HK Stock Market Move | Hua Hong Grace Semiconductor (01347) plunged 10% as its sales revenue reached a record high in the second quarter. Goldman Sachs indicated that its revenue guidance for the third quarter fell short of expectations.

Hua Hong Grace Semiconductor (01347) fell over 10%, and as of the time of writing, it was down 9.78%, priced at HK$132.8, with a transaction volume of HK$3.874 billion. In terms of news, Hua Hong Grace Semiconductor announced its second-quarter results. The company's second-quarter sales revenue set a record high, reaching US$717.5 million, a year-on-year increase of 26.8% and a quarter-on-quarter increase of 8.6%; the gross margin was 16.5%, up 5.6 percentage points year-on-year and up 3.5 percentage points quarter-on-quarter; the profit attributable to the parent company was US$38.6 million, an increase of 385.9% year-on-year and an increase of 84.6% quarter-on-quarter. Hua Hong Grace Semiconductor expects third-quarter sales revenue to be between US$770 million and US$780 million, with a gross margin expected to be between 16% and 18%. Goldman Sachs stated that Hua Hong Grace Semiconductor anticipates a quarter-on-quarter revenue growth of 7% to 9% in the third quarter, with a gross margin between 16% and 18%, compared to 16.5% in the second quarter, indicating that despite ongoing capacity expansion, there is still room for gross margin improvement. The median of the revenue guidance is 11% and 6% lower than the bank's and market expectations, respectively, suggesting a performance below expectations; however, the gross margin guidance of 16% to 18% is higher than the bank's forecast of 15.3% and the market's expectation of 16.5%.