[ET Net News Agency, 8 August 2019] Credit Suisse lowered its target price for Hua Hong
Semiconductor (01347) to HK$15 from HK$16 reflecting lower margins from a 12" fab that
will take time to scale. The research house maintained its "neutral" rating.
It said Hua Hong's 2Q sales and gross margins (GMs) were in line. Business guidance
improves mildly as expected in 3Q. 3Q sales were guided +3.5% QoQ on power discrete
strength and MCU ((Microcontroller Unit) recovery, but the inventory correction should put
full-year up slightly.
The Wuxi fab will start by 4Q for embedded flash/MCUs and discretes. The growing
depreciation from ramping 12" fab will be partially offset by equipment subsidies, taking
GMs to the high 20% range.
Credit Suisse lifted its 2019 EPS forecast to HK$1.14 on the non-operating income. (KL)
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01347 HUA HONG SEMI
Nominal 
14.560 -0.180 (-1.221%) Research Report
08/08/2019 17:50
{I-bank focus}CS trims Hua Hong Semi (01347) to HK$15
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