Goldman Sachs: Huahong Semiconductor (01347)'s high capacity utilization rate supports product portfolio optimization and average price increase target price of HK$117

The Zhitong Finance App learned that Goldman Sachs released a research report stating that based on high capacity utilization, continuous capacity expansion and technology migration to 28/22 nm nodes, the target price is HK$117, which is equivalent to predicting the price-earnings ratio of 68.8 times in 2028, which is higher than the historical average of 22 times, reflecting the bank's positive outlook for Huahong's sustainable scale expansion and technological innovation.

Yesterday (7th), the bank met CFO Huahong during the China Semiconductor Investment Roadshow in Shanghai. The bank quoted management as expecting steady demand for the company's various technology platforms, which will support the maintenance of capacity utilization at a high level, and support product portfolio optimization and average price improvement. Management will optimize the product portfolio and increase pricing, and maintain a positive view of the company's future profitability in line with ongoing cost control measures. Fab 9B is expected to gradually increase production capacity to 83,000 pieces per month by 2027 and expand production capacity by 28/22 nm between 2027 and 2029. Management said the company will increase the proportion of equipment and materials used in the local supply chain, which will have a positive impact on profit margins.