The bank slightly raised its profit forecast for 2025, primarily due to better-than-expected gross margin projections for the third and fourth quarters of 2025.
According to a research report released by CCB International via the Zhitong Finance app, the acquisition of Fab 5 may enhance Hua Hong Semiconductor's (01347) return on equity. The firm expects the acquisition to be completed in 2026. Consequently, the target price has been raised by 46% from HKD 50 to HKD 73. Considering the level of return on equity, the firm believes that the current stock valuation is relatively high and has thus downgraded the rating from 'Outperform' to 'Neutral.' The firm has slightly increased its 2025 profit forecast, primarily due to better-than-expected gross margin forecasts for the third and fourth quarters of 2025. The report noted that the group’s revenue for the third quarter of 2025 was USD 635 million, representing a year-on-year increase of 21% and a quarter-on-quarter increase of 12%, aligning with both company and institutional consensus expectations.
