Huahong Semiconductor's production capacity and market competitiveness, particularly in the 12-inch wafer segment, which is crucial for the company's growth [10][12]. - The integration of Wafer Fab 5 is expected to accelerate Huahong Semiconductor's ability to convert production capacity into revenue and strengthen its position in the domestic mature process market [12]. - The transaction aligns with the company's strategy to transition towards 12-inch wafer production, which is anticipated to significantly increase revenue potential, with estimates suggesting an annual revenue increase of over $500 million if Wafer Fab 5 reaches full production capacity [11][12].

Group 1 - The Hang Seng Index rose by 0.93% on August 22, with southbound trading totaling HKD 159.704 billion, including HKD 82.435 billion in buying and HKD 77.269 billion in selling, resulting in a net buying amount of HKD 5.166 billion [1] - The southbound trading through the Shenzhen Stock Connect had a total trading amount of HKD 59.793 billion, with net buying of HKD 4.574 billion, while the Shanghai Stock Connect had a total trading amount of HKD 99.911 billion, with net buying of HKD 0.591 billion [1] - The most actively traded stock by southbound funds was SMIC, with a total trading amount of HKD 135.57 billion, followed by Tencent Holdings and Hua Hong Semiconductor with trading amounts of HKD 67.43 billion and HKD 55.11 billion respectively [1] Group 2 - Among the stocks with net buying, Kuaishou-W had the highest net buying amount of HKD 11.73 billion, with a closing price increase of 4.39%, followed by SMIC with a net buying amount of HKD 10.93 billion and Meituan-W with HKD 10.09 billion [1][2] - Xpeng Motors-W had the highest net selling amount of HKD 13.09 billion, despite a closing price increase of 13.60%, while Xiaomi Group-W and Hua Hong Semiconductor had net selling amounts of HKD 9.03 billion and HKD 7.50 billion respectively [1][2] - Tencent Holdings recorded a continuous net buying for 6 days, with a total net buying amount of HKD 60.33 billion during this period [2]

Market Overview - On August 22, the Hang Seng Index rose by 0.93%, closing at 25,339.14 points, with a total net inflow of HKD 5.166 billion through the southbound trading channel [1] - The total trading volume for the southbound trading was HKD 159.704 billion, with a net buy of HKD 5.166 billion [1] Trading Activity - In the Shanghai-Hong Kong Stock Connect, the trading volume was HKD 99.911 billion with a net buy of HKD 0.591 billion, while in the Shenzhen-Hong Kong Stock Connect, the trading volume was HKD 59.793 billion with a net buy of HKD 4.574 billion [1] - The most actively traded stock in the Shanghai-Hong Kong Stock Connect was SMIC, with a trading volume of HKD 8.649 billion, followed by Tencent Holdings and Alibaba-W, with trading volumes of HKD 4.385 billion and HKD 3.437 billion, respectively [1] Stock Performance - In terms of net buy amounts, Meituan-W had the highest net buy of HKD 0.613 billion, closing with a price increase of 1.11% [1] - Xiaomi Group-W experienced the highest net sell amount of HKD 0.751 billion, closing with a price increase of 2.34% [1] - In the Shenzhen-Hong Kong Stock Connect, SMIC led with a net buy of HKD 0.879 billion, closing with a price increase of 10.06% [2] - Xiaopeng Motors-W had the highest net sell amount of HKD 0.848 billion, closing with a price increase of 13.60% [2] Active Stocks Summary - The top active stocks in the southbound trading included: - SMIC: Trading volume of HKD 49.08 billion, net buy of HKD 0.879 billion, and a daily increase of 10.06% [2] - Tencent Holdings: Trading volume of HKD 23.58 billion, net sell of HKD 0.084 billion, and a daily increase of 1.18% [2] - Huahong Semiconductor: Trading volume of HKD 21.97 billion, net sell of HKD 0.061 billion, and a daily increase of 17.85% [2]