The Zhitong Finance App learned that DBS released a research report stating that it maintained the “holding” rating of Huahong Semiconductor (01347), but lowered the profit forecast for today's and next two fiscal years by 55% and 49% to reflect the average price pressure on 300mm wafers and the long-term contraction in gross profit. The target price was lowered from HK$22 to HK$17 based on a slower than expected recovery.

According to the report, the company'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 a gross profit margin of 3% to 6% for the first quarter of this year. The weak performance is due to continued pressure on average prices for consumer electronics-related products.