In a report released yesterday, Allen Chang from Goldman Sachs upgraded Hua Hong Semiconductor Ltd. to a Buy, with a price target of HK$68.10.
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Allen Chang has given his Buy rating due to a combination of factors influencing Hua Hong Semiconductor Ltd.’s growth prospects. The company is poised to benefit from expanding opportunities in AI applications, particularly in power management integrated circuits for data centers and matured node integrated circuits for edge AI devices. Additionally, there has been a notable improvement in pricing, supported by solid utilization rates over recent quarters.
Furthermore, Hua Hong is expected to experience sustainable long-term demand growth from an increasing number of domestic clients and the “China for China” production trend. The company is also scaling up its capacity with technology node migration, planning to enter the 28nm process by 2027. Despite trading at a 43x 2026 PE, which is within its historical range, the strong projected net income compound annual growth rate of 63% from 2025 to 2029 suggests potential for further valuation upside.