Investment Rating - The report assigns an "Overweight" rating to the company, indicating a positive outlook on its stock performance [4] Core Views - The company's Q3 2024 performance met expectations, with revenue of $526 million (YoY -7.4%, QoQ +10.0%), gross margin of 12.2% (YoY -3.9pcts, QoQ +1.7pcts), and net profit of $44.82 million (YoY +222.6%, QoQ +571.6%) [1] - The company's 12-inch production line is nearing full capacity, with a utilization rate of 98.5% and revenue of $263 million (YoY -2.5%, QoQ +12.9%) [2] - The new 12-inch production line is expected to start trial production in December 2024, with an estimated total investment of $6.7 billion, averaging $2-2.5 billion annually from 2024 to 2026 [2] - The company's revenue guidance for Q4 2024 is $530-540 million, with a gross margin range of 11%-13% [1] Financial Performance - The company's revenue for 2024E is projected to be $1.996 billion (YoY -13%), with a gross margin of 11.2% and net profit of $103 million (YoY -63%) [3] - Revenue is expected to grow to $2.251 billion in 2025E (YoY +13%) and $2.728 billion in 2026E (YoY +21%), with net profit increasing to $157 million and $237 million, respectively [3] - The company's EPS is forecasted to be $0.07 in 2024E, $0.11 in 2025E, and $0.16 in 2026E [3] Market and Industry Insights - The company's 8-inch production line has a utilization rate of 113%, generating revenue of $263 million (YoY -11.9%, QoQ +7.2%) [2] - The demand for CIS and power management chips is increasing, with revenue from analog and power management reaching $123 million (YoY +21.8%, QoQ +21.6%) [4] - The company's IGBT and super-junction products are facing pricing and demand pressures, with revenue from discrete devices at $163 million (YoY -30.8%, QoQ +7.2%) [4] Future Outlook - The company's new 12-inch production line is expected to drive revenue growth in the medium to long term, despite short-term depreciation cost pressures [2] - The company is well-positioned to benefit from the growth in AI and new energy vehicles, which are expected to boost demand for power management chips and other products [4]

Investment Rating - The investment rating for Hua Hong Semiconductor is maintained as "Buy" with a target price of HKD 29.40 [3][6]. Core Insights - Hua Hong Semiconductor reported Q3 revenue of USD 526 million, a 10.0% increase quarter-on-quarter, and a gross margin of 12.2%, exceeding previous guidance [3][13]. - The company expects Q4 revenue to grow by 1.7% quarter-on-quarter, with a gross margin forecasted to remain stable between 11% and 13% [3][5]. - ASP (Average Selling Price) has stabilized after six consecutive quarters of decline, with Q3 ASP increasing by 1.2% to USD 415 [4][17]. Revenue and Profitability - Q3 revenue was USD 526 million, a decrease of 7.4% year-on-year but an increase of 10.0% quarter-on-quarter, surpassing the company's prior guidance [13][17]. - The gross margin for Q3 was 12.2%, which is a 1.7 percentage point increase from the previous quarter, driven by improved capacity utilization [3][17]. - The company anticipates Q4 revenue to be in the range of USD 530-540 million, with a gross margin of 11%-13% [18]. Capacity Utilization and ASP - The capacity utilization for 8-inch and 12-inch wafers improved to 113.0% and 98.5%, respectively, in Q3 [4][17]. - The ASP for Q3 was USD 415, reflecting a recovery after a prolonged decline [4][17]. Future Outlook - For Q4, Hua Hong expects overall market growth to slow, with specific pressure on the automotive and industrial sectors [5][18]. - The company is set to commence operations at its Wuxi Phase II facility in December, which is expected to gradually ramp up production capacity [5][19]. - The forecast for 2024 includes a slight revenue increase driven by modest price increases, with expectations for ASP to recover gradually [18][19]. Financial Projections - Revenue projections for 2024, 2025, and 2026 have been adjusted to USD 1.996 billion, USD 2.030 billion, and USD 2.296 billion, respectively [6][15]. - Net profit forecasts for the same years are adjusted to USD 0.893 billion, USD 0.713 billion, and USD 0.520 billion, respectively [6][15].

