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Investing.com - Goldman Sachs upgraded Hua Hong Semiconductor Ltd (HK:1347) (OTC:HHUSF) from Neutral to Buy and set a price target of HK$68.10.
The upgrade is driven by growing opportunities from artificial intelligence applications, including power management integrated circuits (PMIC) for data centers and mature node integrated circuits for edge AI devices.
Goldman Sachs cited pricing improvement supported by solid utilization rates in recent quarters and sustainable long-term demand expansions from growing domestic clients and the "China for China" production trend.
The investment bank also highlighted Hua Hong’s continuous capacity scale-up with technology node migration, noting the company will enter 28nm production in 2027.
While the stock trades at 43x 2026 PE, within its historical range, Goldman Sachs expects more upside potential against Hua Hong’s projected 63% net income compound annual growth rate from 2025 to 2029.
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