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Hua Hong Semiconductor Ltd. (HK:1347)
:1347
Hong Kong Market

Hua Hong Semiconductor Ltd. (1347) AI Stock Analysis

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HK

Hua Hong Semiconductor Ltd.

(1347)

Rating:56Neutral
Price Target:
HK$33.00
▲(4.10%Upside)
The overall score is primarily impacted by the company's strong balance sheet, which provides some financial stability. However, this is overshadowed by significant concerns including high valuation, declining profitability, and negative cash flow trends. Technical analysis presents a neutral outlook without strong momentum indicators.
Positive Factors
Capacity Expansion
Robust capacity expansion, such as the addition of a new 12-inch plant, is expected to double the company’s 12-inch capacity in 2025, driving future growth.
Domestic Demand
Hua Hong is anticipated to be a key beneficiary of increased domestic demand for chip fabrication, driven by ongoing geopolitical risks and policy uncertainties.
Geopolitical Impact
Hua Hong is expected to benefit from accelerated semiconductor localization amid rising geopolitical uncertainties, which could drive sector revaluation.
Negative Factors
Competition
Potential risks for Hua Hong include intensified competition in mature nodes from both global and domestic peers, as well as weak end-market demand.
Economic Uncertainty
Economic uncertainty is expected to continue, leading to persistent ASP pressure on mature-node foundries.
Price Pressure
Gross profit margin recovery is expected to be slower than anticipated due to ongoing average selling price pressure and increased depreciation costs from the ramp-up of new fabs.

Hua Hong Semiconductor Ltd. (1347) vs. iShares MSCI Hong Kong ETF (EWH)

Hua Hong Semiconductor Ltd. Business Overview & Revenue Model

Company DescriptionHua Hong Semiconductor Limited, an investment holding company, manufactures and sells semiconductor products. The company provides embedded non-volatile memory, standard logic and mixed-signal, radio frequency, power management integrated circuits, power discrete, and automotive solutions. It also offers foundry services; and design services comprising standard and customized IP development, full-custom layout design, and customer-specific integrated solutions, as well as design support and tape out services. In addition, the company provides multi-project wafer services; mask making services; and backend services, such as in-house testing, backside processing and dicing, and backend turnkey services, as well as wafer probing, assembly, and testing. Its products are used in consumer electronics, communications, computing, industrial, and automotive markets in the People's Republic of China, North America, Europe, Japan, and other Asian countries. The company was founded in 1997 and is headquartered in Shanghai, the People's Republic of China. Hua Hong Semiconductor Limited is a subsidiary of Shanghai Alliance Investment Ltd.
How the Company Makes MoneyHua Hong Semiconductor Ltd. generates revenue primarily through its foundry services, where it manufactures semiconductor wafers for its customers based on their proprietary designs. As a pure-play foundry, the company does not produce its own branded products but instead focuses on providing customized manufacturing solutions for semiconductor companies. Key revenue streams include wafer fabrication services and technological solutions tailored to the needs of its diverse client base. Significant partnerships with design companies and technology firms often contribute to its earnings, as Hua Hong collaborates closely with these partners to stay at the forefront of semiconductor manufacturing technology advancements.

Hua Hong Semiconductor Ltd. Financial Statement Overview

Summary
Hua Hong Semiconductor Ltd. shows strength in its balance sheet with a stable equity base and manageable debt levels. However, income statement metrics indicate declining profitability, with shrinking margins and revenue. Cash flow analysis highlights potential liquidity challenges due to negative free cash flow trends. The company should focus on improving operational efficiency and revenue generation to enhance overall financial health.
Income Statement
65
Positive
The income statement shows a decline in total revenue from 2022 to 2024, with a significant drop in gross profit margin from 34.07% in 2022 to 10.24% in 2024. The net profit margin also decreased from 18.17% in 2022 to 2.90% in 2024. This suggests a challenging environment with decreasing profitability, although the company has maintained positive net income.
Balance Sheet
78
Positive
The balance sheet is strong with a consistent increase in stockholders' equity from 2021 to 2024. The debt-to-equity ratio is manageable, showing prudent financial leverage. The equity ratio has improved, indicating a solid capital structure with 50.32% equity in total assets for 2024, enhancing financial stability.
Cash Flow
55
Neutral
Cash flow analysis reveals a negative free cash flow trend, with free cash flow worsening from -245 million in 2022 to -2.3 billion in 2024. This is concerning given the substantial capital expenditures. The operating cash flow has declined, which may affect liquidity if this trend continues.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
2.00B2.29B2.48B1.63B961.28M
Gross Profit
205.13M487.10M843.66M451.60M234.79M
EBIT
-123.96M220.50M536.40M309.62M49.05M
EBITDA
519.15M774.51M993.26M627.56M255.40M
Net Income Common Stockholders
58.11M280.03M449.91M261.48M33.31M
Balance SheetCash, Cash Equivalents and Short-Term Investments
4.46B5.59B2.01B1.61B922.79M
Total Assets
12.42B10.94B7.06B6.20B4.57B
Total Debt
2.22B2.12B1.93B1.61B587.82M
Net Debt
-2.24B-3.46B-81.08M-2.02M-334.97M
Total Liabilities
3.51B2.93B2.92B2.52B1.21B
Stockholders Equity
6.25B6.30B3.03B2.87B2.53B
Cash FlowFree Cash Flow
-2.32B-264.91M-245.32M-420.44M-818.15M
Operating Cash Flow
459.50M641.70M750.87M518.47M269.11M
Investing Cash Flow
-2.67B-833.31M-930.16M-863.06M-405.66M
Financing Cash Flow
1.15B3.78B672.18M1.01B540.43M

