HG Semiconductor Limited (6908) AI Stock Analysis

• Market Cap: HK$455.33M
• Dividend Yield: N/A
• Average Volume (3M): 4.57M
• Price to Earnings (P/E): ―
• Beta (1Y): 3.46
• Revenue Growth: -3.87%
• EPS Growth: 1.11%
• Country: HK
• Employees: 161
• Sector: Technology
• Sector Strength: 88
• Industry: Electrical Equipment & Parts
• EPS (TTM): -0.08
• Shares Outstanding: 938,818,500
• 10 Day Avg. Volume: 3,077,631
• 30 Day Avg. Volume: 4,570,908
• PEG Ratio: 0.19
• Price to Book (P/B): 0.93
• Price to Sales (P/S): 6.65
• P/FCF Ratio: -6.02
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 39 Underperform
• Price Target: HK$0.50 ▲(4.17% Upside)

HG Semiconductor Limited's overall stock score is low due to significant financial challenges, including declining revenues, negative profitability, and cash flow issues. The technical analysis indicates bearish momentum and a downward trend, while the valuation is unattractive due to a negative P/E ratio and lack of dividend yield. These factors collectively contribute to a low overall stock score.

Positive Factors

Low Leverage

Low leverage indicates financial prudence, providing the company with flexibility to manage its capital structure and invest in growth opportunities without the burden of high interest obligations.

Diverse Revenue Streams

Diverse revenue streams from OEMs, distributors, and licensing help stabilize income and reduce dependency on a single market segment, supporting long-term growth.

Industry Demand

The increasing demand for semiconductors in emerging technologies like 5G and IoT positions the company to capitalize on industry growth trends, driving future revenue.

Negative Factors

Declining Revenue

Significant revenue decline indicates challenges in market competitiveness or product demand, potentially impacting long-term financial health and growth prospects.

Negative Profitability

Negative profitability highlights inefficiencies in operations or pricing strategy, which can hinder the company's ability to reinvest in growth and innovation.

Cash Flow Challenges

Negative cash flow trends limit the company's ability to fund operations and growth initiatives internally, increasing reliance on external financing.

HG Semiconductor Limited Business Overview & Revenue Model

Company Description

HG Semiconductor Limited, an investment holding company, designs, develops, manufactures, and sells light-emitting diode (LED) beads and LED lighting products in the People's Republic of China. It offers candle, flood, bulb, spot, down, oyster, and panel lights, as well as tube and torch. The company also provides subcontracting services. It serves manufacturers of backlight LED modules/panels, LCD panels, and other electronic products. The company was formerly known as HongGuang Lighting Holdings Company Limited and changed its name to HG Semiconductor Limited in September 2021. HG Semiconductor Limited was founded in 2010 and is headquartered in Zhuhai, the People's Republic of China.

How the Company Makes Money

HG Semiconductor Limited generates revenue through multiple streams, primarily from the sale of its semiconductor products to original equipment manufacturers (OEMs) and electronic device manufacturers. The company engages in both direct sales and distribution partnerships, which enable it to reach a wider market. Key revenue streams include the sale of integrated circuits for consumer electronics, automotive applications, and industrial automation. Additionally, HG Semiconductor may earn revenue from licensing technology or intellectual property, as well as through long-term contracts with major clients. Strategic partnerships with leading technology companies further enhance its market presence and contribute to its earnings by ensuring a steady demand for its products.

HG Semiconductor Limited Financial Statement Overview

Summary

HG Semiconductor Limited is facing significant financial challenges, with declining revenues, negative profitability, and cash flow issues. While the company has low leverage, the persistent losses and negative cash flows pose risks to financial stability. Strategic improvements are needed to enhance revenue growth and profitability.

Income Statement

HG Semiconductor Limited has experienced declining revenue with a negative growth rate of -79.7% in the TTM period. The company is struggling with profitability, as indicated by negative net profit margins and EBIT margins. The gross profit margin is low at 11.18%, reflecting challenges in cost management or pricing power.

Balance Sheet

The company maintains a low debt-to-equity ratio of 0.036, suggesting conservative leverage. However, the return on equity is negative, indicating that the company is not generating returns for shareholders. The equity ratio is stable, but the overall financial health is weakened by persistent losses.

Cash Flow

HG Semiconductor Limited has negative operating cash flow and free cash flow, with a declining trend in free cash flow growth. The operating cash flow to net income ratio is negative, indicating cash flow challenges. The free cash flow to net income ratio is above 1, suggesting some ability to cover net losses with free cash flow, but overall cash flow health is poor.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	74.09M	75.28M	88.60M	87.52M	126.14M	122.00M
Gross Profit	8.29M	7.79M	8.53M	16.43M	25.51M	26.37M
EBITDA	-139.72M	-160.73M	-82.45M	-86.29M	-437.65M	14.24M
Net Income	-161.87M	-156.82M	-150.72M	-101.29M	-446.83M	4.56M
Balance Sheet
Total Assets	581.34M	629.61M	764.89M	718.31M	665.87M	220.57M
Cash, Cash Equivalents and Short-Term Investments	77.91M	43.41M	83.73M	77.69M	139.02M	11.40M
Total Debt	18.18M	16.65M	16.66M	59.85M	31.52M	15.15M
Total Liabilities	48.41M	51.83M	44.28M	108.36M	56.53M	48.42M
Stockholders Equity	502.69M	540.84M	683.73M	593.75M	609.34M	172.16M
Cash Flow
Free Cash Flow	-82.22M	-83.27M	-131.83M	-164.44M	-69.22M	-30.07M
Operating Cash Flow	-66.68M	-69.67M	-23.19M	-94.84M	-59.94M	-21.86M
Investing Cash Flow	-12.81M	7.57M	-108.57M	-53.70M	-217.41M	3.05M
Financing Cash Flow	104.07M	21.47M	137.16M	75.54M	385.81M	-2.49M

HG Semiconductor Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.48
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:6908, the sentiment is Negative. The current price of 0.48 is below the 20-day moving average (MA) of 0.50, below the 50-day MA of 0.50, and below the 200-day MA of 0.54, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 38.31 is Neutral, neither overbought nor oversold. The STOCH value of 15.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:6908.

HG Semiconductor Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1979	76 Outperform	HK$2.14B	5.16	22.34%	5.87%	18.32%	14.06%
1710	63 Neutral	HK$236.00M	12.23	5.04%	7.47%	4.01%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
1539	52 Neutral	HK$1.05B	24.19	14.19%	―	11.61%	287.50%
8328	51 Neutral	HK$494.89M	-2.34	-18.92%	―	-28.40%	-350.00%
1399	48 Neutral	HK$218.00M	-5.99	-2.96%	―	-11.18%	-180.05%
6908	39 Underperform	HK$455.33M	-2.06	-29.34%	―	-3.87%	1.11%

HG Semiconductor Limited Corporate Events

HG Semiconductor Expands Stake in Shenzhen Jiahong Through Strategic Acquisitions

HG Semiconductor Limited has announced two proposed acquisitions to purchase 100% of the share capital of Target Company A and Target Company B, which collectively hold a significant equity interest in Shenzhen Jiahong. The acquisitions, valued at HK$73,388,000 and HK$40,816,000 respectively, will be completed through the issuance of shares and a promissory note. This move will increase HG Semiconductor’s indirect ownership in Shenzhen Jiahong, potentially strengthening its influence and operational capacity in the semiconductor market.