Hua Hong Semiconductor Ltd. (1347) AI Stock Analysis

• Market Cap: HK$143.06B
• Dividend Yield: 0.23%
• Average Volume (3M): 54.45M
• Price to Earnings (P/E): 2396.7
• Beta (1Y): 1.61
• Revenue Growth: 19.15%
• EPS Growth: -94.32%
• Country: HK
• Employees: 7,487
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.12
• Shares Outstanding: 1,328,249,500
• 10 Day Avg. Volume: 69,264,425
• 30 Day Avg. Volume: 54,449,277
• PEG Ratio: -1.00
• Price to Book (P/B): 0.77
• Price to Sales (P/S): 2.39
• P/FCF Ratio: -2.06
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: HK$92.01
• Price Target Upside: 36.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 51 Neutral
• Price Target: HK$70.00 ▲(4.01% Upside)

Hua Hong Semiconductor Ltd. has a moderate overall stock score of 51. The most significant factor is the financial performance, which highlights challenges in profitability and cash flow management. Technical analysis shows mixed signals, with bearish momentum but no oversold indicators. The valuation is a concern due to an extremely high P/E ratio. The earnings call provided some positive strategic insights but was overshadowed by a net loss and increased expenses.

Positive Factors

Revenue Growth

The significant year-over-year revenue growth indicates strong market demand and effective sales strategies, positioning the company well for sustained expansion in the semiconductor industry.

Technological Advancements

Continuous technological advancements enhance Hua Hong's competitive edge, supporting long-term growth and adaptation in the rapidly evolving semiconductor market.

Strong Demand in Key Markets

Strong demand in China, a critical market, underscores Hua Hong's robust market position and potential for continued revenue growth as the region's semiconductor needs expand.

Negative Factors

Net Loss for the Period

The net loss indicates challenges in cost management and profitability, which could hinder financial stability and growth if not addressed.

Increased Operating Expenses

Rising operating expenses can pressure margins and profitability, necessitating efficiency improvements to sustain long-term financial health.

Cash Flow Challenges

Persistent cash flow issues limit Hua Hong's ability to invest in growth opportunities and maintain operational flexibility, impacting long-term viability.

Hua Hong Semiconductor Ltd. Business Overview & Revenue Model

Company Description

Hua Hong Semiconductor Ltd. (1347) is a leading semiconductor foundry based in China, specializing in the manufacturing of integrated circuits (ICs) for a wide range of applications, including consumer electronics, automotive, and industrial sectors. The company focuses on advanced process technologies, offering a portfolio of services that includes wafer fabrication, design support, and technology transfer. With a commitment to innovation and quality, Hua Hong Semiconductor plays a pivotal role in the global supply chain for semiconductor components.

How the Company Makes Money

Hua Hong Semiconductor generates revenue primarily through its foundry services, which involve manufacturing custom silicon wafers for clients in various industries. The company's key revenue streams include the production of analog, mixed-signal, and power semiconductor devices, which are crucial for modern electronic products. Additionally, Hua Hong Semiconductor benefits from long-term contracts with major technology firms, providing a stable income base. The company also engages in partnerships with tech companies for joint development projects, enhancing its technological capabilities and market reach. Factors contributing to its earnings include the growing demand for semiconductors driven by trends like IoT, automotive electronics, and 5G technology, as well as its ability to maintain competitive pricing and high production efficiency.

Hua Hong Semiconductor Ltd. Financial Statement Overview

Summary

Hua Hong Semiconductor Ltd. faces challenges in profitability and cash flow management, despite a stable balance sheet. The income statement shows modest revenue growth but struggles with profitability, as indicated by a negative EBIT margin and low net profit margin. The balance sheet is stable with manageable debt levels, but the low return on equity suggests inefficiency. Cash flow issues are evident with negative free cash flow and a low coverage ratio.

Income Statement

Hua Hong Semiconductor Ltd. shows a mixed performance in its income statement. The TTM data indicates a modest revenue growth rate of 4.78%, but the company is struggling with profitability, as evidenced by a negative EBIT margin of -7.77%. The net profit margin is low at 2.90%, reflecting challenges in converting revenue into profit. Historical data shows declining gross profit margins and fluctuating revenue growth, indicating potential instability in revenue streams.

Balance Sheet

The balance sheet presents a stable financial structure with a moderate debt-to-equity ratio of 0.36, suggesting manageable leverage. However, the return on equity is low at 0.47%, indicating limited efficiency in generating returns from equity. The equity ratio stands at 51.50%, showing a solid equity base relative to total assets, which is a positive sign of financial stability.

Cash Flow

Cash flow analysis reveals significant challenges, with negative free cash flow and a concerning free cash flow to net income ratio of -4.84. Although operating cash flow is positive, the coverage ratio of 0.35 suggests limited capacity to cover net income. The free cash flow growth rate is slightly positive at 5.30% TTM, but historical volatility in free cash flow growth indicates potential cash flow management issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.18B	2.00B	2.29B	2.48B	1.63B	961.28M
Gross Profit	237.38M	205.13M	487.10M	843.66M	451.60M	234.79M
EBITDA	498.43M	385.01M	774.51M	993.26M	627.56M	255.40M
Net Income	29.99M	58.11M	280.03M	449.91M	261.48M	99.44M
Balance Sheet
Total Assets	12.24B	12.42B	10.94B	7.06B	6.20B	4.57B
Cash, Cash Equivalents and Short-Term Investments	3.85B	4.46B	5.59B	2.01B	1.61B	922.79M
Total Debt	2.30B	2.22B	2.12B	1.93B	1.61B	587.82M
Total Liabilities	3.36B	3.51B	2.93B	2.92B	2.52B	1.21B
Stockholders Equity	6.11B	6.25B	6.30B	3.03B	2.87B	2.53B
Cash Flow
Free Cash Flow	-4.10B	-2.32B	-264.91M	-245.32M	-420.44M	-818.15M
Operating Cash Flow	1.89B	459.50M	641.70M	750.87M	518.47M	269.11M
Investing Cash Flow	-5.91B	-2.67B	-833.31M	-930.16M	-863.06M	-405.66M
Financing Cash Flow	-187.21M	1.15B	3.78B	672.18M	1.01B	540.43M