Hua Hong Semiconductor Ltd. Technical Analysis

Technical Analysis Sentiment
Positive
Last Price31.70
Price Trends
50DMA
32.57
Negative
100DMA
31.61
Positive
200DMA
25.91
Positive
Market Momentum
MACD
-0.39
Negative
RSI
52.36
Neutral
STOCH
65.66
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1347, the sentiment is Positive. The current price of 31.7 is above the 20-day moving average (MA) of 31.23, below the 50-day MA of 32.57, and above the 200-day MA of 25.91, indicating a neutral trend. The MACD of -0.39 indicates Negative momentum. The RSI at 52.36 is Neutral, neither overbought nor oversold. The STOCH value of 65.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1347.

Hua Hong Semiconductor Ltd. Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
62
Neutral
$11.80B10.31-7.45%2.91%7.43%-7.78%
56
Neutral
HK$63.26B268.190.42%0.52%-2.06%-83.44%
$331.44B5.52
8.33%
$4.74B25.119.53%0.61%
$8.65B22.3311.45%0.36%
70
Outperform
HK$2.53B14.9414.36%3.41%-4.04%2.92%
66
Neutral
HK$20.01B21.5425.73%168.87%150.80%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:1347
Hua Hong Semiconductor Ltd.
32.50
9.85
43.49%
IDCBF
Industrial and Commercial Bank of China
0.76
0.26
52.00%
SFDMF
Shanghai Fudan Microelectronics Group Co
2.32
0.69
42.33%
SNPTF
Sunny Optical Technology (Group) Co
8.29
2.39
40.51%
HK:1345
Shanghai Pioneer Holding Ltd
2.11
0.29
15.93%
HK:1415
Cowell e Holdings Inc.
24.40
4.10
20.20%

Hua Hong Semiconductor Ltd. Corporate Events

Hua Hong Semiconductor Successfully Passes AGM Resolutions
May 8, 2025

Hua Hong Semiconductor Ltd. announced that all resolutions proposed during their annual general meeting on May 8, 2025, were successfully passed by shareholders. This includes the re-election of directors and amendments to the Articles of Association, which may impact the company’s governance and operational strategies.

Hua Hong Semiconductor Reports Steady Growth Amid Industry Uncertainties
May 8, 2025

Hua Hong Semiconductor reported a revenue of $540.9 million for the first quarter of 2025, marking a 17.6% increase from the previous year. Despite a decline in net profit compared to the same quarter last year, the company has maintained steady growth and optimized its product portfolio. The company faces uncertainties due to global environmental changes and policies but plans to expand capacity, enhance R&D, and explore marketing opportunities to mitigate risks and improve performance.

Hua Hong Semiconductor Schedules Board Meeting to Review Q1 Financials
Apr 24, 2025

Hua Hong Semiconductor Ltd. has announced a board meeting scheduled for May 8, 2025, to discuss and approve the company’s unaudited financial results for the first quarter of 2025. This meeting is significant as it will provide insights into the company’s financial health and operational performance, potentially impacting investor confidence and market positioning.

Hua Hong Semiconductor Announces Annual General Meeting and Key Resolutions
Apr 8, 2025

Hua Hong Semiconductor Ltd. has announced its upcoming annual general meeting scheduled for May 8, 2025, in Hong Kong. The meeting will address several resolutions, including the adoption of financial statements, approval of a profit distribution plan, re-election of directors, and the reappointment of auditors. Additionally, the company seeks approval for share repurchase and issuance mandates, which could impact its market operations and shareholder value.

Hua Hong Semiconductor Proposes Amendments to Articles of Association
Mar 28, 2025

Hua Hong Semiconductor Ltd. has announced proposed amendments to its Articles of Association, aligning with upcoming changes in legal and regulatory requirements concerning treasury shares and shareholder communication. These amendments, subject to shareholder approval at the annual general meeting in May 2025, reflect the company’s efforts to stay compliant with the latest Companies Ordinance and Listing Rules.

Hua Hong Semiconductor Announces 2024 Annual Results
Mar 27, 2025

Hua Hong Semiconductor Ltd. has announced its audited annual results for the year ended December 31, 2024. The full text of the 2024 Annual Report will be available to shareholders and on relevant websites, indicating compliance with the Hong Kong Stock Exchange’s listing requirements. This announcement reflects the company’s commitment to transparency and regulatory adherence, potentially impacting stakeholders by providing insights into the company’s financial health and strategic direction.

Hua Hong Semiconductor Schedules Board Meeting for Key Financial Decisions
Mar 13, 2025

Hua Hong Semiconductor Ltd. has announced a board meeting scheduled for March 27, 2025, to discuss several key items, including the approval of the company’s audited consolidated results for the year ending December 31, 2024, potential dividend payments, and the planning of the annual general meeting. This meeting is significant for stakeholders as it will address the company’s financial performance and strategic decisions impacting its market positioning.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.