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华虹半导体(1347.HK):3Q盈利超预期;22年指引能见度低

Hua Hong Semiconductor (1347.HK): 3Q profits exceed expectations; 22 years guide low visibility

華泰證券 ·  Nov 15, 2021 00:00

3Q21 performance exceeded expectations; optimistic about 4Q21 guidance

Hua Hong Semiconductor (Hua Hong) announced 3Q21 results: revenue rose 30.4% month-on-month to $451 million, exceeding our expectations and Bloomberg consensus expectations ($412 million / $413 million), mainly driven by the rise in ASP (4.8% month-on-month growth) and the continued capacity expansion of Wuxi plant. Gross margin rose 2.3 percentage points month-on-month to 27.1 per cent, slightly higher than its previous guidance of 27 per cent. The company directed 4Q21 revenue to grow 8.5% month-on-month, better than its global contract manufacturing peers, with a gross margin of 27-28%. Out of careful consideration of its expansion plan, we adjust the 2021 Universe 2022 Universe 2023 revenue forecast + 7.5 Accord 1.1 Mather 11.3% to 15.97 7Compare 2.231 billion, and the homing net profit is reduced by-12.8 gamble 3.2 gamble to $209 million / 192 million / 155 million to reflect the tax impact. We keep our buy rating and target price unchanged at HK $60.00, which is at the industry average based on the 3.42x forecast PB for 2022.

3Q21 recalled: ASP and gross profit margin growth contributed to strong quarterly performance. Huahong 3Q21 revenue reached an all-time high of US $451 million, with gross profit margin rising to 27.1%. We think it is mainly due to: 1) ASP and gross profit of 8-inch and 12-inch production lines have increased under the promotion of product structure optimization. 2) the production capacity of 3Q21 Wuxi plant has expanded from 40, 000 to 53, 000. 3) capacity continues to be tight. The factory maintains full capacity (110.9%) operation. In the product platform, the revenue of power discrete devices / analog & power management / logic & RF 3Q21 increased by 27.8% over the previous month, mainly driven by strong demand for power IGBT, BCD, MOS and MCU.

4Q21&2022 outlook: 4Q21 guidance is good, but 2022 guidance visibility reduction Huahong guidance 4Q21 revenue rose 8.5 per cent to $490 million month-on-month, with a gross margin of 27-28 per cent, well above Bloomberg consensus expectations ($447 million). Management pointed out that the company's 12-inch production capacity reached 65000 pieces in October and will be maintained until the end of 2021. Looking forward to 2022, the company remains optimistic about capacity utilization and plans to increase the capacity of Wuxi fab to 95,000 by the end of 2022, but it did not disclose the details of capacity expansion and capacity allocation, which we believe reflects the differentiation of downstream climate since 2H21, continued weakness of smartphones and strong demand for applications such as new energy. We suggest that we should pay attention to the change of downstream demand boom in 2022 and Semiconductor Manufacturing International Corporation's capacity expansion plan.

The target price is HK $60.00, corresponding to 3.42 times the 2022 forecast BVPS, taking into account the continued rise of 8-inch and 12-inch ASP and the faster-than-expected climbing of Wuxi plant capacity, we raised our revenue forecast for 2021 by 7.5%, but due to careful consideration of its capacity expansion plan, we will lower our 2022 2023 forecast income by-11.3%. We lowered our net profit forecast by-12.8Universe 3.2 Universe 19.2% to $209 million / 192 million / 155 million respectively to reflect the tax impact. We maintain Huahong's "buy" rating and target price of HK $60.00, corresponding to 3.42 times 22-year PB, at the industry average level (close to its all-time high valuation).

Risk tips: capacity climbing is slower than expected; average selling prices and capacity margins are lower than expected; and US export controls are tighter.

The translation is provided by third-party software.


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