Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 149 stocks over the last week. The average A-H premium was 83.5% as of May 16th.</li>
<li>The average A-H premium changed by -0.8ppt week-on-week, led by energy, communication services, financials and offset by consumer staples.</li>
<li>We highlight weekly changes in A-H premium for Cosco Shipping Development, Qingdao Port International, Cosco Shipping, BYD.</li>
</ul>


We analyse the changes of A-H premium on 149 stocks over the last week. The average A-H premium was 83.5% as of May 16th.
The average A-H premium changed by -0.8ppt week-on-week, led by energy, communication services, financials and offset by consumer staples.
We highlight weekly changes in A-H premium for Cosco Shipping Development, Qingdao Port International, Cosco Shipping, BYD.


A-H Premium Weekly (May 16th): Cosco Shipping Development, Qingdao Port International

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of May 2nd.</li>
<li>Top short increases and decreases were tabulated for one week and four week period.</li>
<li>We highlight short changes in Baba (9988 HK), CCB (939 HK), Jd (9618 HK).</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of May 2nd.
Top short increases and decreases were tabulated for one week and four week period.
We highlight short changes in Baba (9988 HK), CCB (939 HK), Jd (9618 HK).


External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

Hua Hong Semiconductor / Equity Bottom-Up

<ul><li>Hua Hong Semi announced 1Q25 results. Revenue was up 17.6% YoY/flattish QoQ at US$541mn, a mixed impact of higher wafer shipment (up 42% YoY and up 7% QoQ) and continuous ASP pressure (down 2% YoY and down 1% sequentially).</li><li>Revenue was largely in-line with guidance and consensus.</li><li>GPM was 9.2% vs. 6.4%/11.4% in 1Q24/4Q24, within the guided range towards the lower bound, missing consensus estimates by 1.3ppts. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Hua Hong Semi announced 1Q25 results. Revenue was up 17.6% YoY/flattish QoQ at US$541mn, a mixed impact of higher wafer shipment (up 42% YoY and up 7% QoQ) and continuous ASP pressure (down 2% YoY and down 1% sequentially).Revenue was largely in-line with guidance and consensus.GPM was 9.2% vs. 6.4%/11.4% in 1Q24/4Q24, within the guided range towards the lower bound, missing consensus estimates by 1.3ppts. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hua Hong Semi (1347 HK) - 1Q25 Revenue In-Line; GPM Under Pressure

Technology / Semiconductor / Internet Research

Nicolas Baratte

<ul>
<li>Operating loss in 1Q25 will persist in 2Q25 – I expect throughout 2025. Hua Hong rapid capacity increase is supposedly sold out but D&amp;A is increasing much faster than revenue. </li>
<li>Consensus is not expecting an end-demand slowdown resulting from US import tariffs, or sluggish China domestic consumption. Consensus expects Hua Hong to sell its capacity increase fully. </li>
<li>Given losses in 1H25, Consensus EPS forecast is too high for 2025, probably for 2026 as well. Stock is expensive at 43x 2025 EPS, EPS forecasts looks too high.</li>
</ul>


Operating loss in 1Q25 will persist in 2Q25 – I expect throughout 2025. Hua Hong rapid capacity increase is supposedly sold out but D&amp;A is increasing much faster than revenue. 
Consensus is not expecting an end-demand slowdown resulting from US import tariffs, or sluggish China domestic consumption. Consensus expects Hua Hong to sell its capacity increase fully. 
Given losses in 1H25, Consensus EPS forecast is too high for 2025, probably for 2026 as well. Stock is expensive at 43x 2025 EPS, EPS forecasts looks too high.


Hua Hong: Very Poor Margins to Continue, Operating Losses for Longer

<ul>
<li>We analyse the changes of A-H premium on 149 stocks over the last week. The average A-H premium was 87.8% as of Apr 25th.</li>
<li>The average A-H premium changed by -2.7ppt week-on-week, led by health care, financials, energy and offset by communication services.</li>
<li>We highlight weekly changes in A-H premium for Shanghai Petrochemical, Datang Intl Power Gen, Beigene, Maanshan Iron &amp; Steel.</li>
</ul>


We analyse the changes of A-H premium on 149 stocks over the last week. The average A-H premium was 87.8% as of Apr 25th.
The average A-H premium changed by -2.7ppt week-on-week, led by health care, financials, energy and offset by communication services.
We highlight weekly changes in A-H premium for Shanghai Petrochemical, Datang Intl Power Gen, Beigene, Maanshan Iron &amp; Steel.


A-H Premium Weekly (Apr 25th): Shanghai Petrochemical, Datang Intl Power Gen, Beigene

China

Hua Hong Semiconductor is a global pure-play semiconductor foundry specializing in embedded/standalone non-volatile memory, power discrete, analog & power management, and logic & RF technologies. The company provides diversified wafer fabrication and supporting services for various specialty process platforms. It is headquartered in Shanghai, China, and was founded in 2005.

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Hua Hong Semiconductor (1347 HK)

A-H Premium Weekly (May 16th): Cosco Shipping Development, Qingdao Port International

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Cosco Shipping Development, Qingdao Port International,...

Ke Yan, CFA, FRM

HK Short Interest Weekly: Baba, CCB, Jd

We analyzed the latest HK SFC report for aggregate short position as of May 2nd and highlight short interest changes in Baba, CCB, Jd.

Ke Yan, CFA, FRM

Hua Hong Semi (1347 HK) - 1Q25 Revenue In-Line; GPM Under Pressure

Revenue was up 17.6% YoY/flattish QoQ at US$541mn, a mixed impact of higher wafer shipment (up 42% YoY and up 7% QoQ and continuous ASP pressure...

CMB International

Hua Hong: Very Poor Margins to Continue, Operating Losses for Longer

Expect operating losses in 2025 for Hua Hong on rapid capacity increase, increasing D&A outpacing revenue growth. Consensus EPS forecasts are...

Nicolas Baratte

A-H Premium Weekly (Apr 25th): Shanghai Petrochemical, Datang Intl Power Gen, Beigene

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Shanghai Petrochemical, Datang Intl Power Gen, Beigene,...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

A-H Premium Weekly (May 16th): Cosco Shipping Development, Qingdao Port International

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Cosco Shipping Development, Qingdao Port International,...

Ke Yan, CFA, FRM

HK Short Interest Weekly: Baba, CCB, Jd

We analyzed the latest HK SFC report for aggregate short position as of May 2nd and highlight short interest changes in Baba, CCB, Jd.

Ke Yan, CFA, FRM

Hua Hong Semi (1347 HK) - 1Q25 Revenue In-Line; GPM Under Pressure

Revenue was up 17.6% YoY/flattish QoQ at US$541mn, a mixed impact of higher wafer shipment (up 42% YoY and up 7% QoQ and continuous ASP pressure...

CMB International

Hua Hong: Very Poor Margins to Continue, Operating Losses for Longer

​Expect operating losses in 2025 for Hua Hong on rapid capacity increase, increasing D&A outpacing revenue growth. Consensus EPS forecasts are...

Nicolas Baratte

A-H Premium Weekly (Apr 25th): Shanghai Petrochemical, Datang Intl Power Gen, Beigene

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Shanghai Petrochemical, Datang Intl Power Gen, Beigene,...

Ke Yan, CFA, FRM

Expect operating losses in 2025 for Hua Hong on rapid capacity increase, increasing D&A outpacing revenue growth. Consensus EPS forecasts are...