机构：第一上海 研究员：黄佳杰/曹凌霁/韩啸宇 本季盈利改善，指引积极:2Q25 收入5.66 亿美元，同比+18.3%，环比+4.6% ， 主要由于晶圆交付量增 长（同比+18% ，环比+6% ） ，毛利率10.9%，高于指引上限，主要由于稼动率环比提升，股东净利润 0.08 亿美元，同比+19.2%，环比+112.1%，基本每股盈利0.005 美元，同比+25%，环比+150%。净资产 收益率0.4%，同环比均持平。3Q25 指引积极：收入端6.2-6.4 亿美元，季度增速显著提升，毛利率10- 12%，较本季改善明显。 需求景气度持续，涨价逐季反映：本季三大核心工艺平台保持增长趋势。 嵌入式非易失存储收入同比+2.9%，环比+8.3%，主要为MCU 需求带动，下游工业及汽车客户仍有需求 拉动；功率器件收入同比+9.4%，环比+2.4%，增长驱动仍未超级结和MOSFET 产品，慢复苏趋势延 续；模拟及电源收入同比+59.3%,环比+17.8%，主要由BCD 平台电源管理芯片高景气度带动，公司已计 划调配产能以匹配需求，预计下半年BCD 平台产品仍将保持较高的收入同比增速；独立式非易失存储 收入同比+16. ...

Investment Rating - The report assigns a "Buy" rating for the company with a target price of HKD 54.00, representing a potential upside of 22.73% from the current stock price of HKD 44.00 [3][4]. Core Insights - The demand remains strong, with operational trends improving. The company is expected to maintain high utilization rates and stable growth in revenue and profits due to ongoing demand recovery and capacity expansion [4][6]. - The company has seen a significant improvement in its earnings, with a projected revenue increase of 22.7% in 2025 and 19.4% in 2026. The gross margin is expected to improve to 12.1% in 2025 and 16.1% in 2026 [5][6]. - The company is accelerating its capacity expansion, with the first batch of production capacity expected to reach 80-90% utilization by the end of this year and full capacity by mid-2026 [6][6]. Summary by Sections Financial Performance - For the fiscal year ending December 31, 2023, the company reported total revenue of USD 2.29 billion, a decrease of 7.7% from the previous year. However, projections indicate a recovery with revenues expected to reach USD 2.46 billion in 2025 and USD 2.94 billion in 2026 [5][17]. - The gross margin for 2023 was 21.3%, which is expected to decline to 10.2% in 2024 but recover to 12.1% in 2025 and 16.1% in 2026 [5][17]. - Shareholder net profit for 2023 was USD 280 million, with projections of USD 97 million in 2025 and USD 227 million in 2026, indicating a significant recovery trajectory [5][17]. Market Demand and Pricing - The company has experienced a positive trend in its core technology platforms, with embedded non-volatile memory revenue growing by 2.9% year-on-year and power device revenue increasing by 9.4% [6][6]. - The company has implemented price increases across its product lines, with expectations of single-digit price increases reflecting in the second half of the year [6][6]. Capacity Expansion - The company is on track to achieve 80-90% load for its new production capacity by the end of this year, with plans to reach full capacity by mid-2026 and initiate a second phase of capacity expansion by 2027 [6][6]. - The overall utilization rate for Q2 2025 was reported at 108.3%, marking a new high since 2023, indicating strong demand recovery across major technology platforms [6][6].

Investment Rating - The investment rating for the company is "Buy" (maintained) [2][5] Core Views - The company's revenue is expected to grow from 169.94 billion CNY in 2025 to 229.04 billion CNY in 2027, with year-on-year growth rates of 18.1%, 16.8%, and 15.4% respectively [5] - The company has shown continuous improvement in key operational metrics, with a significant increase in sales revenue and gross margin in Q2 2025, achieving a sales revenue of 566 million USD, which is an 18.3% year-on-year increase [4][5] - The company is focusing on enhancing its core competencies in product, process, R&D, and supply chain, leading to cost reduction and efficiency improvements [4] Financial Data and Valuation - The projected financial performance includes: - Revenue for 2025 is estimated at 16,994 million CNY, with a gross margin of 18.8% [5][6] - Net profit attributable to the parent company is expected to be 693 million CNY in 2025, reflecting an 82.1% year-on-year increase [5] - The company maintains a price-to-book (PB) ratio of 2.5 for 2025 [5] - The company has a total market capitalization of approximately 111.98 billion CNY and a circulating market capitalization of about 26.40 billion CNY [2]

