Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company reported a Q4 2024 revenue of 3.886 billion yuan, representing a year-over-year increase of 18.5% and a quarter-over-quarter increase of 3.07%. The gross margin was 18.07%, with a net loss of 197 million yuan primarily due to foreign exchange losses. The total revenue for 2024 was 14.388 billion yuan, with a gross margin of 17.43% and a net profit attributable to shareholders of 381 million yuan, aligning with forecasts [4][5] - The company’s ASP has shown positive growth for two consecutive quarters, with a Q4 2024 ASP of $444 per wafer, a quarter-over-quarter increase of 1.3%. The overall capacity utilization rate was 103.2% [5] - The company has adjusted its profit forecasts, projecting net profits of 881 million yuan for 2025 and 1.184 billion yuan for 2026, with a new forecast for 2027 set at 1.559 billion yuan. The corresponding PE ratios for 2025-2027 are 90, 67, and 51 respectively [5] Financial Data and Profit Forecast - The company’s total revenue is projected to grow from 14.388 billion yuan in 2024 to 17.558 billion yuan in 2025, with a year-over-year growth rate of 22% [4][7] - The net profit attributable to shareholders is expected to increase significantly from 381 million yuan in 2024 to 881 million yuan in 2025, reflecting a year-over-year growth rate of 131.4% [4][7] - The gross margin is anticipated to decline from 17.4% in 2024 to 13% in 2025, indicating a shift in profitability dynamics [4][7]

Group 1 - The core point of the news is that Huahong Company (688347.SH) is currently trading at 45.88 yuan, reflecting a decline of 3.94% and is in a state of breaking its initial public offering price [1] - Huahong Company was listed on the Shanghai Stock Exchange's Sci-Tech Innovation Board on August 7, 2023, with an issuance of 407,750,000 shares, accounting for 23.76% of the total share capital after issuance, at a price of 52.00 yuan per share [1] - The total amount raised by Huahong Company during its IPO was 2,120,300,000 yuan, with a net amount of 2,092,067,700 yuan, exceeding the original plan by 2.921 billion yuan [1] Group 2 - The company plans to use the raised funds of 18 billion yuan for projects including Huahong Manufacturing (Wuxi), optimization and upgrading of the 8-inch factory, innovation and research in specialized technology, and to supplement working capital [1] - The total issuance costs for the public offering of new shares amounted to 282,323,000 yuan, including underwriting fees of 260,586,000 yuan [1] - Investors participating in the strategic placement of Huahong Company received a total of 203,875,000 shares during the IPO, with the lead underwriters receiving 8,155,000 shares each, corresponding to an investment amount of 424,060,000 yuan [2]

Core Points - The audit report for Huahong Semiconductor Co., Ltd. for the fiscal year 2024 was issued by Ernst & Young Huaming, confirming the financial statements with no reservations [1][2] - The report includes a summary table of non-operating fund occupation and other related fund transactions for the year 2024, as required by regulatory guidelines [1][2] Summary by Sections Audit Overview - The audit covered the consolidated and company balance sheets as of December 31, 2024, along with the income statement, statement of changes in equity, and cash flow statement for the fiscal year [1] - The audit report was issued on March 27, 2025, under the reference number 70013197_B02 [1] Non-Operating Fund Occupation - Huahong Semiconductor is responsible for the truthful, legal, and complete preparation and disclosure of the summary table [2] - The summary table should be read in conjunction with the audited financial statements for a better understanding of the non-operating fund occupation and related transactions [2] Related Party Transactions - The summary table includes details on non-operating fund occupation and other related party transactions, with specific amounts and reasons for the transactions [4][5] - The total amount of non-operating fund occupation and related transactions is detailed, indicating the financial interactions with related parties [5]

Core Viewpoint - The special report on the use and storage of raised funds by Huahong Semiconductor Co., Ltd. for the year 2024 has been verified, confirming compliance with regulatory requirements and accurately reflecting the company's fundraising activities and fund management practices [2][3]. Fundraising Basic Situation - The company was approved to publicly issue 40,775,000 shares at a price of RMB 52.00 per share, raising a total of RMB 2,120,300,000. After deducting various fees totaling RMB 28,232,300, the net amount raised was RMB 2,092,067,700, which was fully received by July 31, 2023 [4]. - As of December 31, 2024, the actual received fundraising amount was RMB 2,094,241,400, with total expenses of RMB 1,416,476,670 for investment projects, resulting in a remaining balance of RMB 696,643,960 in the special account [4]. Fund Management Situation - The company has established a fundraising management system to regulate the use and management of raised funds, ensuring compliance with relevant laws and protecting shareholder rights [5]. - A special account storage system has been implemented, with agreements signed with various banks and securities firms to ensure proper oversight of the raised funds [5][6]. Fund Usage - The company has authorized the use of temporarily idle raised funds for cash management, with all cash management products redeemed by August 22, 2024, leaving a balance of zero [8]. - The company has utilized self-owned funds for part of the investment project payments and will regularly transfer equivalent amounts from the special account to its own funds [8].

