CICC: Significant Increase in Target Price for Huahong Semiconductor to 110 Hong Kong Dollars, Maintaining "Outperform" Rating in the Industry.

CICC's report stated that Huahong Semiconductor's third-quarter revenue increased by 20.7% year-on-year to $635 million, within the previously guided range of $620 million to $640 million; gross margin increased by 1.3 percentage points year-on-year to 13.5%, exceeding the previously given guidance range of 10% to 12%, with a net profit of $25.72 million. The bank pointed out that Huahong Semiconductor's quarterly revenue met expectations, while gross margin and net profit exceeded expectations due to price increases and improvements in product structure adjustments. The bank maintained its forecast for the company's revenue this year unchanged, but due to increased capacity installation and depreciation, it lowered the company's net profit forecast for this year by 27% to $109 million; Taking into consideration the expectation of platformization and improvement in product structure, the bank raised its forecast for the company's annual revenue next year by 6% to $2.972 billion, and raised the forecast for next year's net profit by 27% to $216 million. The bank raised Huahong Semiconductor's target price by 120% to HK$110 based on the upward shift in market valuation center and market expectations for the company's future platformization, maintaining an "outperform" rating.