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Hua Hong Semiconductor Ltd.
(1347)
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Rating:54Neutral
Price Target:
HK$66.00
â–¼(-46.25% Downside)
Action:Reiterated
Date:10/27/26
Overall score reflects a tension between improving operational outlook and weak underlying cash economics. The biggest drag is financial performance—particularly deeply negative free cash flow and still-pressured operating profit—alongside bearish technicals with the stock far below major moving averages. These are partly offset by a positive earnings-call picture (record revenue, margin improvement, and upbeat Q3 guidance), but valuation remains challenging with a very high P/E and no dividend yield support in the provided data.
Positive Factors
Broad platform growth
Growth across several specialty technology platforms reduces reliance on a single product category and demonstrates broad customer demand. Strength in memory, power, logic, RF and analog/PMIC supports a more resilient foundry mix and gives Hua Hong multiple avenues for sustained revenue expansion.
Negative Factors
Deeply negative free cash flow
Heavy capital spending is consuming more cash than operations generate, leaving the recovery not yet self-funding. Persistently negative free cash flow can increase reliance on borrowing or other financing and raises execution risk if utilization, pricing or demand fail to support the planned expansion.
Read all positive and negative factors
Positive Factors
Negative Factors
Broad platform growth
Growth across several specialty technology platforms reduces reliance on a single product category and demonstrates broad customer demand. Strength in memory, power, logic, RF and analog/PMIC supports a more resilient foundry mix and gives Hua Hong multiple avenues for sustained revenue expansion.
Read all positive factors
Hua Hong Semiconductor Ltd. (1347) vs. iShares MSCI Hong Kong ETF (EWH)
Market Cap
HK$155.75B
Dividend Yield0.81%
Average Volume (3M)19.24M
Price to Earnings (P/E)133.2
Beta (1Y)1.02
Revenue Growth24.54%
EPS Growth276.41%
CountryHK
Employees7,700
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.06
Shares Outstanding1,329,976,400
10 Day Avg. Volume25,276,990
30 Day Avg. Volume19,236,439
Financial Highlights & Ratios
PEG Ratio-34.91
Price to Book (P/B)2.55
Price to Sales (P/S)6.87
P/FCF Ratio-16.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
HK$164.15Price Target Upside33.67% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
EPS Forecast (FY)0.11
Revenue Forecast (FY)HK$3.05B
Hua Hong Semiconductor Ltd. Business Overview & Revenue Model
Company Description
Hua Hong Semiconductor Limited, an investment holding firm, specializes in the production and sale of semiconductor devices. Its comprehensive product range features a variety of integrated circuits, including embedded non-volatile memory, standar...
How the Company Makes Money
Hua Hong Semiconductor primarily makes money by providing contract semiconductor manufacturing (foundry) services. Its core revenue model is to fabricate customers’ integrated circuit designs on silicon wafers using the company’s process technolog...
Hua Hong Semiconductor Ltd. Earnings Call Summary
Earnings Call Date:Aug 26, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call communicated a strong operational and financial improvement: record revenue, meaningful margin expansion, broad-based product and geographic growth, a return to profitability, robust operating cash generation, clear capacity expansion plans and an approved acquisition that should add scale and synergies. Challenges are present but manageable — notably higher operating and financing costs, heavy near-term capital spending, some supply/equipment tightness and limited short-term capacity fungibility. On balance the positive developments materially outweigh the negatives.Positive Updates
Record Revenue and Strong Top-Line Growth
Revenue reached a record high of $717.5M in Q2 2026, up 26.8% year-over-year and 8.6% sequentially (Q1 2026).
Negative Updates
Decline in Other Income and Higher Finance Costs
Other income, net was $2.2M, down 79.4% YoY, primarily due to increased finance costs and decreased government subsidies; other loss, net was $2.4M.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Revenue and Strong Top-Line Growth
Revenue reached a record high of $717.5M in Q2 2026, up 26.8% year-over-year and 8.6% sequentially (Q1 2026).
