Hua Hong Semiconductor (01347) surged more than 6% again. As of the time of writing, the stock was up 5.63%, trading at HK$94.75, with a turnover of HK$1.209 billion. On the news front, Hua Hong Semiconductor recently announced its intention to acquire approximately 97.5% of the equity in HLMC for a transaction value of RMB 8.268 billion. Kaiyuan Securities released a research note stating that HLMC is a high-quality wafer fabrication asset, and this acquisition is expected to expand the company's long-term production capacity, adding a monthly capacity of 38,000 wafers at the 65/55nm and 40nm process nodes. Goldman Sachs published a report citing Hua Hong's management, which anticipates robust demand across the company's technology platforms. This is expected to support maintaining capacity utilization at high levels and facilitate product mix optimization and an increase in average selling prices. Management plans to optimize the product portfolio and enhance pricing, supported by ongoing cost control measures, maintaining a positive outlook on the company's future profitability. Fab 9B is projected to ramp up production capacity gradually to 83,000 wafers per month by 2027 as scheduled, with an expansion of 28/22nm capacity planned for the period between 2027 and 2029. Management indicated that the company will increase the adoption ratio of equipment and materials from the local supply chain, which is expected to have a positive impact on profit margins.
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