Zhitong Finance APP learned that CCB International released a research report stating that the target price of Hua Hong Semiconductor (01347) was raised from 20.5 Hong Kong dollars to 30 Hong Kong dollars. It is believed that the current forecast market-to-book ratio of the stock is 0.7 times, which is not considered expensive, maintaining an "outperform" rating.

The report states that Hua Hong Semiconductor's third quarter revenue increased by 10% quarter-on-quarter to 0.526 billion US dollars, exceeding the market's expectations and the company's guidance upper limit of 0.52 billion US dollars. The gross margin increased by 1.7 percentage points to 12.2% quarter-on-quarter, higher than the company's guidance upper limit of 12%. The improvement in gross margin quarter-on-quarter is based on capacity utilization rate and the rise in average product selling price. The company's quarterly net income increased by 5.72 times to 45 million US dollars, exceeding market expectations.

The bank pointed out that Hua Hong Semiconductor's fourth quarter revenue guidance is expected to reach 0.53 billion to 0.54 billion US dollars, with a median meaning a 2% increase quarter-on-quarter, slightly below market expectations. The gross margin guidance of 11% to 13% implies roughly flat to slight improvement, but it is also below market expectations.