Fidelity: Maintains "Hold" rating on Hua Hong Semiconductor (01347.HK) and raises target price to HK$140.

According to Zhitong Finance APP, Jefferies released a research report stating that Hua Hong Semiconductor (01347.HK) met expectations in the second quarter, but benefited from an increase in average selling prices and cost control measures, resulting in a gross margin and EBIT that exceeded expectations. Net profit fell short due to lower expectations for other income. The trend in the third quarter is consistent with expectations, and the gross margin aligns as expected. Jefferies maintains a Hold rating on Hua Hong Semiconductor, raising the target price from HKD 91 to HKD 140, and adjusting the gross margin forecast for 2026 to 2027 upward by 3.8 percentage points to reflect a faster-than-expected recovery in gross margin. However, intense competition in mature processes and issues of overcapacity may still pose pressures on overall profitability.