Core Viewpoint - The company reported Q2 2025 revenue of $566.1 million, an increase of 18.3% year-on-year and 4.6% quarter-on-quarter, meeting guidance. The gross margin was 10.9%, exceeding previous guidance of 7-9% [1][20][21]. Group 1: Financial Performance - Q2 2025 revenue was $566.1 million, driven by increased shipment volumes. Gross margin improved to 10.9%, benefiting from higher capacity utilization and average selling price (ASP) increases, partially offset by rising depreciation costs [1][20][21]. - Net profit attributable to shareholders was $8 million, up 19.2% year-on-year and 112.1% quarter-on-quarter [1][21]. - Operating expenses were $97.9 million, an increase of 8.4% year-on-year, mainly due to rising R&D and depreciation costs [21]. Group 2: Revenue Breakdown - Embedded non-volatile memory platform revenue reached $141.2 million, up 3% year-on-year and 8.5% quarter-on-quarter [2][23]. - Power device revenue was $166.7 million, a 9.4% increase year-on-year, driven by demand for super junction MOSFETs [2][23]. - Revenue from analog and power management ICs surged 59.3% year-on-year to $161.2 million, driven by increased demand for power management integrated circuits [2][23]. Group 3: Future Guidance - Q3 2025 revenue guidance is set between $620 million and $640 million, with a midpoint indicating a 19.7% year-on-year increase and an 11.3% quarter-on-quarter increase, supported by growth in AI and automotive sectors [1][20][25]. - Gross margin for Q3 is expected to be between 10% and 12%, with visibility for Q4 remaining low but still within this range [25][34]. Group 4: Capacity and Production - The new 12-inch production line in Wuxi is expected to reach full capacity by mid-2026, with half of the capacity already online [1][20]. - By the end of 2025, the utilization rate of the new plant is projected to reach 80-90% [25][35]. Group 5: Market Strategy - The company aims to enhance its competitive position in the wafer foundry industry by focusing on core competencies in product, process, R&D, and supply chain management [20][28]. - The strategy includes collaboration with domestic and international strategic customers to expand its global customer base [20][28].

Investment Rating - The report assigns a "Buy" rating for the company with a target price of 76.88 CNY, based on a 3.0x PB valuation for 2025 [7][48]. Core Views - The report highlights three main factors supporting the long-term growth of the company: the potential for a new price increase cycle, the growth from the expansion of the 9th factory, and the acquisition of Huali Microelectronics enhancing overall competitiveness [2][3][4]. Summary by Sections Company Overview - The company, Huahong Semiconductor, is a leading specialty foundry in mainland China, focusing on embedded/non-volatile memory, power devices, analog and power management, and logic/RF technologies, with applications in emerging fields such as electric vehicles, green energy, and IoT [1][20]. Price Increase Cycle - The company is expected to initiate a new price increase cycle due to full production capacity and rising costs, with a capacity utilization rate of 102.7% in Q1 2025 and increasing market demand [2][25]. - The anticipated price increases in the wafer foundry industry are expected to enhance the company's profitability [2][28]. Expansion of the 9th Factory - The 9th factory is projected to generate a future revenue potential of 1.277 billion USD, with a monthly capacity of 83,000 wafers and a total investment of 6.7 billion USD [3][36]. - The factory is expected to be operational by December 2024, contributing significantly to revenue growth as it ramps up production [3][36]. Acquisition of Huali Microelectronics - The acquisition of Huali Microelectronics is expected to enhance the company's competitive edge, with plans to integrate Huali Micro into Huahong Semiconductor within three years of its IPO [4][39]. - Huali Micro is noted for its advanced 12-inch fully automated IC manufacturing line, which will bolster Huahong's production capabilities [4][39]. Financial Projections - Revenue projections for 2025, 2026, and 2027 are estimated at 17.2 billion, 20.4 billion, and 24.4 billion CNY, respectively, with net profits of 800.82 million, 1.286 billion, and 1.985 billion CNY [5][46]. - The company is expected to maintain a high capacity utilization rate of around 100% due to strong demand in sectors like new energy vehicles and AI hardware [46][48]. Valuation - The report suggests that the company is better suited for PB valuation due to its heavy asset nature and the impact of depreciation on short-term profits [48]. - The average PB for comparable companies is projected at 3.19 for 2025, with Huahong's target PB set at 3.0x, reflecting its leading position in specialty foundry technology [48][49].