HK Stock Market Move | Hua Hong Grace Semiconductor (01347) falls more than 8% again, down over 65% from its high; Goldman Sachs previously noted that its third-quarter guidance fell short of expectations.

Hua Hong Grace Semiconductor (01347) fell more than 8% again, down over 65% from its July high of HK$219. As of press time, it was down 8.49% at HK$76, with turnover of HK$1.43 billion. On the news front, Hua Hong Grace Semiconductor's third-quarter results are approaching. Goldman Sachs previously noted that although Hua Hong Grace Semiconductor's third-quarter gross margin guidance is 16% to 18%, higher than the bank's forecast of 15.3% and the market expectation of 16.5%, the midpoint of its third-quarter revenue guidance of US$775 million is 11% and 6% below the bank's and the market's expectations, respectively, underperforming expectations. It is worth noting that Hua Hong Grace Semiconductor's Wuxi Phase III semiconductor company increased its capital to US$4.17 billion. The total investment in Hua Hong Grace Semiconductor's Wuxi Phase III project is US$6.95 billion, and it will build a 12-inch specialty process production line with a monthly capacity of 55,000 wafers. CLSA pointed out that wafer foundry capacity utilization remains high, driven by AI-related chip demand, the return of overseas orders, and domestic manufacturing, with average selling prices continuing to rise quarter on quarter, but new capacity investment and increased depreciation for advanced processes will constrain margin improvement.