Jinwu Financial News | According to Open Source Securities Research, Huahong Semiconductor (01347) 2024Q1 revenue was 460 million US dollars, up 1% month-on-month, close to the lower limit of the 45-50 billion US dollar range of the company's guidelines. Mainly due to the fact that some of the company's price adjustments in 2023 were still reflected in 2024Q1, the company's product ASP fell 7.2% month-on-month; while shipments increased 7.9% month-on-month, mainly due to increased demand for power management due to AI servers and fast charging, etc., and a recovery in CIS demand. RF revenue increased 13%/14% month-on-month, respectively.
According to the bank, power management and CIS demand led to an increase in the company's capacity utilization rate. The 8-inch and 12-inch capacity utilization rates increased from 91.0%/77.5% in 2023Q4 to 100.3%/84.2%, respectively. The 2024Q1 gross profit margin was 6.4%, slightly higher than the upper limit of 3%-6% in the company's guidance range, an improvement of 2.4 percentage points over the previous month. The analysis was mainly due to the decline in the negative impact of 2023Q4 companies' inventory price reduction preparations. In 2024Q1, the company's operating profit margin was -10.6%, up 6.2 percentage points from month to month.
The bank said that considering the increase in the company's capacity utilization rate driven by power management and CIS demand, the bank raised the 2024-2025 net profit forecast from 1.01 to 119 million US dollars to 1.52/188 million US dollars, and added the 2026 net profit forecast of 228 million US dollars. The corresponding year-on-year growth rates were -45.9%/24.2%/21.3%, respectively, and the corresponding EPS was 0.11/0.17/0.26 US dollars, respectively. The current stock price of HK$18.02 corresponds to 21.8/13.6/8.8 times PE in 2024-2026, and is at a historical low valuation level of 0.6 times PB in 2024. Considering marginal improvements at the company's management level, it is expected that along with the recovery in industry sentiment and improvements in its own profits, it is expected to drive its valuation repair and maintain an “gain” rating.