HUA HONG SEMI's revenue in the first half of the year increased by 19.09% year-on-year, while net profit decreased by 71.95% | Financial Report Insights

Hua Hong Semiconductor achieved operating revenue of 8.018 billion yuan in the first half of the year, a year-on-year increase of 19.09%, mainly benefiting from the increase in wafer sales and the mass production contribution of the Hua Hong manufacturing project.

However, the net profit attributable to shareholders of the listed company was only 74 million yuan, a significant year-on-year decrease of 71.95%, primarily due to the capacity ramp-up costs in the early stages of the Hua Hong manufacturing project and the continuous increase in the company's overall R&D investment. During the reporting period, the company's R&D expenses reached 939 million yuan, a year-on-year increase of 21.71%, accounting for 11.99% of operating revenue.

On the 28th, Hua Hong Semiconductor Co., Ltd. announced its financial report for the first half of 2025:

• Operating revenue: 8.018 billion yuan, a year-on-year increase of 19.09%
• Net profit attributable to shareholders: 74 million yuan, a year-on-year decrease of 71.95%
• Gross profit margin: 17.58%, a decrease compared to the same period last year
• Cash flow from operating activities: 1.62 billion yuan, a year-on-year increase of 21.93%

Performance Divergence: Revenue Growth Without Profit Growth

Hua Hong Semiconductor's operating revenue in the first half of 2025 was 8.018 billion yuan, a year-on-year increase of 19.09%. The company's revenue growth was mainly benefited from the increase in wafer sales and the contribution of the Hua Hong manufacturing project (FAB9). This project began risk mass production at the end of 2024, and in the first half of 2025, the capacity ramp-up was rapid, achieving large-scale mass production. Meanwhile, both the 8-inch and 12-inch production lines were operating at full capacity, indicating a recovery in market demand.

However, the net profit attributable to shareholders was only 74 million yuan, a year-on-year plummet of 71.95%. The decline was mainly due to the capacity ramp-up costs in the early stages of the Hua Hong manufacturing project and the continuous increase in the company's overall R&D investment. During the reporting period, the inventory impairment provision reached 633 million yuan, a year-on-year increase of 19.78%; the company's R&D expenses reached 939 million yuan, a year-on-year increase of 21.71%, accounting for 11.99% of operating revenue.

Despite the decline in net profit, the company's cash flow situation is good. The net cash flow generated from operating activities was 1.62 billion yuan, a year-on-year increase of 21.93%. The company's total assets were 86.285 billion yuan, with equity attributable to shareholders of the parent company at 43.785 billion yuan, indicating a robust financial structure.

Capacity Construction Advancing Ahead of Schedule

As a global leader in specialty process wafer foundry, Hua Hong Semiconductor has long-term development potential under the trend of domestic substitution. The company has a strong technical accumulation in specialty process fields such as embedded/standalone non-volatile memory and power devices, with a total of 4,735 authorized patents. As of the end of June 2025, the project has completed the relocation of the process and measurement equipment required for the first batch of capacity, and the second phase of capacity configuration is expected to commence ahead of schedule before the end of 2025.

In terms of technological research and development, the company has achieved significant breakthroughs across various process platforms. The 40-nanometer specialty process platform's Alpha customer products have entered mass production, the new generation of standalone flash memory has achieved large-scale mass production, and the key performance of the 90-nanometer BCD platform has improved by 30%. ** These technological advancements have strengthened the company's competitive advantage in the specialty process field.

From the performance of the process platform business, the analog and power management platform benefits from the trend of domestic supply chains and the growing demand for AI servers, with revenue maintaining double-digit growth year-on-year and quarter-on-quarter. The power device platform also performed strongly, with the revenue of the trench super junction MOSFET platform achieving double-digit growth.

In terms of regional distribution, the mainland China and Hong Kong markets remain the main sources of revenue, contributing 6.549 billion yuan in the first half of the year. The company continues to promote the "China for China" strategy for overseas customers while actively carrying out ecological chain construction activities