Summary of the Conference Call on China's Semiconductor Supply Chain Industry Overview - In 2Q25, China semiconductor chipmakers (fabless, IDM, foundry, OSAT) reported a revenue growth of 16-21% YoY, indicating a mild recovery in net profit margins (NPM) with fabless/IDM companies' average NPM increasing from 12% in 1Q25 to 13% in 2Q25. Foundry and OSAT suppliers' average NPM improved slightly from 4% to 5% [1][8] - Semiconductor equipment companies experienced a slowdown in sales growth from 42% YoY in 1Q25 to 28% in 2Q25, although their average NPM improved from 16% to 19% [1] - Silicon wafer suppliers, such as NSIG and Lion Electronics, continued to report losses in 2Q25 with NPM at -18% and -5%, respectively [1] Inventory Management - Notable inventory reduction was observed among Chinese semiconductor fabless companies in 2Q25, with inventory turnover periods for MCU, analog, and power discrete segments decreasing by 16-48 days QoQ [2] - Overall inventory levels in the China market remain higher than pre-2022 levels but are healthier compared to 2023-24, where days of inventory (DoI) were between 200-300 days [2] Demand and Supply Dynamics - The integrated circuit (IC) billing volume in China was reported at 12.6 billion units in July, reflecting a 10% YoY increase. This demand growth rebounded from a -1% contraction in June [3] - China's IC import volume grew by 12% YoY, while domestic manufacturing volume increased by 25% YoY. The netting off of a 17% export growth suggests a supply volume increase of 15% YoY on a 3-month moving average basis [3] - The trend of inventory digestion among Chinese chipmakers observed in 2Q25 may be moderating as supply growth has outpaced demand for two consecutive months since June [3] Pricing Trends - The global average unit price for NOR flash was reported at US$0.39 in July, down 6% MoM and 28% YoY, indicating continued price softness [4] - However, major Taiwan and China NOR flash suppliers reported normalized inventory levels, which may support price stabilization [4] - Specialty DRAM contract prices have seen significant increases in 3Q25, with DDR4 prices rising approximately 70% in July and 10% in August, while 4Gb DDR3 prices increased by 20% in July and 50% in August [4] Financial Performance Overview - In 2Q25, the fabless and IDM sectors saw over 20% YoY sales growth, while foundry, OSAT, and silicon wafer sectors grew in the mid to high teens [8] - Despite improvements in net profit margins across sectors, silicon wafer companies like NSIG and Lion Electronics continued to post net losses [8] Future Outlook - Consensus forecasts predict 15%-26% YoY sales growth for the semiconductor industry in 2026, with expectations for further improvement in net profit margins [9] - Specific companies such as SMIC and JCET are projected to see significant sales growth, with SMIC's sales expected to reach US$78.3 billion by 2026, reflecting a 16% YoY increase [9] Additional Insights - The semiconductor supply chain is experiencing a dynamic shift in supply and demand, with potential implications for inventory management and pricing strategies moving forward [3][4] - The recovery in profitability and sales growth across various segments indicates a positive trend for the semiconductor industry in China, despite ongoing challenges in specific areas such as silicon wafer production [1][8]

Core Viewpoint - The low-altitude economy in China is experiencing rapid growth, with the overall market size surpassing 500 billion yuan in 2023, and is projected to reach 1 trillion yuan in the near future, driven by market demand and supportive policies [1][11]. Summary by Sections Low-altitude Economy + Inspection Overview - The low-altitude economy + inspection refers to economic activities utilizing low-altitude aircraft such as drones and helicopters for various inspection tasks below 1,000 meters, with potential extensions up to 3,000 meters [3][4]. - This sector is characterized by the integration of advanced technologies like AI, blockchain, and VR/AR for real-time monitoring and data management [3]. Market Size and Growth - The market size for the low-altitude economy + inspection is estimated to be approximately 53.62 billion yuan in 2024, with expectations to grow to 120 billion yuan by 2025 [1][11]. - The overall low-altitude economy market is projected to reach about 670.25 billion yuan in 2024, with forecasts of 1.5 trillion yuan by 2025 and 3.5 trillion yuan by 2035 [4][5]. Policy Support - The Chinese government has introduced a series of policies to support the development of the low-altitude economy, including the inclusion of low-altitude economy in national planning and specific implementation plans for innovation in general aviation equipment [5][6]. - Key policies include financial support for critical technologies and products, aiming to enhance the industry's growth and technological capabilities [5]. Industry Chain - The low-altitude economy + inspection industry chain includes upstream hardware (materials, chips, engines), midstream manufacturing and services, and downstream applications in sectors like security, environmental protection, and energy [6][7]. - Chips are identified as a core component, essential for flight control, data processing, and communication in drones and eVTOLs [9]. Key Enterprises - Major companies in the low-altitude economy + inspection sector include DJI, Chengdu Zongheng Automation Technology Co., and several others specializing in industrial drones and related technologies [12][13]. - These companies are leveraging their technological expertise to provide innovative solutions across various applications, including public safety and environmental monitoring [12][13]. Development Trends - The industry is witnessing a trend towards increased technological integration and intelligence, with advancements in AI and machine vision enhancing operational capabilities [14]. - Application scenarios are diversifying, expanding from traditional inspections to areas like smart city management and emergency response [15]. - There is a significant enhancement in system integration and platform services, providing comprehensive solutions from data collection to intelligent analysis [16].

