Investment Rating - The report maintains a "Buy" rating for Huahong Semiconductor (1347.HK) and Huahong Company (688347.CH) [1][2] Core Insights - Huahong's third-quarter gross margin exceeded market expectations, with a gross margin of 13.5%, up 2.1 percentage points year-on-year and 2.3 percentage points quarter-on-quarter [2] - The company expects fourth-quarter gross margins to remain stable compared to the third quarter, driven by tight capacity and rising wafer prices [1][2] - The revenue for the third quarter was $635 million, a 21% year-on-year increase and a 12% quarter-on-quarter increase, aligning with market expectations [2] - The report projects a target price of HKD 94.0 for Huahong Semiconductor, representing a potential upside of 17%, and a target price of RMB 150.0 for Huahong Company, representing a potential upside of 18% [1][2] Financial Performance Summary - Third-quarter revenue was $635 million, with a net profit of $25.72 million, down 43% year-on-year but up 224% quarter-on-quarter [9] - The company’s EBITDA for 2025 is projected at $758 million, with a net profit forecast of $89 million, reflecting a 53% increase from previous estimates [11] - The report provides a detailed financial forecast for 2023-2027, indicating a revenue growth rate of 19% for 2025 and 2026 [4][11] Valuation Metrics - The current EV/EBITDA and price-to-book ratios for Huahong are 24.4x and 2.7x, respectively, indicating attractive valuation levels [1][2] - The report assigns a target EV/EBITDA of 31.0x for 2025, supporting the target price of HKD 94.0 [2][12]
华虹半导体（01347）：华虹半导体（1347.HK）/华虹公司（688347.CH）：三季度毛利率优于