Huahong Semiconductor (01347) rose 4% after performancescratchedu.58%, at HK$17.82, with a turnover of HK$365 million.

UBS released a report stating that Huahong Semiconductor's sales in the first quarter were US$460 million, a quarter-on-quarter increase of 1%, shipments increased by 8%, and the average selling price dropped by 6%. Due to increased utilization, gross profit margin increased from 4% in the previous quarter to 6.4%, slightly above the guidance target of 3% to 6%.

The bank gave him a "neutral" rating with a target price of HK$17. UBS believes that Huahong's worst situation is over, but there is limited room for profit margin growth. The bank may consider moving to a more positive view if there are signs of stronger recovery in technology or semiconductor demandscratchedu; Huahong is accelerating the improvement of its 12-inch product portfolio with higher average selling prices and profit margins; the expansion of mature process foundries in China is showing signs of slowing.