crashbandicootmutant| Bank of America Securities: Maintain Huahong Semiconductor's "under-market" rating target price of HK$12

Bank of America Securities released a research report stating that it maintains Huahong Semiconductor (01347)'s "underperforming" rating with a target price of HK$12. The company's first-quarter sales fell 27% year-on-year to 4.4%crashbandicootmutant.600 million (US $. The same below), in line with the bank's expectations of 459 million yuancrashbandicootmutant; Gross profit margin and operating profit margin for the period were 6.4% and-10.6% respectively, slightly higher than the bank's expectations, due to non-operating income, mainly government subsidies.

The bank pointed out that the group's guidance on sales and gross profit margins for the second quarter was 470 million yuan to 500 million yuan, and 6% to 10%, respectively, indicating that there will be no immediate recovery, but management is concerned about potential microcontrollers (MCUs) and power discrete components (power

descrete) is positive about the recovery in demand. However, the bank has noticed an increase in the inventory cycle of domestic non-chip factory companies, reflecting that the inventory pressure of local chip design companies will continue into the second half of this year, and even next year, which will hinder Huahong's average selling price and gross profit margin of chips from the immediate recovery.