Read all positive updates
Company Guidance
Hua Hong Grace guided Q3 2026 revenue of $770–780 million with a projected gross margin of 16%–18%; management said about 60% of the expected revenue uplift will come from ASP improvement and ~40% from volume, supported by Fab 9A ramping to full loading in Q3 (output rolling into Q4/2026–2027) and ongoing equipment installs in the next 12‑inch line. Longer‑term capacity plans include a third 12‑inch fab targeting ~55,000 wafer starts and roughly $6 billion CapEx over three years (≈$1.5–2.0 billion/year); depreciation guidance for H2 2026 was roughly $55M for 8‑inch, ~$250M for the first 12‑inch fab, ~$210M for the second 12‑inch fab and about $30M for Huali Micro (Huali annual depreciation ~ $50–60M). Product drivers called out for Q3 are continued double‑digit strength in embedded non‑volatile memory and very strong stand‑alone non‑volatile memory, robust MCU growth, strength in low‑voltage MOSFETs and power/PMIC and momentum in RF/logic.Hua Hong Semiconductor Ltd. Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
71
Positive
Cash Flow
38
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.69B | 2.40B | 2.00B | 2.29B | 2.48B | 1.63B |
| Gross Profit | 465.06M | 343.65M | 205.13M | 487.10M | 843.66M | 451.60M |
| EBITDA | 588.09M | 650.22M | 400.06M | 774.51M | 993.26M | 627.56M |
| Net Income | 101.25M | 52.47M | 58.11M | 280.03M | 449.91M | 261.48M |
Balance Sheet | ||||||
| Total Assets | 15.23B | 14.33B | 12.42B | 10.94B | 7.06B | 6.20B |
| Cash, Cash Equivalents and Short-Term Investments | 4.53B | 5.05B | 4.46B | 5.59B | 2.01B | 1.61B |
| Total Debt | 4.20B | 3.83B | 2.22B | 2.12B | 1.93B | 1.61B |
| Total Liabilities | 5.53B | 5.30B | 3.51B | 2.93B | 2.92B | 2.52B |
| Stockholders Equity | 7.14B | 6.46B | 6.25B | 6.30B | 3.03B | 2.87B |
Cash Flow | ||||||
| Free Cash Flow | -1.19B | -1.03B | -2.32B | -264.91M | -245.32M | -420.44M |
| Operating Cash Flow | 998.27M | 770.43M | 459.50M | 641.70M | 750.87M | 518.47M |
| Investing Cash Flow | -2.19B | -1.89B | -2.67B | -833.31M | -930.16M | -863.06M |
| Financing Cash Flow | 1.68B | 1.46B | 1.15B | 3.78B | 672.18M | 1.01B |
Hua Hong Semiconductor Ltd. Technical Analysis
Negative
122.80
Price Trends
101.56
Negative
129.18
Negative
117.68
Negative
Market Momentum
-12.06
Positive
25.14
Positive
24.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1347, the sentiment is Negative. The current price of 122.8 is above the 20-day moving average (MA) of 83.91, above the 50-day MA of 101.56, and above the 200-day MA of 117.68, indicating a bearish trend. The MACD of -12.06 indicates Positive momentum. The RSI at 25.14 is Positive, neither overbought nor oversold. The STOCH value of 24.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1347.
Hua Hong Semiconductor Ltd. Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | HK$1.38B | 6.22 | 8.41% | 5.29% | 6.61% | -46.73% | |
58 Neutral | HK$35.24B | 39.11 | 14.45% | 0.31% | 21.04% | 115.77% | |
56 Neutral | HK$44.04B | 18.82 | 13.06% | 2.00% | 21.38% | 414.20% | |
54 Neutral | HK$155.75B | 133.18 | 1.53% | 0.81% | 24.54% | 276.41% | |
48 Neutral | HK$549.17B | 115.82 | 4.64% | ― | 19.55% | 75.30% |
* Technology Sector Average
HK:1347
Hua Hong Semiconductor Ltd.
60.70
-19.05
-23.89%
HK:0522
ASMPT Ltd
105.00
24.01
29.64%
HK:1385
Shanghai Fudan Microelectronics Group Co
21.62
-20.60
-48.79%
HK:0981
Semiconductor Manufacturing International
42.98
-32.02
-42.69%
HK:0085
China Electronics Huada Technology Company Limited
0.68
-0.75
-52.41%
HK:1304
Fortior Technology (Shenzhen) Co., Ltd. Class H
106.50
-50.53
-32.18%
Hua Hong Semiconductor Ltd. Corporate Events
Hua Hong Grace Semiconductor Wins Shareholder Backing for New Option Scheme
Oct 22, 2026
Hua Hong Grace Semiconductor Limited has secured shareholder approval at its extraordinary general meeting on 22 October 2026 for a new share option scheme, subject to final regulatory clearances from Shanghai’s State-owned Assets Supervisio...
Hua Hong Grace Raises 2026 Sales Cap and Formalizes Equipment Lease With Huahong Group
Oct 21, 2026
Hua Hong Grace Semiconductor Limited, a Hong Kong-incorporated semiconductor maker under stock code 01347, generates a meaningful portion of its revenue from sales and equipment transactions with Huahong Group affiliates. These related-party deali...
Hua Hong Grace Schedules Board Meeting to Approve Q3 Results
Oct 21, 2026
Hua Hong Grace Semiconductor Limited has scheduled a board meeting for 5 November 2026 in order to review and approve the publication of its unaudited third-quarter results for the period from 1 July to 30 September 2026.The announcement signals f...
