The Zhitong Finance App learned that Huahong Semiconductor (01347) fell by more than 5%. As of press release, it was down 4.8% to HK$17.86, with a turnover of HK$779.84 million.

According to the news, Goldman Sachs Research reports that Huahong's revenue and profit margins are expected to stabilize in the first quarter of 2024, but the possibility of a strong recovery in the short term is still low, and foundry inventory is still higher than historical levels. The gradual recovery of terminal markets such as smartphones and PCs will take more time. The bank lowered Huahong Semiconductor's target price by 13.7%, from HK$27.8 to HK$24. The 2023 forecast remained largely unchanged, but the 2024-2028 profit forecast was lowered mainly due to declining revenue and gross margin.

Goldman Sachs pointed out that since the bank's expected utilization rate and average sales price may take more time to recover, the 2024-2028 gross margin will be cut by 2.5-5.7 percentage points. Net profit forecasts for 2024-2028 were reduced by 43%, 30%, 14%, 11%, and 11%. Maintain a “buy” rating.