HUA HONG SEMI(SH:688347) 2 1 Shi Ji Jing Ji Bao Dao·2025-08-17 15:13Core Viewpoint - Huahong Semiconductor is planning to acquire the controlling stake of Shanghai Huahong Microelectronics to resolve competition issues related to its IPO, with the transaction expected to be completed within 10 trading days [1][6][7]. Group 1: Acquisition Details - The acquisition involves issuing shares and cash to purchase the controlling stake of Shanghai Huahong Microelectronics, which operates assets that compete with Huahong in the 65/55nm and 40nm nodes [6][7]. - The transaction is not expected to constitute a major asset restructuring and will not change the actual controller of the company [6][7]. - The targeted assets are currently in the process of being separated, and the company is in discussions with potential transaction parties [6][7]. Group 2: Financial Performance - In Q2 2025, Huahong reported sales revenue of $566.1 million, a year-on-year increase of 18.3% and a quarter-on-quarter increase of 4.6% [10]. - The gross margin for Q2 was 10.9%, up 0.4 percentage points year-on-year and 1.7 percentage points quarter-on-quarter [10]. - The company expects Q3 sales revenue to be between $620 million and $640 million, with a gross margin between 10% and 12% [10]. Group 3: Market Position and Stock Performance - Huahong's stock price has increased approximately 70% year-to-date, with a notable rise of 11.35% on August 15, closing at 78.5 yuan per share, giving it a market capitalization of 93.6 billion yuan [9]. - The company has achieved a capacity utilization rate of 108.3% in Q2, marking an increase from 102.7% in Q1 and 97.9% in Q2 of the previous year [12]. - Huahong is recognized as a leading foundry in China, with a comprehensive layout in specialty process nodes and a diverse global customer base [12]. Group 4: Industry Context - The global semiconductor market reached over $340 billion in the first half of the year, reflecting 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].