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<Research> Daiwa Reiterates Buy on HUA HONG SEMI (01347.HK) as 1Q26 Profit Meets Expectations
Recommend 7 Positive 6 Negative 7 |
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Daiwa issued a report stating that HUA HONG SEMI (01347.HK) recorded net profit of USD21 million in 1Q26, representing a 4.6x YoY surge due to a low base effect, in line with the brokers expectations. Gross margin was stable in 1Q26 and is expected to expand in 2Q26. Revenue rose 22% YoY and was flat QoQ at USD661 million in 1Q26. The YoY revenue growth was mainly driven by an 18% YoY increase in shipments and a 4% rise in average selling price (ASP). On a QoQ basis, despite the impact of the Lunar New Year holiday, both shipments and ASP remained stable, indicating strong customer demand. Gross margin reached 13%, up 4 ppts YoY and flat QoQ. Management guided 2Q26 revenue at USD690-700 million, implying 4-6% QoQ growth, supported by both ASP and shipment increases. Gross margin is guided at 14-16%, higher than 13% in 1Q26. The revenue and gross margin guidance are both in line with Daiwas expectations. The broker noted a clear global shortage in silicon photonics chip supply, and said it is a reasonable move for the company to expand in this field by leveraging its advantages in CMOS and BCD technologies. Finally, management indicated that the Fab5 acquisition will be completed in 2H26. Daiwa believes that upon completion of Fab5 integration, there will be more M&A activities in 2027. The broker reiterated its Buy rating. (ha/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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