Investment Rating - The report maintains a "Buy" rating for the company [2] Core Views - The company's operational data has significantly improved, with a focus on expanding production capacity for long-term growth [2] - The second quarter of 2024 saw a year-on-year revenue decrease of 24.2% but a quarter-on-quarter increase of 4.0%, aligning with the company's guidance [2] - The gross profit margin improved to 10.5%, exceeding the previous quarter's guidance [2] Summary by Relevant Sections Revenue and Profitability - The company reported a total revenue of 478.5 million USD in Q2 2024, with a gross profit margin of 10.5% [2] - The net profit attributable to the parent company was 6.7 million USD, reflecting a 79.0% quarter-on-quarter increase [2] - Revenue guidance for Q3 2024 is set between 500-520 million USD, indicating a quarter-on-quarter growth of 4.5%-8.7% [2] Production and Capacity - The overall utilization rate for Q2 2024 was 97.9%, with 8-inch wafers at 107.6% and 12-inch wafers at 89.3% [2] - The company delivered 1,106K wafers, showing a year-on-year increase of 3% and a quarter-on-quarter increase of 7.8% [2] Product Performance - The embedded non-volatile memory segment saw a quarter-on-quarter increase of 15%, while power management products increased by 6% [2] - The 55/65nm process node achieved a year-on-year growth of 16.1%, with revenue contribution exceeding 20% [2] Financial Adjustments - The forecast for net profit attributable to the parent company has been adjusted to 733 million USD for 2024, 1.287 billion USD for 2025, and 1.999 billion USD for 2026 [2][3] - The price-to-earnings ratio is projected at 69X for 2024, 39X for 2025, and 25X for 2026 [2]

12 Aug 2024 CMB International Global Markets | Equity Research | Company Update Hua Hong Semi (1347 HK) Slowly but surely, gradual recovery is in play Hua Hong Semi announced 2Q24 results. Revenue was down 24.2% YoY but up 4.0% QoQ to US$479mn, slightly missing Bloomberg consensus by 2.0% and our estimates by 1.6%. The moderate sequential growth was a result of growing wafer shipments (+8.4% QoQ) partially offset by continued downward ASP (-3.5% QoQ). GPM increased QoQ to 10.5% (vs. 6.4%/27.7% in 1Q24/2Q23) ...

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。 华虹半导体有限公司 关于高级管理人员暨核心技术人员调整的公告 重要内容提示： | A 股代码：688347 | A 股简称：华虹公司 | 公告编号：2024-023 | | --- | --- | --- | | 港股代码：01347 | 港股简称：华虹半导体 | | 公司董事会于 2024 年 8 月 20 日作出决议，同意孔先生不再担任公司的执行 副总裁；同时，孔先生将不再作为公司的核心技术人员。孔先生在担任高级管理 人员及核心技术人员期间恪尽职守、勤勉尽责，为公司发展发挥了积极作用，公 司及董事会对此表示衷心感谢。 （一） 孔先生的基本情况 孔先生，1963年出生，美国国籍，应用物理专业博士学位。孔先生先后任职 于北京理工大学、美国 Schlumberger ATE 公司、美国 ISSI 公司、美国 LSI Logic 公司、美国 Sun Micro System 公司、上海宏力半导体制造有限公司、公司及其子 公司（上海华虹宏力半导体制造有限公司、华虹半导体（无锡）有限 ...

国泰君安证券股份有限公司、海通证券股份有限公司 公司董事会于2024年8月20日作出决议，同意Weiran Kong（孔蔚然）先生（ 以下简称"孔先生"）不再担任公司的执行副总裁；同时，孔先生将不再作为公 司的核心技术人员。 关于华虹半导体有限公司 高级管理人员暨核心技术人员调整的核查意见 国泰君安证券股份有限公司与海通证券股份有限公司（以下合称"联席保荐 人"）作为华虹半导体有限公司（以下简称"华虹公司"或"公司"）首次公开 发行人民币普通股（A股）股票并在科创板上市的联席保荐人，根据《证券发行上 市保荐业务管理办法》《上海证券交易所科创板股票上市规则》《上海证券交易 所上市公司自律监管指引第11号——持续督导》《上海证券交易所科创板上市公 司自律监管指引第1号——规范运作》等有关规定，对华虹公司高级管理人员暨核 心技术人员调整的事项进行了审慎核查，具体情况如下： 一、委任高级管理人员及核心技术人员的情况 经公司董事会于2024年8月20日作出书面决议，同意委任Guangping Hua（华 光平）先生（以下简称"华先生"）担任公司的执行副总裁；同时，公司将认定 华先生为公司的核心技术人员。华先生简历如下： ...

於本公告日期，本公司董事分別為： 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） 董事會會議日期通知 華虹半導體有限公司（「本公司」）特此通知，本公司謹訂於二零二四年八月二十九 日（星期四）上午十時三十分舉行董事會會議，以商討下列事項： 承董事會命 華虹半導體有限公司 董事長兼執行董事 張素心先生 中國上海，二零二四年八月十五日 執行董事 張素心 （董事長） 唐均君 （總裁） 非執行董事 葉峻 孫國棟 周利民 熊承艷 獨立非執行董事 張祖同 王桂壎太平紳士 封松林 1. 考慮及批准刊發本公司及其附屬公司截至二零二四年六月三十日止未經審核 中期業績；及 2. 商議任何其他事項。 ...

