Investment Rating - The investment rating for Huahong Semiconductor (01347.HK) is "Outperform" [3][7]. Core Views - The company reported slightly better-than-expected performance in Q3 2024, with revenue of $526.3 million, a year-over-year decrease of 7.4% but a quarter-over-quarter increase of 10.0%. The gross margin was 12.2%, also slightly above guidance [1][3]. - The company expects revenue for Q4 2024 to grow sequentially, with a forecast of approximately $530-540 million and a gross margin of 11%-13% [1][3]. - Capacity utilization continues to improve, reaching 105.3% in Q3 2024, with wafer shipments increasing by 8.5% quarter-over-quarter [1][3]. Summary by Sections Financial Performance - Q3 2024 sales revenue was $526.3 million, slightly exceeding guidance of $500-520 million. The gross margin was 12.2%, above the expected range of 10%-12% [1]. - The company’s wafer delivery volume increased to 1,200 thousand wafers (equivalent to 8-inch), marking a year-over-year increase of 11.4% and a quarter-over-quarter increase of 8.5% [1][2]. Capacity and Production - As of the end of Q3 2024, the monthly capacity was equivalent to 391,000 8-inch wafers, with a capacity utilization rate of 105.3% [1]. - The company is progressing with its second phase of the Wuxi project, which has a planned capacity of 83,000 wafers per month and a total investment of $6.7 billion [1][2]. Market Demand - Demand from consumer electronics, industrial, automotive, and communications sectors is growing, with revenue from these segments increasing by 10.9%, 11.9%, and 10.9% respectively [1]. - Revenue from logic and RF, analog, and independent non-volatile memory segments grew by over 20% quarter-over-quarter, indicating strong demand [1]. Capital Expenditure - Capital expenditure for Q3 2024 was $734 million, with significant investments in various projects including $618 million for Huahong Manufacturing [1][2]. Profitability Forecast - The company’s net profit forecasts for 2024-2026 are $107 million, $170 million, and $295 million respectively, with a slight adjustment in capacity predictions and expense ratios [1][2].
华虹半导体：3Q24业绩略超指引，产能利用率持续提升