baccaratpapillon| Bank of America Securities: Reiterates that Huahong Semiconductor's "underperformance" rating target price has been reduced to HK$12

Date: 3个月前 (04-24)View: 31Comments: 0

baccaratpapillon| Bank of America Securities: Reiterates that Huahong Semiconductor's "underperformance" rating target price has been reduced to HK

Bank of America Securities released a research report sayingBaccaratpapillonTo reiterate Huahong Semiconductor's (01347) "outperform" rating, with a target price of 13.Baccaratpapillon.5 Hong Kong dollars fell to 12 Hong Kong dollars. The bank said that compared with the market, they are more cautious about Huahong's 2025 profits.BaccaratpapillonHis attitude. Management directs that capacity utilization and average selling prices will recover in the second half of this year.

The bank said the market expects its profit margin to improve further in 2025, with gross profit and operating profit rebounding from 12 per cent and 2 per cent in 2024 to 20 per cent and 9 per cent respectively, while the bank forecasts 14 per cent and 0 per cent respectively. The bank's conservative investment theory is mainly due to the extremely high inventory level of fabless semiconductor companies in the mainland, which is believed to hinder the immediate recovery of semiconductor wafer prices, as well as Huahong's plan to open a new factory in the fourth quarter of this year, this will lead to additional depreciation and initial costs and limit the recovery of profit margins in 2025.

Due to the localization demand for semiconductors and the focus on mature processes, it is expected that more new capacity will be put into the mainland chip contract market from 2025 to 2026, the report added. The bank estimates that mature process chip production capacity will grow at an average annual compound growth rate of 19% between 2024 and 2026, and pricing is expected to be suppressed by increased competition.

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