Founder Securities issued a research report that maintains Hua Hong Semiconductor's (01347) "highly recommended" rating, according to Zhitong Financial APP. Revenue in 2022-24 is expected to be 25.3cm 29.6 / 3.28 billion US dollars, with a net profit of 3.6pm / 510 million. According to DCF valuation method, the target price is 8.63 US dollars, which translates to 67.78 Hong Kong dollars at exchange rate. The company's 22Q1 revenue was $590 million, a better-than-expected increase from the $560 million revenue guidance. 22Q2 revenue is expected to be $615 million, or + 3.4% month-on-month.
Events:The company's 22Q1 realized revenue of US $590 million, with a month-on-month ratio of + 12.6%, and a net profit of US $100m, or-22.9% compared with the previous month.
The main points of founder Securities are as follows:
22Q1 revenue grew faster than expected and real gross profit margin was 30 per cent after restoring the impact of government subsidies.
The company's 22Q1 revenue of $590 million, compared with $560 million, led to better-than-expected growth, with a combined gross profit margin of 26.9%, month-on-month-5.6pcts. Among them8寸Revenue of $333 million, year-on-year + 32.9%, month-on-month + 3.1%, gross profit margin 38.6%, year-on-year + 11.3pcts, month-on-month-6.8pcts12寸Revenue of $262 million, year-on-year + 379.5%, month-on-month + 27.4%; gross profit margin 12%, year-on-year + 4.7pcts, month-on-month-0.1pcts.
The month-on-month decrease in consolidated gross profit margin was mainly due to the audit adjustment of some government subsidies to 22Q4, which mainly affected the 8-inch line, with an amount of approximately $64.2 million, of which $46.6 million was recorded as research and development expenses and $17.6 million as cost of sales. Restore the $17.6 million cost of sales to 22Q1, with an actual 8-inch gross margin of 44% and a comprehensive gross margin of 30%, which is higher than the upper limit of 22Q1 guidelines.Looking ahead to 22Q2, the company expects 22Q2 revenue of $615 million, a month-on-month increase of + 3.4%, with a gross margin range of 28% and 29%.
The demand for MCU, smart card, NORflash, CIS and power continues to be high, and the advantages of multiple process platforms are significant.
By technology platform, 22Q1's revenue from freestanding non-volatile memory was US $58.55 million, which was + 406% compared with the same period last year; by process technology node, 22Q1's 55nm and 65nm process technology nodes earned US $103 million, or + 712% from the same period last year. The above mainly benefited from the increased demand for NORflash, CIS and logic products. In the face of the high continuous demand for characteristic processes in the field of automotive electronics and new energy, the company improves the layout of multiple platforms such as embedded semiconductor memory, power and simulation, and continuously enhances its influence in the global wafer foundry field around the "special IC+ power" strategy.
In 22 years, the capital expenditure was US $1.2 billion, and the 12-inch production expansion of 30, 000 tablets was carried out as planned.
The 8-inch capacity utilization rate of 22Q1 company is 107.7%. The 12-inch capacity utilization rate is 103.9%, which continues to be fully loaded. The company has achieved the original investment target of US $250 million, and the first step of 65000-piece expansion was completed in October 2001, and the production capacity is being fully released. The second phase of the project has been moved into 4 sets of equipment, which is scheduled to be put into production at the end of the year. At that time, the company will achieve a total production capacity of about 94500 pieces per month, supporting the company's sustained growth in 2023 and beyond.
Risk Tips:Downstream prosperity is lower than expected; 12-inch production expansion is not as expected; the risk of gross profit margin pressure caused by rising prices of raw materials.