Hua Hong Semiconductor Ltd. (1347) AI Stock Analysis

• Market Cap: HK$167.49B
• Dividend Yield: 0.23%
• Average Volume (3M): 54.45M
• Price to Earnings (P/E): 2976.7
• Beta (1Y): 1.63
• 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: 1,329,864,100
• 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$92.06
• Price Target Upside: 3.09% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: HK$91.00 ▲(1.90% Upside)

The score is held back primarily by weak profitability and negative free cash flow despite strong revenue growth, plus an extremely high P/E valuation. Technicals are supportive with a clear uptrend, but overbought signals add near-term risk. Earnings call momentum is moderately positive on record sales and improving margins, though losses and rising costs remain a constraint.

Positive Factors

Record Revenue Growth

Sustained high revenue growth demonstrates expanding market traction and demand for foundry services. Durable top-line expansion supports better capacity utilization, justifies continued capital allocation to fabs and R&D, and provides a platform to leverage scale for margin improvement over coming quarters.

Strong Domestic Market Position

Heavy exposure to China gives Hua Hong scale and deep customer relationships in the world’s largest semiconductor demand market. This structural market position supports long-term order visibility and strategic advantages amid localization trends, helping sustain volumes and bargaining power with local OEMs and partners.

Moderate Leverage and Equity Base

A conservative debt profile and solid equity base provide financial flexibility for capex-intensive fabs and technology upgrades. Moderate leverage reduces refinancing risk and supports continued capacity expansion (e.g., Fab 9A and acquisitions), improving ability to fund long-term growth without overburdening cash flow.

Negative Factors

Weak Profitability and Margins

Negative EBIT and very slim net margins indicate the business currently fails to generate sufficient operating profits from core foundry activities. Persistently weak margins erode return on invested capital, constrain internal funding for R&D and capex, and make long-term competitiveness dependent on sustained margin recovery.

Negative Free Cash Flow

Inability to convert earnings into free cash flow is critical for a capital-intensive foundry. Negative FCF limits self-funded expansion, raises reliance on external financing, and increases vulnerability to cyclical downturns; addressing cash conversion is essential for sustainable capex and dividend policies.

Rising Operating Expenses

Material increases in operating costs—driven by engineered wafer costs and depreciation—create lasting pressure on margins. For a foundry, higher fixed operating and depreciation expenses must be offset by higher utilization and pricing; otherwise elevated cost structure can perpetuate losses and weaken competitive position.

Hua Hong Semiconductor Ltd. Business Overview & Revenue Model

Company Description

Hua 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 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	6.65B	2.00B	2.29B	2.48B	1.63B	961.28M
Gross Profit	1.24B	205.13M	487.10M	843.66M	451.60M	234.79M
EBITDA	514.66M	385.01M	774.51M	993.26M	627.56M	255.40M
Net Income	178.52M	58.11M	280.03M	449.91M	261.48M	99.44M
Balance Sheet
Total Assets	95.64B	12.42B	10.94B	7.06B	6.20B	4.57B
Cash, Cash Equivalents and Short-Term Investments	30.75B	4.46B	5.59B	2.01B	1.61B	922.79M
Total Debt	18.77B	2.22B	2.12B	1.93B	1.61B	587.82M
Total Liabilities	27.12B	3.51B	2.93B	2.92B	2.52B	1.21B
Stockholders Equity	48.64B	6.25B	6.30B	3.03B	2.87B	2.53B
Cash Flow
Free Cash Flow	-3.84B	-2.32B	-264.91M	-245.32M	-420.44M	-818.15M
Operating Cash Flow	3.54B	459.50M	641.70M	750.87M	518.47M	269.11M
Investing Cash Flow	-7.43B	-2.67B	-833.31M	-930.16M	-863.06M	-405.66M
Financing Cash Flow	638.34M	1.15B	3.78B	672.18M	1.01B	540.43M

Hua Hong Semiconductor Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 89.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 89.3 is above the 20-day moving average (MA) of 74.32, above the 50-day MA of 76.02, and above the 200-day MA of 51.93, indicating a bullish trend. The MACD of 2.59 indicates Negative momentum. The RSI at 71.94 is Negative, neither overbought nor oversold. The STOCH value of 89.46 is Negative, 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1385	66 Neutral	HK$64.10B	81.16	7.85%	0.20%	12.62%	-4.75%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
0085	61 Neutral	HK$2.84B	6.82	17.96%	6.98%	-18.35%	-6.00%
0522	58 Neutral	HK$35.59B	144.79	1.55%	0.69%	-0.64%	-39.74%
2878	56 Neutral	HK$1.14B	21.74	4.98%	―	-25.16%	-51.97%
1347	54 Neutral	HK$167.49B	2,976.67	0.12%	0.23%	19.15%	-94.32%
8490	41 Neutral	HK$73.37M	-0.97	-41.46%	―	-26.02%	-4977.27%

