[ET Net News Agency, 9 November 2017] Credit Suisse raised its target price for Hua
Hong Semiconductor (01347) to HK$17 from HK$13.5, and maintained its "outperform" rating.
The research house said Hua Hong's 2Q sales were in line, profitability was above
expectations. Sales were guided up 5% QoQ to US$208mn with demand being healthy across
products. On full utilisation, GMs were guided to stay at 33-34% levels, above CS's
estimate of 32%.
Management confirmed its parent Hua Hong group is negotiating with Wuxi on a 12" fab for
mature 12" applications; however, split of financing and capex are still not finalised, it
could lift growth potential, but impact cash flows and funding needs.
Credit Suisse lifted its 2017/18 EPS forecasts from HK$0.94/HK$0.97 to HK$1.04/HK$1.08.
(KL)