Investment Rating - Buy rating with a target price of HKD 29.00, representing a 57.8% upside potential from the current price [2][5] Core Views - The company's 24Q2 revenue reached USD 480 million, a 4% QoQ increase but a 24% YoY decline, with a gross margin of 10.5% [2] - Net profit attributable to shareholders was USD 6.67 million, down 92% YoY and 79% QoQ, with a capacity utilization rate of 98%, up 6 ppts QoQ [2] - The company expects 24Q3 revenue to grow 4-9% QoQ, with gross margin improving to 10-12% [2] - Recovery in the consumer electronics and AI sectors drove 24H1 revenue growth, while the power device market remains weak [2] - The company's 12-inch fab is expected to start mass production in 25Q1, with 40,000 wafers per month capacity by mid-2025 [2] - Wafer ASP is expected to gradually recover, with 2024-2026 ASPs projected at USD 422/522/566, and gross margins at 11.6%/21.1%/27.7% [2] Financial Performance Summary - 24Q2 eNVM revenue was USD 140 million, up 15% QoQ but down 34.2% YoY, driven by lower MCU ASPs and reduced demand for smart card chips [2] - Discrete device revenue was USD 150 million, up 6.3% QoQ but down 39.4% YoY, due to lower demand and ASPs for IGBT and super-junction products [2] - Logic and RF revenue was USD 60 million, up 11% YoY, benefiting from growth in CIS and logic product demand [2] - Analog and power management revenue was USD 100 million, down 0.4% QoQ but up 25.7% YoY, driven by increased demand for power-related products [2] Future Outlook - The company is expected to maintain high capacity utilization, with wafer ASPs gradually recovering, supported by strong demand for CIS, RF, and PMIC products [2] - The automotive and industrial markets remain uncertain, putting pressure on power device and MCU product prices [2] - The company's second 12-inch fab is expected to contribute to ASP improvements starting in 2025, with significant capacity expansion planned [2] Financial Projections - 2024-2026 revenue is projected at USD 1.97/2.94/3.45 billion, with net profits of USD -47/196/519 million [2][4] - 2024-2026 gross margins are forecasted at 11.6%/21.1%/27.7%, with EBITDA margins at 24.4%/42.2%/47.4% [4][6] - The company's P/B ratio for 2024 is estimated at 1x, supporting the target price of HKD 29.00 [2]