Group 1 - The audit report indicates that the financial statements of Huahong Semiconductor Co., Ltd. fairly reflect its financial position as of December 31, 2024, and its operational results for the year 2024 [1][2] - The audit was conducted in accordance with Chinese CPA auditing standards, ensuring independence and adherence to professional ethics [1][2] - Key audit matters included long-term asset impairment and the fair value determination of equity investments, which were significant due to their complexity and the management's judgment involved [2][3] Group 2 - The company is responsible for preparing financial statements in accordance with accounting standards, ensuring they reflect a true and fair view of its financial position [4][5] - The management is tasked with assessing the company's ability to continue as a going concern and disclosing relevant matters [5] - The governance layer oversees the financial reporting process, ensuring compliance and accuracy [5] Group 3 - The financial statements are prepared based on the going concern assumption, and the company has adopted specific accounting policies and estimates relevant to its operations [8][9] - The company’s financial reporting is in compliance with the accounting standards issued by the Ministry of Finance, ensuring transparency and reliability [8][9] - The company’s functional currency is the US dollar, while the financial statements are presented in Renminbi [9] Group 4 - The company has established significant accounting policies regarding inventory, fixed assets, and financial instruments, ensuring accurate measurement and reporting [10][11] - The impairment of long-term assets and the valuation of equity investments are critical areas requiring significant management judgment [2][3] - The company employs a perpetual inventory system and measures inventory at the lower of cost or net realizable value [24]

Core Viewpoint - The company, Hua Hong Semiconductor Limited, is proposing amendments to its Articles of Association, which will be submitted for approval at the upcoming annual general meeting of shareholders [27]. Summary by Sections Proposed Amendments - The amendments are in accordance with the Companies Ordinance (Cap. 622) and the relevant adjustments of the Hong Kong Stock Exchange Listing Rules [27]. - The specific revisions include definitions for terms such as "Company Communications" and "Virtual Meeting Technology" [27][3]. Meeting Formats - The company will allow for shareholder meetings to be held in various formats, including physical, hybrid, and fully virtual meetings [4][6]. - The board of directors has the discretion to determine the format of the meetings based on applicable laws and regulations [4][6]. Shareholder Rights and Participation - Shareholders will have the right to participate in meetings either in person or through electronic means, ensuring accessibility [10][11]. - The company will ensure that adequate electronic facilities are available for virtual participation [10][11]. Notification and Communication - The company will provide notifications for meetings at least 21 days in advance for annual general meetings and 14 days for special meetings, as required by the relevant regulations [7][27]. - Notifications can be sent electronically or published on the company's website, which will be considered as valid delivery [19][26]. Effectiveness of Amendments - The proposed amendments will take effect only after being approved at the shareholders' annual general meeting [27]. - The revised Articles of Association will be disclosed on the Shanghai Stock Exchange website upon approval [27].

Group 1 - The company has three independent non-executive directors for the year 2024: Zhang Zutong, Wang Guishun, and Feng Songlin [1] - The independent non-executive directors conducted a self-assessment of their independence and confirmed compliance with the requirements of the "Management Measures for Independent Directors of Listed Companies" [1] - The board evaluated the independence of the independent non-executive directors and found no conflicts of interest or relationships that could affect their independent judgment [1] Group 2 - The independent non-executive directors have not held any positions other than their current roles and have no affiliations with major shareholders [1] - The independent non-executive directors maintained a high level of independence throughout 2024, fulfilling their responsibilities in accordance with relevant regulations and the company's articles of association [1] - Their independent opinions have contributed to the company's decision-making process [1]

