HUA HONG SEMI (01347.HK, 688347.SH) Q1 2026 Earnings Presentation

Daniel Wang thanked participants for joining and outlined the agenda: Dr. Peng Bai would provide an overview of Q1 results, followed by his own detailed financial commentary and guidance for the next quarter.

Dr. Peng Bai reported Q1 2026 revenue of $669M, a YoY growth of 22.2%, and a gross margin of 13%. Net income attributed to shareholders was $209M, reflecting significant growth driven by higher capacity utilization and robust demand in MCU, Flash, and BCD products. Global semiconductor demand, influenced by AI, developed positively despite supply chain uncertainties. Hua Hong's 12-inch capacity expansion reached 62.7% contribution, and the Huali Microelectronics acquisition was under review, expected to conclude by H2 2026.

Daniel Wang presented Q1 revenue of $669M (up 22.2% YoY, 0.2% QoQ), a gross margin of 13%, operating expenses of $105.6M (up 8.8% YoY), and net profit attributed to shareholders of $209M (up 458.1% YoY). Cash flow from operations grew by 159.9% YoY to $130.4M, and Q2 revenue was projected at $690M-$700M with a 14%-16% gross margin.

Dr. Peng Bai noted rising memory prices, especially in DRAM, with more moderate increases in NOR Flash. A 10%-15% NOR Flash price surge was expected due to supply constraints.

Dr. Peng Bai updated on the Wuxi site, where the third fab (Fab 9B) began construction in March. Equipment installation was scheduled for Q4 2026, with full-scale production targeted for 2027. He noted no U.S. export restrictions affecting equipment procurement.

Dr. Peng Bai highlighted Hua Hong Group's coordination in advanced packaging and expressed plans to enter the silicon photonics segment, a high-growth sector with strong AI applications.

Daniel Wang attributed projected Q2 revenue growth (5% sequentially) to increases in both shipment volume and ASP, especially in applied technology platforms.

Dr. Peng Bai discussed robust demand for power management ICs driven by AI infrastructure growth and mentioned some material cost increases. Challenges in the consumer sector were offset by strong growth in AI-related fields.

Dr. Peng Bai emphasized the importance of silicon carbide and gallium nitride in Hua Hong’s future power device expansion and discussed silicon photonics' potential as a new business area.