Group 1 - The core viewpoint is that the 科创100ETF fund has shown significant growth, with a 3.63% increase and a total scale of 57.64 billion, making it the largest in its category [1][2] - Semiconductor stocks are experiencing a strong performance, driven by Oracle's announcement of a 359% year-on-year increase in unmet performance obligations, reaching 455 billion [1] - The ongoing global AI computing power competition is expected to drive demand in the semiconductor and consumer electronics sectors, with a focus on innovation and recovery in demand [1] Group 2 - The 科创100ETF fund closely tracks the 上证科创板100 index, which selects 100 securities from the Sci-Tech Innovation Board based on market capitalization and liquidity [2] - As of August 29, 2025, the top ten weighted stocks in the 上证科创板100 index account for 23.82% of the index, including companies like 东芯股份 and 华虹公司 [2]

Group 1 - The semiconductor sector in both A-shares and Hong Kong stocks is experiencing significant strength, with notable stocks like Haiguang Information and Cambricon Technologies seeing substantial gains [1] - Oracle's recent financial results have catalyzed the computing power sector, with its remaining performance obligations soaring to $455 billion, a 359% year-on-year increase, driven by large cloud contracts with top AI companies [1] - The semiconductor materials market is expanding steadily, with growth observed in sub-sectors such as photoresists and electronic chemicals, indicating a positive outlook for the semiconductor materials sector [1] Group 2 - The Hang Seng Technology Index is currently undervalued, with expectations of a rebound due to continuous inflow of southbound funds and the potential start of a new interest rate cut cycle in the US [2] - The ongoing anti-involution policies and Alibaba's better-than-expected financial results, along with rapid iterations in AI large models, suggest a potential revaluation of the Hang Seng Technology sector [2]

Market Overview - The Hang Seng Index closed down 0.29% at midday on September 11, while the Hang Seng Tech Index fell by 0.09% [1] Sector Performance - The semiconductor sector showed strong performance, with SMIC rising over 6%, and Huahong Semiconductor and Shanghai Fudan both increasing nearly 6% [1] - Conversely, the pharmaceutical and automotive sectors experienced declines, with Hansoh Pharmaceutical dropping 9.18% and China Biologic Products falling 5.46% [1]

Group 1 - The core viewpoint of the news is the significant increase in the stock price of Huahong Semiconductor, which rose by 5.08% to 71.77 CNY per share, with a trading volume of 1.16 billion CNY and a turnover rate of 4.06%, leading to a total market capitalization of 124.42 billion CNY [1] - Huahong Semiconductor, established on January 21, 2005, and listed on August 7, 2023, is primarily engaged in specialty process wafer foundry services, offering a diverse range of platforms including embedded/non-volatile memory, power devices, analog and power management, logic, and RF [1] - The company's revenue composition is heavily weighted towards integrated circuit wafer foundry services, accounting for 94.60% of total revenue, with other services contributing 4.78% and rental income at 0.62% [1] Group 2 - Jin Xin Fund has a significant position in Huahong Semiconductor, with its Jin Xin Transformation Innovation Mixed A Fund (002810) increasing its holdings by 137,000 shares in the second quarter, bringing the total to 330,000 shares, which represents 4.41% of the fund's net value [2] - The Jin Xin Transformation Innovation Mixed A Fund has achieved a year-to-date return of 30.62%, ranking 2130 out of 8175 in its category, and a one-year return of 89%, ranking 527 out of 7982 [2] - The fund managers, Huang Biao and Yang Chao, have demonstrated varying performance, with Huang achieving a best return of 116.46% and Yang a best return of 59.06% during their respective tenures [3]

