2 1 Shi Ji Jing Ji Bao Dao·2025-08-17 13:44Core Viewpoint - Huahong Company (688347.SH) is planning to issue shares and pay cash to acquire the controlling stake of Shanghai Huahong Microelectronics Co., Ltd. to resolve competition issues arising from its IPO commitments, with the stock suspension expected to last no more than 10 trading days starting August 18, 2025 [1][6][4]. Group 1: Transaction Details - The acquisition aims to address the competition issues related to the 65/55nm and 40nm process nodes where Huahong Company and Huahong Micro have overlapping business [6][10]. - The transaction is currently in the planning stage, with preliminary discussions held with potential transaction parties, including Shanghai Huahong (Group) Co., Ltd. and various investment funds [6][9]. - The acquisition is not expected to constitute a major asset restructuring and will not change the actual control of the company [6][9]. Group 2: Financial Performance - In Q2 2025, Huahong Company reported sales revenue of $566.1 million, a year-on-year increase of 18.3% and a quarter-on-quarter increase of 4.6% [12]. - The gross margin for Q2 was 10.9%, up 0.4 percentage points year-on-year and 1.7 percentage points quarter-on-quarter, with a net profit attributable to shareholders of $8 million, reflecting a 19.2% year-on-year increase [12]. - The company expects Q3 sales revenue to be between $620 million and $640 million, with a gross margin between 10% and 12% [12]. Group 3: Market Context - The global semiconductor market reached over $340 billion in the first half of the year, with a year-on-year growth of 18.9% [13]. - The logic semiconductor segment grew by 37%, while memory semiconductors increased by 20% in the same period [13]. - Huahong Company is positioned as a leading foundry in China, with a comprehensive layout in specialty process nodes and a diverse global customer base [13].