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华虹半导体：3Q24预览：盈利修复步入正轨
01347HUA HONG SEMI(01347) 华兴证券香港·2024-10-24 06:39

Investment Rating - The report maintains a "Buy" rating for Huahong Semiconductor with a target price of HK29.00,representingapotentialupsideof2229.00, representing a potential upside of 22% from the current price of HK23.70 [1][4]. Core Views - The report indicates that Huahong Semiconductor is on a path to recovery in profitability, with expectations of revenue growth driven by a gradual recovery in demand and price increases [1][2]. - The forecast for 3Q24 includes a revenue increase of 9% quarter-on-quarter to US522million,withagrossmarginof11.8522 million, with a gross margin of 11.8% [1][2]. - The semiconductor industry is experiencing a slow recovery, particularly in consumer electronics, which is expected to be a key driver for Huahong's performance [1][2]. Summary by Sections Investment Rating - The investment rating is "Buy" with a target price of HK29.00, reflecting a 1.0x P/B for 2024 [1][4]. Financial Forecasts - Revenue for 2024 is projected at US2,036million,withayear−on−yeardeclineof112,036 million, with a year-on-year decline of 11% [2]. - Gross profit is expected to be US220 million, with a gross margin of 11% [2]. - Net profit attributable to shareholders is forecasted at US122million,reflectinga57122 million, reflecting a 57% decline year-on-year [2]. Quarterly Projections - For 3Q24, revenue is expected to reach US522 million, with a gross margin of 12% [3]. - The report anticipates a gradual improvement in operating profit, projecting a loss of US40millionfor3Q24,improvingtoalossofUS40 million for 3Q24, improving to a loss of US29 million in 4Q24 [3]. Valuation - The report adjusts the target P/B from 0.8x to 1.0x for 2024, indicating a potential revaluation based on expected recovery in demand and profitability [4][5]. - The estimated book value per share for 2024 is adjusted to US3.69,supportingthetargetpriceofHK3.69, supporting the target price of HK29.00 [5]. Industry Context - The semiconductor industry is facing challenges, including competition in traditional processes and high capital expenditures, which may impact long-term ROE [4][6]. - The report highlights that Huahong's stock has increased by 28% year-to-date, outperforming the Hang Seng Index, yet remains below its book value [1][4].