Hua Hong Semiconductor Ltd. Corporate Events

Hua Hong Semiconductor Sets Terms for Major Acquisition and RMB Share Issue

Hua Hong Semiconductor has set the final consideration for its previously announced acquisition of a target company at RMB8.48 billion, to be paid through the issuance of 190,768,392 new consideration shares plus minor cash for fractional shares, after agreeing the valuation with the vendors via a supplemental agreement. The company also entered into a compensation arrangement with its controlling shareholder Huahong Group under which any asset impairment in the acquired business over the next three financial years will trigger compensation to Hua Hong Semiconductor, partly via repurchase of consideration shares at a nominal price and partly in cash, and it plans to raise up to RMB7.56 billion through a non‑public issuance of RMB shares—amounting to no more than 30% of enlarged share capital—to fund the deal, subject to regulatory and independent shareholder approvals at an upcoming extraordinary general meeting, where investors will also vote on related mandates, a whitewash waiver and treatment of the issuance as a special deal under takeover rules.

The most recent analyst rating on (HK:1347) stock is a Hold with a HK$68.00 price target. To see the full list of analyst forecasts on Hua Hong Semiconductor Ltd. stock, see the HK:1347 Stock Forecast page.

Hua Hong Semiconductor Renews Connected Transactions and Sets New Lease Caps for 2026

Hua Hong Semiconductor has renewed a series of continuing connected transactions with affiliated parties for 2026, including a framework agreement with Huahong Group for mutual sales and purchases of semiconductor products and materials, a property management agreement and dormitory lease with Huajin Property Management and Huahong Real Estate, and a clean room lease with Huali Micro. The board has also proposed new annual caps for long-term leases with Huali Micro and Huahong Real Estate, which run until 2030 and 2033 respectively, to ensure the company can continue using and providing key facilities in the ordinary course of business, supporting operational continuity and clarifying the scale of related-party dealings for investors and regulators.

The most recent analyst rating on (HK:1347) stock is a Hold with a HK$68.00 price target. To see the full list of analyst forecasts on Hua Hong Semiconductor Ltd. stock, see the HK:1347 Stock Forecast page.

Hua Hong Semiconductor Updates on Major Acquisition and Fundraising Plans

Hua Hong Semiconductor Ltd. has announced ongoing negotiations related to a major acquisition and a proposed non-public issuance of RMB shares to raise ancillary funds. The completion of these transactions is contingent upon certain conditions, including shareholder approvals and regulatory waivers, which may affect the company’s strategic positioning and financial structure.

The most recent analyst rating on (HK:1347) stock is a Hold with a HK$70.00 price target. To see the full list of analyst forecasts on Hua Hong Semiconductor Ltd. stock, see the HK:1347 Stock Forecast page.

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.

The most recent analyst rating on (HK:1347) stock is a Hold with a HK$75.00 price target. To see the full list of analyst forecasts on Hua Hong Semiconductor Ltd. stock, see the HK:1347 Stock Forecast page.

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.

The most recent analyst rating on (HK:1347) stock is a Hold with a HK$90.00 price target. To see the full list of analyst forecasts on Hua Hong Semiconductor Ltd. stock, see the HK:1347 Stock Forecast page.

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.

The most recent analyst rating on (HK:1347) stock is a Hold with a HK$90.00 price target. To see the full list of analyst forecasts on Hua Hong Semiconductor Ltd. stock, see the HK:1347 Stock Forecast page.

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.

The most recent analyst rating on (HK:1347) stock is a Hold with a HK$90.00 price target. To see the full list of analyst forecasts on Hua Hong Semiconductor Ltd. stock, see the HK:1347 Stock Forecast page.

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.

The most recent analyst rating on (HK:1347) stock is a Hold with a HK$90.00 price target. To see the full list of analyst forecasts on Hua Hong Semiconductor Ltd. stock, see the HK:1347 Stock Forecast page.

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.

The most recent analyst rating on (HK:1347) stock is a Hold with a HK$90.00 price target. To see the full list of analyst forecasts on Hua Hong Semiconductor Ltd. stock, see the HK:1347 Stock Forecast page.