DBS Bank raised Hua Hong's target price to 88 yuan and maintained a "Hold" rating

The research department of DBS Group published a report stating that Hua Hong Semiconductor (01347.HK) achieved record revenue in the fourth quarter of last year, growing 22.4% year-on-year to USD 660 million, mainly benefiting from the recovery of domestic demand and the increase in demand for AI-related applications. The bank expects that stricter U.S. export controls are accelerating the localization development process of mature nodes, predicting that China's integrated circuit self-sufficiency ratio could rise from 18.3% in 2022 to approximately 26.6% in 2027, and Hua Hong will be able to capture more incremental demand for 28 nanometers and above.

DBS maintains a "Hold" rating on Hua Hong, raising the target price from HKD 75 to HKD 88, corresponding to a projected price-to-earnings ratio of about 3 times for 2026, optimistic that the accelerated localization process of China's semiconductor industry will help improve industry sentiment