Hua Hong Semiconductor Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 67.30
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1347, the sentiment is Neutral. The current price of 67.3 is below the 20-day moving average (MA) of 74.45, below the 50-day MA of 78.02, and above the 200-day MA of 49.27, indicating a neutral trend. The MACD of -1.10 indicates Positive momentum. The RSI at 37.98 is Neutral, neither overbought nor oversold. The STOCH value of 14.53 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:1347.

Hua Hong Semiconductor Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
0085	61 Neutral	HK$2.66B	6.38	17.96%	6.87%	-18.35%	-6.00%
1385	59 Neutral	HK$48.53B	64.93	7.85%	0.22%	12.62%	-4.75%
0522	58 Neutral	HK$32.88B	133.75	1.55%	0.65%	-0.64%	-39.74%
2878	56 Neutral	€1.10B	21.26	4.98%	―	-25.16%	-51.97%
1347	51 Neutral	HK$143.06B	2,396.67	0.12%	0.23%	19.15%	-94.32%
8490	41 Neutral	HK$83.25M	-1.10	-41.46%	―	-26.02%	-4977.27%

Hua Hong Semiconductor Ltd. Corporate Events

Hua Hong Semiconductor Updates on Major Acquisition and Fundraising Plans

Hua Hong Semiconductor Ltd. has announced ongoing negotiations regarding a major acquisition and a proposed non-public issuance of RMB shares to raise ancillary funds. The company is preparing detailed financial information and reports to be included in a forthcoming circular, with further updates to be provided as necessary. The completion of these transactions is contingent upon certain conditions, including shareholder approvals and regulatory waivers, which may impact the company’s strategic positioning and stakeholder interests.

Hua Hong Semiconductor Achieves Record Revenue Amidst Global Semiconductor Demand Recovery

Hua Hong Semiconductor reported a record revenue of $635.2 million for the third quarter of 2025, marking a 20.7% increase from the previous year. Despite a 42.6% decrease in net profit compared to the same quarter last year, the company showed significant quarter-on-quarter improvement. The company attributes its success to the recovery in global semiconductor demand and its efficient management practices. Hua Hong is also working on an acquisition to boost production capacity and diversify its process platform, aiming to enhance profitability and competitiveness in the global market.

Hua Hong Semiconductor Announces Board Composition

Hua Hong Semiconductor Ltd. has announced the composition of its board of directors, detailing the roles and functions of each member. This update provides clarity on the leadership structure and committee memberships, which is crucial for stakeholders to understand the governance and strategic direction of the company.

Hua Hong Semiconductor Announces Leadership Changes

Hua Hong Semiconductor Ltd. has announced significant leadership changes effective October 31, 2025. Mr. Peng Bai has been appointed as the new chairman of the board, chairman of the nomination committee, and authorized representative, succeeding Mr. Junjun Tang, who has resigned from these roles. The company believes that Mr. Bai’s combined role as chairman and president will enhance strategic execution and communication within the board.

Hua Hong Semiconductor to Review Q3 Financials in Upcoming Board Meeting

Hua Hong Semiconductor Limited has announced that its board of directors will hold a meeting on November 6, 2025, to review and approve the company’s unaudited financial results for the third quarter of 2025. This meeting is crucial as it will provide insights into the company’s financial performance and potentially impact its market positioning and stakeholder confidence.

Hua Hong Semiconductor Updates on Major Acquisition and Fundraising Plans

Hua Hong Semiconductor Ltd. has announced a monthly update regarding its major and connected transaction, which includes a proposed acquisition and a non-public issuance of RMB shares to raise ancillary funds. The company is currently negotiating the terms of the acquisition and preparing necessary documentation, with a delay in the dispatch of the circular approved until December 31, 2025. The completion of these transactions is contingent upon certain conditions, including shareholder approval, and may not proceed if these conditions are not met.

Hua Hong Semiconductor Appoints Financial Adviser for Proposed Acquisition

Hua Hong Semiconductor Limited has appointed Innovax Capital Limited as the Hong Kong Independent Financial Adviser to guide the Independent Board Committee and shareholders on the fairness and reasonableness of a Proposed Acquisition and related mandates. This strategic move is expected to ensure informed decision-making for stakeholders and potentially strengthen the company’s market position.

Hua Hong Semiconductor Delays Circular Dispatch for Major Acquisition

Hua Hong Semiconductor Ltd. has announced a delay in the dispatch of a circular related to a major acquisition agreement and a proposed non-public issuance of RMB shares. The delay is due to the need for additional time to finalize terms and prepare necessary documentation, including an asset valuation report and pro-forma financial information. The company has applied for an extension to dispatch the circular by December 31, 2025, and further announcements will be made regarding the timing. The completion of these transactions is contingent upon certain conditions, including shareholder approvals, and may not proceed if these conditions are not met.