Daiwa released a research report, stating that the target price has been raised from HK$26 to HK$28, reiterating a 'shareholding' rating. The company's revenue in the third quarter of this year was $0.526 billion, up 10% quarter-on-quarter but down 7% year-on-year, with a gross margin of 12.2%, slightly better than the guidance. In addition, the overall utilization rate (UTR) of Hua Hong reached 105%, significantly higher than the 98% in the second quarter. $HUA HONG SEMI (01347.HK)$ The weather is good today The weather is good today.

The report quoted Hua Hong management as saying that fourth quarter revenue is expected to reach $0.53 billion to $0.54 billion, implying a 1% to 3% increase quarter-on-quarter; gross margin is expected to remain at 11% to 13%. The management also pointed out that the demand for 12-inch wafers remains strong, while the average selling price (ASP) of 8-inch wafers is still facing some price pressure.

Daiwa mentioned that the pace of wafer price increases in the second half of 2025 at Hua Hong is weaker than expected, mainly due to weak end-demand environment. However, the progress of Hua Hong's new 12-inch wafer fab (Fab 9) investment is progressing smoothly, which may help increase the overall sales average price, and capacity expansion may continue to be a revenue driver for its fiscal year 2025.