Investment Rating - The report maintains a "Buy" rating for the company [2][3]. Core Views - The company is expected to see a gradual recovery in performance driven by an increase in average selling prices (ASP) and improved demand in the semiconductor sector [2]. - The second quarter of 2024 showed a revenue of $479 million, a year-on-year decline of 24%, but a quarter-on-quarter increase of 4%, slightly above the company's guidance [2]. - The gross margin for Q2 2024 was 10.5%, exceeding the upper limit of the guidance range of 6%-10% and the market expectation of 9.1% [2]. - The company anticipates a continued increase in ASP and production capacity utilization, which will support margin recovery in the latter half of 2024 and into 2025 [2]. Summary by Relevant Sections Financial Performance - Q2 2024 revenue was $479 million, down 24% year-on-year but up 4% quarter-on-quarter, slightly above the guidance range [2]. - The gross margin was 10.5%, down 17.2 percentage points year-on-year but up 4.1 percentage points quarter-on-quarter [2]. - Net profit for Q2 2024 was $6.67 million, a decline of 91.5% year-on-year and 79% quarter-on-quarter, below market expectations [2]. Market Demand and Capacity Utilization - Signs of market demand stabilization are emerging, with full capacity utilization and an expected increase in ASP following a bottoming out in Q2 2024 [2]. - The company reported a wafer shipment volume of 1.106 million (equivalent to 8-inch wafers) in Q2 2024, a year-on-year increase of 3% and a quarter-on-quarter increase of 8% [2]. - Overall capacity utilization was 97.9%, down 4.8 percentage points year-on-year but up 6.2 percentage points quarter-on-quarter [2]. Future Outlook - The company has provided a conservative guidance for Q3 2024, expecting revenue between $500 million and $520 million, which is below market expectations [2]. - The guidance for Q3 2024 gross margin is set at 10%-12%, with a midpoint indicating a slight increase from Q2 2024 [2]. - The second 12-inch production line is expected to enter trial production by the end of 2024, with full capacity release anticipated by the end of 2025 [2]. Earnings Forecast and Valuation - The net profit forecasts for 2024-2026 have been revised down to $10.8 million, $20.7 million, and $26.2 million, respectively, reflecting a significant reduction compared to previous estimates [2]. - The current stock price of HKD 18.08 corresponds to a PE ratio of 37x for 2024 and 19x for 2025, with a PB ratio of 0.6x, indicating a low valuation relative to historical levels [2].
华虹半导体：2024年二季度业绩点评：3Q24业绩指引保守，看好ASP提升驱动后续业绩持续改善