HK Stock Market Move | HUA HONG SEMI (01347) rises over 4%, plans to sell 8.2 billion to acquire Huali Micro. Asset injection expected to boost performance.

HUA HONG SEMI (01347) rose by more than 4%, as of the time of writing, it was up by 4.23% to HK$88.65, with a trading volume of HK$3.227 billion. In terms of news, Hua Hong Semiconductor recently announced its intention to invest HK$8.268 billion to acquire 97.4988% of the equity of Huahong Microelectronics, and raise supporting funds of up to HK$7.556 billion. Through this transaction, substantial resolution of competition between Hua Hong Semiconductor and Huahong Microelectronics in the 65/55nm, 40nm sectors has been achieved. After integration, Hua Hong Semiconductor will add 38,000 wafers per month of 65/55nm, 40nm capacity, and further enhance the scale of 12-inch wafer foundry capacity. Huatai pointed out that based on calculations for 2024 data: in terms of profit, Huahong Microelectronics, as a high-quality wafer foundry asset, its injection may immediately thicken performance. The projected net profit attributable to the parent company is expected to increase by 151% from HK$380 million to HK$960 million, driving EPS to increase by 127% from HK$0.22 to HK$0.50, and the profitability may achieve a significant improvement; in terms of assets, considering supporting financing, the company will introduce approximately HK$7.6 billion in cash flow, total assets/ net assets attributable to the parent company are expected to increase by 16%/21%, greatly enhancing liquidity and helping upgrade production lines.