Hua Hong Semiconductor Slumps on More Signs of Chip Weakness
By Jiahui Huang
Shares of Hua Hong Semiconductor tumbled after quarterly profit sank and the company guided for weaker sales amid a continued downturn in the global chip industry.
Hong Kong-listed shares fell 13% to 17.48 Hong Kong dollars (US$2.24) on Friday, extending losses this year to 36%. The benchmark index was down 1.6%, with tech stocks slipping partly on Nasdaq weakness overnight.
In Shanghai, where the state-owned company began trading in August after raking in nearly US$3 billion in one of the year's biggest offerings globally, the stock was 4.2% lower.
The Chinese chip maker said late Thursday that revenue in the third quarter fell 9.7% from a year earlier to US$568.5 million and net profit dived 87% to US$13.9 million.
It also forecast revenue to slip further in the final quarter of the year, to between US$450 million and US$500 million. That could mark the company's weakest sales level since the third quarter of 2021.
Junjun Tang, the company's executive director, in a statement highlighted a "complex and constantly changing" macro environment, saying "the semiconductor market has not yet recovered."
Analysts from brokerage firms, including Jefferies and Morgan Stanley, downgraded Hua Hong and trimmed target prices, according to media reports.
Kaiyuan Securities analyst Xiang Liu said the chip industry weakness is a global phenomenon, adding that Hua Hong's capacity expansion reflected its confidence in future growth.
Write to Jiahui Huang at jiahui.huang@wsj.com
(END) Dow Jones Newswires
November 09, 2023 23:49 ET (04:49 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.-
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