证券研究报告 | 2024年11月11日 华虹半导体（01347.HK） 优于大市 3Q24 业绩略超指引，产能利用率持续提升 3Q24 毛利率与收入略超指引，4Q24 收入预计环比增长。公司发布未经审核 业绩：3Q24 实现销售收入 5.263 亿美元(YoY -7.4%，QoQ +10.0%)，略超指 引（5.0-5.2 亿美元），毛利率为 12.2%(YoY -3.9pct，QoQ +1.7pct)，略 超指引(10%-12%)，营收、毛利率与产能利用率均实现环比增长。进入 2024 年公司产能利用率逐季提升，根据公司指引预计 4Q24 销售收入约 5.3-5.4 亿美元，保持温和增长，毛利率约 11%-13%，产品结构与运营效率持续优化。 晶圆交付量环比增长 8.5%，产能利用率提升至 105.3%。截至 3Q24 末，公司 月产能折合 8 英寸为 39.1 万片，3Q24 付运晶圆折合 8 英寸为 1200 千片(YoY +11.4%，QoQ+8.5%)，产能利用率持续增加至 105.3%(YoY+18.5pct， QoQ+7.4pct)。其中 8 英寸晶圆收入 263.14 亿美元(YoY-11. ...

Investment Rating - Maintain "Buy" rating for Hua Hong Semiconductor (1347 HK) [1][3] Core Views - 3Q24 revenue of $526M exceeded guidance and market expectations, driven by higher wafer shipments [1] - Gross margin of 12 2% beat guidance and consensus, supported by improved capacity utilization [1] - Net profit surged 223% YoY to $44 82M, significantly above $20 66M consensus, due to FX gains and government subsidies [1] - Demand recovery is uneven across segments, with strong growth in RF, power management ICs (BCD), and CIS, while high-voltage products like IGBT remain under pressure [1] - Capacity utilization reached 105 3%, driving wafer shipments up 11 4% YoY to 1 2M units [1] - ASP increased 1 2% QoQ to $415, marking a recovery from the 24Q2 low [1] - 4Q24 guidance suggests moderate growth, with revenue expected at $530-540M and gross margin at 11-13% [1] - Hua Hong Manufacturing's new 12-inch line is on track for trial production by end-2024, with capacity expansion to 115K wafers/month by end-2025 [1] Financial Performance Revenue and Profitability - 3Q24 revenue: $526M, down 7 4% YoY but up 10% QoQ, above guidance of $500-520M and consensus of $515M [1] - 8-inch revenue: $263M, down 12% YoY, up 7% QoQ, accounting for 50% of total revenue [1] - 12-inch revenue: $263M, down 2 5% YoY, up 12 9% QoQ, also 50% of total revenue [1] - Gross margin: 12 2%, above guidance of 10-12% and consensus of 12%, down 3 9pct YoY but up 1 7pct QoQ [1] - Net profit: $44 82M, up 223% YoY and 572% QoQ, significantly above consensus of $20 66M [1] Future Projections - 2024-2026 net profit forecasts revised to $110M, $209M, and $268M, representing YoY growth of -60 6%, +89 8%, and +28 2% respectively [1] - 2024-2026 EPS estimates: $0 06, $0 12, $0 16 [2] - 2024-2026 revenue forecasts: $2B, $2 34B, $2 84B [2] Operational Highlights - 3Q24 capacity utilization: 105 3%, up 18 5pct YoY and 7 4pct QoQ [1] - 8-inch utilization: 113% [1] - 12-inch utilization: 98 5% [1] - Wafer shipments: 1 2M units, up 11 4% YoY and 8 5% QoQ [1] - ASP: $415, up 1 2% QoQ from 24Q2 low [1] Valuation - Current valuation: 46x 2024 PE, 24x 2025 PE [1] - PB ratio: 0 8x for both 2024 and 2025 [1] - Market cap: HK$50 84B [3] - Share price: HK$22 90 [3] Industry and Market Context - Semiconductor demand is recovering unevenly, with strong growth in RF, power management ICs, and CIS, but challenges persist in high-voltage products [1] - Market competition is intensifying due to capacity expansion, limiting ASP growth potential [1] - Hua Hong Manufacturing's new 12-inch line is expected to contribute to capacity expansion and support long-term growth [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1][10]. Core Views - The company's net profit for 2025 may face pressure, but a cyclical recovery is expected to provide a temporary boost to valuation, hence the "Buy" rating is maintained [1]. - The net profit forecast for 2024 has been revised upwards from $90 million to $110 million due to increased foreign exchange gains and government subsidies [1]. - For 2025-2026, net profit estimates have been downgraded from $160 million and $250 million to $90 million and $120 million respectively, reflecting a year-on-year growth rate of -62% and -14% [1]. Financial Performance - In Q3 2024, the company reported revenue of $526 million, a 10% quarter-on-quarter increase, slightly exceeding the upper guidance of $500-520 million [2]. - The gross margin for Q3 2024 was 12.2%, which was below market expectations of 13.1% but above the company's guidance of 10-12% [2]. - The net profit for Q3 2024 was $45 million, significantly higher than the Bloomberg consensus estimate of $19 million, primarily due to foreign exchange gains and increased government subsidies [2]. Future Guidance - The company's guidance for Q4 2024 indicates expected revenue in the range of $530-540 million, which corresponds to a quarter-on-quarter growth rate of 2%, lower than the Bloomberg consensus estimate of $560 million [3]. - The gross margin guidance for Q4 2024 is set at 11-13%, which is also below the market expectation of 16% [3]. - The company anticipates a slight increase in average selling price (ASP) due to delayed shipments reflecting previous price hikes, while overall shipment volume is expected to remain flat or slightly decline due to seasonal factors [3]. Financial Summary and Valuation Metrics - The company's revenue for 2024 is projected at $1.998 billion, a year-on-year decrease of 12.6% [4]. - The net profit for 2024 is expected to be $106 million, reflecting a year-on-year decline of 62.3% [4]. - The projected gross margin for 2024 is 10.6%, with a net margin of 5.3% [4]. - The price-to-earnings (P/E) ratio for 2024 is estimated at 27.9, while the price-to-book (P/B) ratio is 0.7 [4].

