Hua Hong Semiconductor's Localizing Trend Should Support Its Utilization Rate -- Market Talk

Dow Jones05-10

0441 GMT - Hua Hong Semiconductor's continued trend of focussing its business locally could support its utilization rate as China's domestic clients contribute about 80% of its revenue, Citi analysts say in a research note. However, Hua Hong is unlikely to see substantial improvement in average sale prices as price competition among its customers remain fierce and they won't tolerate price hikes from chip foundries, they say. The analysts reckon Hua Hong's recent share price rebound has already factored in market expectation of improved earnings and a better 2H. The U.S. bank raises its target price to HK$16.00 from HK$15.00. However, Citi maintains a sell call on Hua Hong as the company still needs to wait for a structural recovery in chip demand. Shares were last at 6.8% higher HK$18.20. (sherry.qin@wsj.com)

(END) Dow Jones Newswires

May 10, 2024 00:41 ET (04:41 GMT)

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