Bank of America Securities: Upgrades rating on HUA HONG SEMI (01347) to "Buy," target price raised to HK$44.5.

Bank of America Securities released a research report stating that they have upgraded the rating of HUA HONG SEMI (01347) from "underperform" to "buy", showing optimism towards the recovery of its profit margin in 2025/2026. The target price has been significantly raised from 17 Hong Kong dollars to 44.5 Hong Kong dollars. Key driving factors include the supply-demand rebalancing in the Chinese semiconductor market, improvement in pricing environment for chip manufacturers, opportunities for market share expansion both domestically and abroad, and low dependence on the US market. The report stated that with the support of the increase in the average selling price of chips, the bank predicts that Hua Hong's operating profit margin will improve from -8% in 2024 to breakeven in 2025, and normalize to 12% in 2026. At the same time, earnings per share forecasts for 2025/2026 have been raised by 46% and 85% respectively.