Updated Components EPS Investment Thesis Risk Reward for Hua Hong Semiconductor Ltd (1347.HK) has been updated Reason for change We lower our 2025/2026/2027 EPS forecasts by 12%, 2% and 2%, respectively, reflecting the fluctuation in tax expenses and minority interests. We also roll our residual income model forward to 2026, which sees our price target stay unchanged at HK$60. We remain UW. Morgan Stanley Taiwan Limited+ November 7, 2025 03:42 AM GMT Hua Hong Semiconductor Ltd | Asia Pacific M Update Risk R ...

Group 1 - Hong Kong chip stocks experienced a decline in the afternoon trading session on November 11 [1] - Hua Hong Semiconductor (01347.HK) fell by 4.29%, trading at 74.75 HKD [1] - SMIC (00981.HK) decreased by 3.41%, with a price of 72.15 HKD [1] Group 2 - Contrelon (01912.HK) saw a drop of 1.41%, priced at 0.07 HKD [1] - Shanghai Fudan (01385.HK) declined by 0.75%, trading at 39.96 HKD [1]

Core Viewpoint - Semiconductor stocks experienced a decline in afternoon trading, with notable drops in companies such as Hua Hong Semiconductor and SMIC, amidst upcoming earnings announcements and mixed financial results [1] Group 1: Company Performance - Hua Hong Semiconductor reported a record high sales revenue of $635.2 million for Q3, representing a year-on-year increase of 20.7% and a quarter-on-quarter increase of 12.2% [1] - The net profit attributable to shareholders for Hua Hong Semiconductor was $25.7 million, showing a year-on-year decline of 42.6% but a quarter-on-quarter increase of 223.5% [1] Group 2: Analyst Insights - Jianyin International slightly raised the profit forecast for Hua Hong Semiconductor for 2025, citing better-than-expected gross margin projections for Q3 and Q4 of 2025 [1] - The acquisition of Hua Hong's fifth factory is expected to enhance the company's return on equity, with completion anticipated in 2026 [1] - The target price for Hua Hong Semiconductor was raised by 46% from HKD 50 to HKD 73, although the rating was downgraded from "outperform" to "neutral" due to high valuation levels [1]

Core Viewpoint - Semiconductor stocks experienced a decline in afternoon trading, with notable drops in companies such as Hua Hong Semiconductor and SMIC, amidst upcoming earnings announcements and mixed financial results [1] Group 1: Company Performance - Hua Hong Semiconductor reported a record high sales revenue of $635.2 million for Q3, representing a year-on-year increase of 20.7% and a quarter-on-quarter increase of 12.2% [1] - The net profit attributable to shareholders for Hua Hong Semiconductor was $25.7 million, showing a year-on-year decrease of 42.6% but a quarter-on-quarter increase of 223.5% [1] Group 2: Analyst Insights - Jianyin International slightly raised the profit forecast for Hua Hong Semiconductor for 2025, citing better-than-expected gross margin projections for Q3 and Q4 of 2025 [1] - The acquisition of Hua Hong's fifth factory is expected to enhance the company's return on equity, with completion anticipated in 2026 [1] - Jianyin International adjusted the target price for Hua Hong Semiconductor from HKD 50 to HKD 73, an increase of 46%, but downgraded the rating from "Outperform" to "Neutral" due to high valuation levels [1]

格隆汇11月11日｜港股市场芯片股跌幅扩大，其中，华虹半导体跌超4%，中芯国际、ASMPT跌超3%。 ...

Group 1 - Hua Hong Semiconductor (01347.HK) declined by 4.01% [1] - SMIC (00981.HK) fell by 3.48% [1] - Shanghai Fudan (01385.HK) decreased by 0.70% [1]

Key Insights - The report highlights that Huahong Semiconductor achieved a record high revenue of $635 million in Q3 2025, marking a year-on-year increase of 20.7% and a quarter-on-quarter increase of 12.2%. The capacity utilization rate reached 109.5%, and the gross margin was 13.5%, exceeding guidance. The strong performance is attributed to high capacity utilization and rising average selling prices, despite some cost pressures [6][7]. - Google's upcoming TPU chip is set to launch soon, boasting over four times the performance of its predecessor, making it the most powerful and energy-efficient custom AI chip to date. This chip is expected to enhance Google's competitiveness in AI infrastructure and drive growth in its cloud business [8][6]. - The electronic industry is experiencing a demand recovery, with storage chip prices rising unexpectedly. The report suggests focusing on structural opportunities in AI computing, AIOT, semiconductor equipment, key components, and storage price increases [6][11]. Group 1: Huahong Semiconductor Performance - Huahong Semiconductor's Q3 2025 revenue reached $635 million, a 20.7% year-on-year increase and a 12.2% quarter-on-quarter increase, achieving historical highs [7]. - The company's gross margin was 13.5%, which is 1.3 percentage points higher year-on-year and 2.6 percentage points higher quarter-on-quarter, driven by high capacity utilization and increased average selling prices [7]. - The revenue from 65nm and below process nodes grew significantly by 47.7%, accounting for 27.1% of total revenue, primarily due to strong demand for flash memory, logic, and analog products [7]. Group 2: Market Trends and Recommendations - The report indicates that the electronic industry is slowly recovering, with storage chip price increases exceeding expectations. It recommends positioning for opportunities in AIOT and semiconductor sectors, particularly companies benefiting from strong domestic and international demand [11][12]. - The report emphasizes the importance of domestic AI technology advancements and application promotion, especially in light of global market fluctuations and the need for self-sufficiency in technology [12][14]. - The October inflation data shows a positive trend, with CPI rising 0.2% year-on-year and PPI showing its first positive growth of the year, indicating potential for continued price recovery in the fourth quarter [16][17].