Group 1 - The core viewpoint of the news is the performance and business profile of Huahong Semiconductor, which saw a stock price increase of 5.08% to 71.77 CNY per share, with a total market capitalization of 124.42 billion CNY [1] - Huahong Semiconductor, established on January 21, 2005, specializes in specialty process wafer foundry services, providing a diverse range of platforms including embedded/non-volatile memory, power devices, analog and power management, logic, and RF [1] - The company's revenue composition is primarily from integrated circuit wafer foundry services, accounting for 94.60%, with other revenues from various sources [1] Group 2 - From the perspective of fund holdings, the Tongtai Tongxin Mixed A Fund (013657) has a position in Huahong Semiconductor, having reduced its holdings by 647 shares in the second quarter, now holding 893 shares, which represents 0.14% of the fund's net value [2] - The fund has a total scale of 29.86 million CNY and has achieved a year-to-date return of 3.63% [2] - The fund manager, Ma Yi, has a tenure of 11 years and 179 days, with the best fund return during his tenure being 47.12% [3]

Investment Rating - The report maintains a "Recommended" investment rating for the electronic industry [3] Core Insights - The electronic industry is experiencing a new wave of performance growth driven by AI, with significant opportunities in semiconductor and consumer electronics sectors [5][6] - The report highlights the strong recovery in the semiconductor sector, particularly in analog and digital chips, with AI being a core growth driver [5][6] - Consumer electronics are also benefiting from AI, with companies like Anker Innovation and Ugreen achieving over 30% revenue growth [5][6] Semiconductor Sector Summary - **Analog Chips**: Revenue reached 24.405 billion yuan, up 13.12% year-on-year, with a net profit of 502 million yuan, up 280.49% [7] - **Digital Chips**: Revenue of 87.129 billion yuan, a 24.72% increase, with net profit of 9.050 billion yuan, up 35.32% [16] - **Power Semiconductors**: Net profit for Q2 reached 2.873 billion yuan, a 45.3% increase year-on-year, indicating a recovery phase [26] - **Semiconductor Manufacturing**: Revenue for H1 was 27.273 billion yuan, down 24.7% year-on-year, but showing signs of recovery in Q2 [34] - **Semiconductor Equipment**: The sector saw a 30.6% increase in revenue, totaling 41.509 billion yuan, with net profit of 6.631 billion yuan, up 19.8% [47] Consumer Electronics Summary - Companies like Anker Innovation and Ugreen reported over 30% growth in revenue and net profit, driven by brand strength and product innovation [5] - The demand for new consumer electronics products such as AR glasses and smart speakers is expected to drive further innovation and market recovery [5] PCB and Components Summary - PCB demand is surging due to AI-related capital expenditures, with companies like Shenzhen Circuit achieving significant order growth [5] - The MLCC market is also showing good growth, with companies expanding their product matrices to meet diverse market needs [5] Investment Recommendations - The report suggests focusing on companies involved in computing power-related sectors, including PCB, domestic computing power, IP licensing, and chip inductors [5] - Key companies to watch include Cambrian, Haiguang Information, and SMIC, among others [5]

国泰海通证券股份有限公司 关于华虹半导体有限公司 2025年半年度持续督导跟踪报告 重大事项提示 2025年上半年，华虹半导体有限公司（以下简称"华虹公司"或"公司"）营 业收入801,765.69万元，较上年同期上升19.09%；归属于上市公司股东的净利润 7,431.54万元，归属于上市公司股东的扣除非经常性损益的净利润5,539.18万元，分 别较上年同期下降71.95%、76.31%。 公司2025年上半年收入较2024年上半年上升，但归属于上市公司股东的扣除非 经常性损益的净利润有所下降，主要系子公司华虹半导体制造（无锡）有限公司投 产初期产能爬坡及公司整体研发投入较高所致。2025年上半年，公司生产经营正常， 不存在重大风险。 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》等有关法律法规的规定，国泰海通证券股份有限公司（以下简称"国泰海通" 或"保荐机构"）作为华虹公司持续督导工作的保荐机构，负责华虹公司上市后的 持续督导工作，并出具本持续督导跟踪报告。 | 工作内容 | 持续督导情况 | | --- | --- | | 1、建立健全并有效执行持续督导工作制度，并针对 ...

HUA HONG SEMICONDUCTOR LIMITED 華虹半導體有限公司 (Incorporated in Hong Kong with limited liability) (Stock Code: 01347) （股份代號：01347） （於香港註冊成立之有限公司） 中期報告 2025 INTERIM REPORT DEFINITIONS In this interim report, unless the context otherwise requires, the following terms shall have the meanings set out below. | "Board" | the Board of Directors of the Company; | | --- | --- | | "China" or "the PRC" | the People's Republic of China, but for the purpose of this interim report | | | and for geographical reference only, exc ...