Hua Hong Semiconductor (1347) investor relations material

Executive summary

• Q2 2025 revenue reached $566.1 million, up 18.3% year-over-year and 4.6% sequentially, with gross margin at 10.9%, both exceeding guidance, driven by increased wafer shipments and record 108.3% capacity utilization.

• Net profit attributable to shareholders was $8 million, up 19.2% year-over-year and 112.1% sequentially, while overall net loss narrowed to $32.8 million.

• Strategic focus on specialty technology, cost reduction, and efficiency led to optimization of operational metrics and technology platform diversification.

• New 12-inch production line in Wuxi ramping up, supporting upgrades in capacity and technology.

Financial highlights

• Gross profit was $61.6 million, up 23.1% year-over-year; operating expenses rose 8.4% to $97.9 million, mainly from higher engineering wafer and depreciation costs.

• Other income net was $10.6 million, up 54% year-over-year, due to lower FX losses, finance costs, and higher government subsidies.

• Basic EPS was $0.005, up 25% year-over-year and 150% sequentially; annualized ROE at 0.4%.

• Net cash from operating activities was $169.6 million, up 75.1% year-over-year; capital expenditures totaled $407.7 million.

Outlook and guidance

• Q3 2025 revenue expected between $620 million and $640 million, with gross margin projected at 10%–12%.

• Price adjustments initiated in Q2 will reflect in Q3 and Q4, with a modest single-digit increase, mainly in 12-inch and IC platforms.

• Fab 9 capacity expansion to be completed by mid-2026, with new capacity expected in 2027.

• The company plans to accelerate capacity expansion, enhance R&D, and strengthen supply chain management.