Summary of Huahong Semiconductor's Q3 2024 Earnings Conference Call Company Overview - **Company**: Huahong Semiconductor - **Quarter**: Q3 2024 - **Sales Revenue**: $5.263 billion with a gross margin of 12.2% [1][2] Key Industry Insights - **Market Recovery**: The overall recovery of the semiconductor market aligns with expectations, with improvements in consumer electronics and emerging applications. However, demand for certain products, such as power discrete, remains uncertain [1][2]. - **Capacity Utilization**: The company achieved high capacity utilization rates, demonstrating resilience amid a complex market environment [2]. Financial Performance - **Revenue**: - Q3 2024 revenue was $526.3 million, a decrease of 7.4% compared to Q3 2023, but a 10% increase over Q2 2024 [3]. - Revenue from China was $434.5 million, accounting for 82.5% of total revenue, with a slight decrease of 1.5% year-over-year [4]. - **Gross Margin**: - Gross margin was 12.2%, down 3.9 percentage points from Q3 2023, but up 1.7 percentage points from Q2 2024 [3]. - **Net Profit**: - Net profit for the period was $22.9 million, a significant recovery from losses in the previous year [3][4]. - Net profit attributable to shareholders was $44.8 million, up 222.6% year-over-year [4]. - **Earnings Per Share**: Basic earnings per share was 2.6 cents, an increase of 188.9% compared to Q3 2023 [4]. Operational Highlights - **Production Capacity**: - The construction of a second 3-inch production line in Wuxi is on track, with expectations for full implementation by early next year [2]. - A new 12-inch production line is also progressing, with trial production expected to begin by early next year [2]. - **Capital Expenditures**: Capital expenditures were $734 million in Q3 2024, with significant investments in manufacturing and Wuxi facilities [5][6]. Market Outlook - **Q4 2024 Guidance**: - Expected revenue for Q4 2024 is between $530 million and $540 million, with a gross margin forecasted between 11% and 13% [7]. - **Pricing Dynamics**: - The company anticipates a slight increase in average selling prices (ASP) in the upcoming quarters, despite ongoing pricing pressures in certain segments [12][15]. - **Future Capacity**: - The second 12-inch fab is expected to contribute significantly to revenue, with a gradual ramp-up in production anticipated [9][11]. Strategic Considerations - **Market Positioning**: - The company aims to maintain its position as a specialty technology provider, focusing on high-quality products and compliance with export regulations [10][16]. - **AI and New Energy Opportunities**: - Huahong Semiconductor is positioned to capitalize on the growing demand for AI and new energy applications, leveraging its established technology platforms [18][19]. - **Acquisition Plans**: - The company is still considering the acquisition of Huahong Z5, with no specific timetable set yet [20]. Conclusion - Huahong Semiconductor's Q3 2024 performance reflects a recovery in the semiconductor market, with strategic investments in production capacity and a focus on emerging technologies. The outlook for Q4 2024 remains cautiously optimistic, with expectations for revenue growth and improved margins.