Core Viewpoint - The acquisition of Huahong Semiconductor's fifth factory is expected to enhance the company's return on equity, with completion anticipated in 2026. Consequently, the target price has been raised by 46% from HKD 50 to HKD 73, although the rating has been downgraded from "Outperform" to "Neutral" due to high valuation levels [1][1][1]. Financial Performance - The profit forecast for 2025 has been slightly increased, primarily due to better-than-expected gross margin forecasts for the third and fourth quarters of 2025 [1][1]. - The group's revenue for the third quarter of 2025 is projected to be USD 635 million, representing a year-on-year increase of 21% and a quarter-on-quarter increase of 12%, aligning with general expectations from the company and institutions [1][1][1].

Core Viewpoint - The acquisition of Huahong Semiconductor's fifth factory is expected to enhance the company's return on equity, with completion anticipated in 2026. Consequently, the target price has been raised by 46% from HKD 50 to HKD 73, although the rating has been downgraded from "Outperform" to "Neutral" due to high valuation levels [1][1][1]. Financial Performance - The profit forecast for 2025 has been slightly increased, primarily due to better-than-expected gross margin projections for the third and fourth quarters [1][1]. - For the third quarter of 2025, the company is expected to report revenues of USD 635 million, representing a year-on-year increase of 21% and a quarter-on-quarter increase of 12%, aligning with general expectations from the company and institutions [1][1][1].

Key Points - The top three stocks with net inflows from southbound funds are Xiaopeng Motors (12.25 billion), Huahong Semiconductor (9.60 billion), and Xiaomi Group (6.63 billion) [1][2] - The top three stocks with net outflows are the Tracker Fund of Hong Kong (-9.43 billion), Hang Seng China Enterprises (-5.33 billion), and Pop Mart (-4.20 billion) [1][2] - In terms of net inflow ratio, Qingdao Bank (58.10%), Modern Dairy (51.22%), and Shougang Resources (46.73%) lead the market [1][3] - The stocks with the highest net outflow ratios are Yancoal Australia (-63.89%), Cha Baidao (-55.23%), and Luk Fook Holdings (-55.03%) [1][3] Net Inflow Rankings - Xiaopeng Motors had a net inflow of 12.25 billion, representing a 29.35% increase in its closing price to 89.400 [2] - Huahong Semiconductor saw a net inflow of 9.60 billion, with a closing price increase of 9.05% to 80.100 [2] - Xiaomi Group experienced a net inflow of 6.63 billion, with a slight closing price increase of 0.28% to 43.440 [2] Net Outflow Rankings - The Tracker Fund of Hong Kong had the largest net outflow of -9.43 billion, with a closing price increase of 2.15% to 26.600 [2] - Hang Seng China Enterprises faced a net outflow of -5.33 billion, with a closing price increase of 2.09% to 95.540 [2] - Pop Mart recorded a net outflow of -4.20 billion, with a minimal closing price increase of 0.09% to 217.600 [2] Net Inflow Ratio Rankings - Qingdao Bank led with a net inflow ratio of 58.10%, with a net inflow of 49.11 million and a closing price of 4.090 [3] - Modern Dairy followed with a net inflow ratio of 51.22%, net inflow of 6.91 million, and a closing price of 1.230 [3] - Shougang Resources had a net inflow ratio of 46.73%, with a net inflow of 15.71 million and a closing price of 3.250 [3] Net Outflow Ratio Rankings - Yancoal Australia had the highest net outflow ratio of -63.89%, with a net outflow of -26.17 million and a closing price of 28.540 [3] - Cha Baidao recorded a net outflow ratio of -55.23%, with a net outflow of -6.01 million and a closing price of 7.160 [3] - Luk Fook Holdings had a net outflow ratio of -55.03%, with a net outflow of -27.30 million and a closing price of 23.680 [3]