Group 1: Company Overview - Huahong Semiconductor is a leading foundry specializing in 8-inch and 12-inch wafer manufacturing, focusing on embedded/non-volatile memory, power devices, and logic/RF applications [1] - The company operates three 8-inch wafer fabs in Shanghai with a monthly capacity of approximately 180,000 wafers and one 12-inch fab in Wuxi with a monthly capacity of 94,500 wafers [2] Group 2: Financial Performance - In Q2 2024, the company reported sales revenue of $478.5 million, a decrease from $631.4 million in the same period last year and an increase from $460 million in the previous quarter [2] - The gross margin for Q2 2024 was 10.5%, down from 27.7% year-on-year and up from 6.4% quarter-on-quarter [2] - Net profit attributable to shareholders was $6.7 million, compared to $78.5 million in the same period last year and $31.8 million in the previous quarter [2] Group 3: Market Outlook - The company expects Q3 2024 sales revenue to be between $500 million and $520 million, with a gross margin forecast of 10% to 12% [3] - The semiconductor market is showing signs of slow recovery, particularly in consumer electronics, with capacity utilization rates nearing full capacity [3][4] Group 4: Production Capacity and Expansion - The second 12-inch production line is under construction and is expected to begin trial production by the end of 2024, which will enhance the company's capacity and capabilities [2][4] - The company maintains an optimistic outlook for capacity utilization rates above 95% for the second half of 2024 and into 2025 [4] Group 5: Pricing Strategy and Market Position - The company has adjusted prices recently, aiming for a 5-10% increase in overall pricing due to improved capacity utilization and product mix optimization [4] - The company aims to maintain a revenue distribution of 70% from mainland China and 30% from overseas markets, with expectations for overseas revenue to gradually recover [3][4]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 24.00, indicating a potential upside of 32.7% from the current price of HKD 18.08 [1][2]. Core Insights - The company has shown a gradual recovery in market demand, with capacity utilization nearing full capacity. The second quarter revenue was USD 479 million, a year-on-year decline of 24.2% but a quarter-on-quarter increase of 4.0% [2]. - The gross margin for the second quarter improved to 10.5%, significantly higher than the previous quarter's 6.4% and above market expectations [2]. - The company is expected to benefit from the trend of self-sufficiency in China's semiconductor industry, with a forecasted revenue guidance for the third quarter of USD 510 million, reflecting a year-on-year decline of 10.3% but a quarter-on-quarter increase of 6.6% [2]. Financial Summary - The company's financial performance shows a projected revenue of USD 1.983 billion for FY24, a decrease of 13.3% year-on-year, with a gross margin of 11.4% [5][6]. - Net profit is expected to drop to USD 134.7 million in FY24, a decline of 51.9% year-on-year, but is projected to recover in FY25 with an increase to USD 244 million [5][6]. - The company’s cash flow analysis indicates a net operating cash flow of USD 692 million for FY25, reflecting a positive trend in cash generation [10]. Market Position - The company’s market share in the consumer electronics segment has shown signs of recovery, contributing 62% to total revenue in the latest quarter [2]. - The management anticipates maintaining high capacity utilization rates, with projections of 84% in Q4 2023 and 98% in Q1 and Q2 2024 [2]. - The company’s stock performance has been volatile, with a 52-week high of HKD 24.60 and a low of HKD 13.86, indicating significant market fluctuations [3]. Valuation Metrics - The report values the company at 0.8 times the projected 2024 price-to-book ratio, which is above the historical average forward P/E ratio by 10% [2]. - The expected earnings per share for FY24 is USD 0.08, with a projected P/E ratio of 29.5 [5][6]. Conclusion - The report concludes that despite challenges in average selling prices, the company is well-positioned to capitalize on the recovery in the semiconductor market and maintain a balanced approach between average selling prices and capacity utilization to maximize revenue [2].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 24.00, indicating a potential upside of 32.7% from the current price of HKD 18.08 [1][2]. Core Insights - The company has shown signs of recovery in market demand, with capacity utilization rates nearing full capacity. The second quarter revenue was USD 479 million, a year-on-year decline of 24.2% but a quarter-on-quarter increase of 4.0% [2]. - The gross margin for the second quarter improved to 10.5%, up from 6.4% in the previous quarter, despite a year-on-year decline from 27.7% [2]. - The company is expected to benefit from the trend of self-sufficiency in China's semiconductor industry, with a forecasted revenue of USD 510 million for the third quarter, reflecting a year-on-year decline of 10.3% but a quarter-on-quarter increase of 6.6% [2]. Financial Data Summary - For FY24E, the company is projected to have sales revenue of USD 1,983 million, a year-on-year decline of 13.3%. The gross margin is expected to be 11.4%, with a net profit of USD 135 million, reflecting a 51.9% year-on-year decline [5][6]. - The company’s capacity utilization rates are projected to remain high, with expectations of 84% in Q4 2023 and 92% and 98% in Q1 and Q2 2024, respectively [2]. - The company’s financial outlook includes a slight downward adjustment of revenue forecasts by 3% and 4% for FY24 and FY25, respectively, while gross margin forecasts have been increased by 0.5 percentage points [2].

Investment Rating - Maintains a "Buy" rating for Hua Hong Semiconductor (1347 HK) and Hua Hong Company (688347 CH) [2] - The target price for Hua Hong HK is HKD 23.3, with a potential upside of 21%, and for Hua Hong A-shares, it is RMB 43.7, with a potential upside of 27% [2][3] Core Views - Hua Hong Semiconductor's 2Q24 performance met market expectations, with a significant improvement in gross margin and capacity utilization [2] - The company's gross margin in 2Q24 reached 10.5%, exceeding the guidance range, and is expected to continue improving in 3Q24 [2] - The second 12-inch fab in Wuxi is expected to start trial production in 4Q24 and officially operate in 1Q25, contributing to long-term revenue growth [2] - The company anticipates price increases across most product lines in 3Q24 and 4Q24, except for IGBT, which remains weak [2] - The EV/EBITDA target valuation for 2024 has been raised to 11x, reflecting improved fundamentals [2] Financial Performance and Guidance - 2Q24 revenue declined by 24% YoY but showed a sequential improvement, with a 7% QoQ growth expected in 3Q24 [2] - 2Q24 net profit was $6.67 million, down both YoY and QoQ due to increased expenses from new fabs [2] - 3Q24 revenue guidance is $510 million, with a gross margin of 11%, indicating further improvement [2][8] - The company aims to achieve gross margins of 45%-50% for 8-inch fabs and 25%-30% for 12-inch fabs within 12-16 months [2] Valuation and Financial Metrics - Hua Hong HK's current price-to-book ratio is 0.7x, below the historical average of 1.0x, indicating attractive valuation [2][11] - The EV/EBITDA ratio for Hua Hong HK is 4.1x, significantly below the historical average of 15.0x [11] - The company's free cash flow is expected to improve, with a forecast of -$416 million in 2024E and -$313 million in 2025E [6] Industry and Competitive Position - Hua Hong Semiconductor benefits from the semiconductor industry's upward momentum, with improving product mix and pricing power [2] - The company's capacity utilization has significantly improved, supporting gross margin expansion [2] - The Wuxi 12-inch fab's capacity is expected to reach 20,000 wafers per month by the end of 2025, driving long-term growth [2] Financial Projections - Revenue for 2024E is projected at $1,996 million, with a gross margin of 11.5% [9] - EBITDA for 2024E is forecasted at $492 million, with an EBITDA margin of 24.6% [9] - Net profit for 2024E is expected to be $65 million, with a net profit margin of 3.3% [9]