Financial Performance - Q3 2024 revenue reached $526.3 million, up 10.0% quarter-over-quarter [1] - Gross margin improved to 12.2%, up 1.7 percentage points quarter-over-quarter [1] - Net profit attributable to shareholders surged to $44.8 million, a 571.6% increase quarter-over-quarter [1] - Q4 2024 revenue guidance is between $530 million to $540 million, with gross margin expected to be 11% to 13% [2] Business Segments - Logic and RF business revenue grew to $77 million, up 54.4% year-over-year [1] - Analog and power management business revenue increased to $122.9 million, up 21.8% year-over-year [1] - 12-inch wafer sales accounted for 50.0% of total revenue, up from 47.5% in the same period last year [2] Strategic Developments - The company is focusing on the "Specialty IC + Power Devices" strategy, which has expanded its market space in downstream applications [1] - The new 12-inch production line in Wuxi is expected to start trial production and process validation by the end of this year or early next year [2] - The Wuxi Phase II 12-inch chip production line is progressing steadily, with contributions to revenue expected in the first half of next year [2] R&D and Innovation - R&D expenses for the first three quarters reached RMB 1.14 billion, up 4.93% year-over-year [2] - The company is leveraging new production lines for continuous technological iteration to meet emerging downstream demands [2] Market and Industry Outlook - The global and domestic semiconductor terminal demand is expected to continue recovering, boosting demand across the company's various process platforms [2] - The company's inclusion in the MSCI China A Onshore Index is expected to enhance its influence and attract more investor attention [3] Future Prospects - With the gradual operation of the new 12-inch production line in Wuxi Phase II, the company's revenue is expected to reach a new level [3] - The diversified specialty process platforms, combined with optimized capacity and product structure, are expected to strengthen the company's competitive edge [3]

香港交易及結算所有限公司、香港聯合交易所有限公司及香港中央結算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，概不就因本公告全部或任何部分内容而產生或因依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 (于香港注冊成立之有限公司) (股份代號: 01347) 新聞稿 二零二四年第三季度業績公佈 所有貨幣以美元列帳，除非特別指明。 本合併財務報告系依香港財務報告準則編製。 中國香港 — 2024 年 11 月 7 日 — 全球領先的特色工藝純晶圓代工廠華虹半導體有限公司（香港聯交所 股票代號：01347；上交所科創板證券代碼：688347) ("本公司")於今日公佈截至二零二四年九月三十日 止三個月的綜合經營業績。 二零二四年第三季度主要財務指標（未經審核） ■ 銷售收入 5.263 億美元，同比下降 7.4%，環比增長 10.0%。 ■ 毛利率 12.2%，同比下降 3.9 個百分點，環比上升 1.7 個百分點。 ■ 母公司擁有人應占溢利 4,480 萬美元 ，同比上升 222.6% ...

证券时报网讯，恒生科技指数涨幅扩大至2%，截至最新，比亚迪电子涨5.61%，华虹半导体涨幅为 4.94%，理想汽车-W涨幅达到4.44%，众安在线和中芯国际分别以3.99%和3.51%的涨幅位列其后，此 外，京东健康、阿里健康、阅文集团、舜宇光学科技、小米集团-W、商汤-W和金山软件均实现了超过 3%的涨幅。 校对：杨舒欣 ...

Investment Rating - The report maintains a "Buy" rating for Huahong Semiconductor with a target price of HK$29.00, representing a potential upside of 22% from the current price of HK$23.70 [1][4]. Core Views - The report indicates that Huahong Semiconductor is on a path to recovery in profitability, with expectations of revenue growth driven by a gradual recovery in demand and price increases [1][2]. - The forecast for 3Q24 includes a revenue increase of 9% quarter-on-quarter to US$522 million, with a gross margin of 11.8% [1][2]. - The semiconductor industry is experiencing a slow recovery, particularly in consumer electronics, which is expected to be a key driver for Huahong's performance [1][2]. Summary by Sections Investment Rating - The investment rating is "Buy" with a target price of HK$29.00, reflecting a 1.0x P/B for 2024 [1][4]. Financial Forecasts - Revenue for 2024 is projected at US$2,036 million, with a year-on-year decline of 11% [2]. - Gross profit is expected to be US$220 million, with a gross margin of 11% [2]. - Net profit attributable to shareholders is forecasted at US$122 million, reflecting a 57% decline year-on-year [2]. Quarterly Projections - For 3Q24, revenue is expected to reach US$522 million, with a gross margin of 12% [3]. - The report anticipates a gradual improvement in operating profit, projecting a loss of US$40 million for 3Q24, improving to a loss of US$29 million in 4Q24 [3]. Valuation - The report adjusts the target P/B from 0.8x to 1.0x for 2024, indicating a potential revaluation based on expected recovery in demand and profitability [4][5]. - The estimated book value per share for 2024 is adjusted to US$3.69, supporting the target price of HK$29.00 [5]. Industry Context - The semiconductor industry is facing challenges, including competition in traditional processes and high capital expenditures, which may impact long-term ROE [4][6]. - The report highlights that Huahong's stock has increased by 28% year-to-date, outperforming the Hang Seng Index, yet remains below its book value [1][4].