[ET Net News Agency, 8 August 2019] Jefferies Research lowered its target price for Hua
Hong Semiconductor (01347) to HK$17.2 from HK$19.5 and maintained its "buy" rating.
The research house said Hua Hong maintained positive tune on MCU (Microcontroller Unit)
and power discrete's demand and inventory in 2H. Wuxi fab ramp-up for 4Q was on schedule
and saw new demand for power, expected growth contribution in 2H 2020. Management
reiterated 4Q margin dilution from Wuxi start-off, partially offset by gov subsidy.
Jefferies cut its FY2019/20 revenue by 6.3%/7.7%, respectively, to reflect softness in
smart card ICs and 8-inch wafer price decline. It also revised down gross margin by
1.7pp/1.3pp, to reflect increasing depreciation. (KL)