Hua Hong Grace Semiconductor Reshuffles Board With New Non-Executive Director
Oct 16, 2026
Hua Hong Grace Semiconductor Limited announced board changes effective 16 October 2026, appointing Executive Vice President Yimin Chen as a non-executive director while confirming her continuing roles within the group’s Shanghai and Wuxi sem...
Hua Hong Grace Semiconductor Outlines Board and Committee Structure
Oct 16, 2026
Hua Hong Grace Semiconductor Limited has detailed the composition of its board of directors, led by executive director Peng Bai, who serves as chairman and president. The board includes non-executive and independent non-executive directors, unders...
Hua Hong Grace Seeks Shareholder Nod for New Option Scheme and 2026 Grants
Sep 29, 2026
Hua Hong Grace Semiconductor Limited has called an extraordinary general meeting for 22 October 2026 to seek shareholder approval for a new share option scheme. The hybrid meeting, held in Shanghai and online, will consider authorizing directors t...
Hua Hong Grace Semiconductor Clarifies Redemption Terms for Wuxi JV III
Sep 29, 2026
Hua Hong Grace Semiconductor Limited has issued a supplemental announcement clarifying the terms of a previously disclosed joint venture in Wuxi, known as Wuxi JV III, involving an investment by a CDB-related entity. The clarification details a Ri...
Hua Hong Grace Wins Strong Shareholder Backing for Wuxi JV III Funding Shift
Sep 23, 2026
Shareholders of Hua Hong Grace Semiconductor Limited have overwhelmingly approved changes to the planned use of proceeds from a previous RMB share issue, reallocating surplus funds to the Wuxi JV III Investment Project. The company also secured sh...
Hua Hong Grace Semiconductor Closes RMB8.27 Billion Share-Financed Acquisition
Sep 11, 2026
Hua Hong Grace Semiconductor has completed a major and connected transaction to acquire full ownership of a target company, turning it into a wholly owned subsidiary. The deal, valued at approximately RMB8.27 billion, was settled via the issuance ...
Hua Hong Grace Calls Hybrid EGM to Redirect RMB Share Proceeds to Wuxi JV III
Sep 4, 2026
Hua Hong Grace Semiconductor Limited has called an extraordinary general meeting for 23 September 2026, to be held in hybrid format in Shanghai and online, enabling both registered and certain non-registered shareholders to attend, vote and submit...
Hua Hong Grace Sets September EGM and Book Closure for JV-Related Vote
Sep 3, 2026
Hua Hong Grace Semiconductor Limited has scheduled an extraordinary general meeting for 23 September 2026 at 2:30 p.m., with 23 September set as the record date for shareholders’ entitlement to attend and vote. To facilitate this, the compan...
Hua Hong Grace to Lead US$4.17 Billion Wuxi Wafer JV with Majority Stake
Sep 1, 2026
Hua Hong Grace Semiconductor Limited has agreed with HHGrace Shanghai, Wuxi municipal authorities, Hua Xin Fund and a CDB-affiliated entity to inject more than US$4.17 billion into Wuxi JV III, converting it into a joint venture. The capital will ...
Hua Hong Grace Semiconductor Posts 2026 Interim Results and Highlights Cross-Border Listing Structure
Aug 26, 2026
Hua Hong Grace Semiconductor Limited has released its unaudited consolidated interim results for the six months ended 30 June 2026, fulfilling disclosure requirements of the Hong Kong Listing Rules. The full interim report will be distributed in p...
Hua Hong Grace Posts Record Q2 as AI Demand and Huali Deal Lift Outlook
Aug 13, 2026
Hua Hong Grace Semiconductor Limited reported a strong second quarter of 2026, with revenue reaching a record U.S.$717.5 million, up 26.8% year-on-year and 8.6% sequentially, and gross margin improving to 16.5%. Net profit attributable to sharehol...
Hua Hong Grace Semiconductor Updates Corporate Logo Without Impacting Shareholders
Aug 13, 2026
Hua Hong Grace Semiconductor Limited has adopted a new corporate logo, which will appear on all key company documents and its website from the announcement date. The move refreshes the company’s visual identity without altering its corporate...
Hua Hong Grace Semiconductor Sets Board Meeting to Approve Interim Results
Aug 12, 2026
Hua Hong Grace Semiconductor Limited has scheduled a board meeting for 26 August 2026 to review and approve the publication of its unaudited interim results for the six months ended 30 June 2026. The session will also address other corporate matte...
Hua Hong Grace Schedules Board Meeting to Approve Q2 Results
Jul 30, 2026
Hua Hong Grace Semiconductor Limited, a Hong Kong-incorporated semiconductor manufacturer with key operations in Shanghai, provides foundry and related chip production services to customers across various electronics and industrial markets. The co...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.