According to a report published by DBS, Huahong Semiconductor's adjusted loss (excluding government subsidies) reached US$16 million last quarter, mainly due to long-term weak demand in the terminal market, which was in line with expectations. The company's management predicts that gross margin for the first quarter of this year will be between 3% and 6%. The weak performance is due to continued pressure on average prices for consumer electronics-related products. The bank lowered Huahong's profit forecast for today's and next fiscal year by 55% and 49% to reflect the average price pressure on 300mm wafers and the long-term contraction in gross profit. The bank maintained its “hold” rating, and the target price was lowered from HK$22 to HK$17 based on a slower than expected recovery.