Profit Distribution Plan - The company plans not to distribute profits for the fiscal year 2024, which includes no cash dividends, no bonus shares, and no capital reserve transfers, with remaining undistributed profits carried over to the next year [1][4] - The decision is based on the company's development stage, R&D investments, operational funding needs, and long-term strategic planning [2][4] Industry Context - The wafer foundry industry is characterized as technology, capital, and talent-intensive, requiring significant capital expenditures and talent investments, with high entry barriers [2] - Competitors in the industry invest heavily in new plant construction, capacity expansion, and product R&D, necessitating substantial funding for the company to maintain technological competitiveness [2] Company Development Stage - The company is currently in a capacity expansion phase, focusing on increasing supply capabilities and enhancing process R&D efforts [2] - The company aims to continuously improve operational management and achieve technological breakthroughs to solidify and enhance market share while maintaining reasonable profit margins [2] Financial Performance - For the fiscal year, the company achieved a total revenue of 1,438,830.77 million RMB and a net profit attributable to shareholders of 38,057.62 million RMB [2] - The company needs to reserve sufficient funds to meet R&D investments, business development, project construction, and working capital requirements to ensure stable operations and healthy growth [2][3] Use of Retained Earnings - The undistributed profits for 2024 will be accumulated for the next year to support production operations, R&D innovation, project construction, and equipment purchases [3] - The company will adhere to relevant laws and regulations while considering various factors related to profit distribution to better protect the long-term interests of all shareholders [3] Shareholder Communication - The company has established multiple channels for investor communication, allowing minority shareholders to express their opinions on cash dividend policies [5] - The company is committed to enhancing investor returns by focusing on improving competitiveness and leveraging existing resources to meet business growth demands [5] Decision-Making Process - The company's board of directors approved the profit distribution plan on March 27, 2025, and it will be submitted for approval at the annual general meeting [5]

Core Viewpoint - The board of directors of Huahong Semiconductor Limited convened a meeting to approve the audited financial statements for 2024, along with several other key reports and proposals, all of which will be submitted for shareholder approval at the upcoming annual general meeting [1][2][3][4][5][6][7]. Group 1: Financial Reports and Approvals - The board approved the 2024 audited financial statements with a unanimous vote of 9 in favor [1]. - The board also approved the 2024 annual report, which will be published on the Shanghai Stock Exchange and Hong Kong Stock Exchange websites [2]. - A special report on the use of raised funds for 2024 was approved, also with a unanimous vote [2]. Group 2: Governance and Organizational Changes - The board approved a special opinion on the independence of independent non-executive directors, with all votes in favor [3]. - The board approved the report on the performance of the audit committee for 2024, again with unanimous support [3]. - Amendments to the company's articles of association were approved, pending shareholder approval [3]. Group 3: Strategic Initiatives - The board approved the establishment of a market value management system [3]. - A "Quality Improvement and Efficiency Enhancement" action plan for 2025 was also approved [4]. - The board agreed to convene the annual general meeting and suspend the registration of share transfers for Hong Kong stocks [4]. Group 4: Financial Management and Shareholder Proposals - The board approved the provision for asset impairment for 2024, with unanimous support [5]. - The board approved the re-election of certain directors at the annual general meeting, pending shareholder approval [5][6]. - A general authorization for the repurchase of up to 10% of the company's issued Hong Kong shares was approved, subject to shareholder approval [5][6]. - A general authorization for the issuance of additional shares, not exceeding 20% of the issued Hong Kong shares, was also approved [6]. - The board approved the profit distribution plan for 2024, pending shareholder approval [7].

| | | 华虹半导体有限公司 董事会决议公告 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。 一、 董事会召开情况 华虹半导体有限公司（"公司"）董事会于 2025 年 3 月 27 日在香港尖沙咀 么地道 72 号千禧新世界香港酒店召开。会议应出席董事 9 人，实际出席董事 9 人。本次会议由董事长唐均君先生主持，会议的召集、召开、表决程序符合《香 港联合交易所有限公司证券上市规则》《上海证券交易所科创板股票上市规则》 和《华虹半导体有限公司之组织章程细则》的规定。 二、 董事会会议审议情况 （一）同意公司 2024 年经审计财务报表。 表决结果：9 票赞成，0 票反对，0 票弃权。 本议案尚需提交公司股东周年大会审议。 具体内容详见公司刊登于上海证券交易所网站（www.sse.com.cn）的《华虹 半导体有限公司 2024 年年度审计报告》及刊登于香港联合交易所有限公司（以 下简称"香港联交所"）网站（http://www.hkexnews.hk）的《截至二零二四年十 二月三十一日止年度全年业绩公告》。 （二）同意 ...