AI TRENDS | Goldman Sachs Raises Hua Hong Semiconductor Target Price to HK$333 on AI-Driven Margin Outlook

Goldman Sachs raised its target price for Hua Hong Semiconductor (01347.HK) to HK$333 from HK$174 and maintained a “buy” rating, citing expectations that AI-related demand will support the company’s outlook. According to Jin10, Goldman Sachs said it was optimistic about Hua Hong Semiconductor’s development prospects amid growth in equipment demand. The bank said improving capabilities of major AI models, including Meituan-W’s (03690.HK) newly released LongCat2.0, were expected to lift demand for AI chips and data center power management chips. It added that the wider adoption of generative AI was expected to continue supporting related demand, and said Hua Hong was expected to keep benefiting from rising AI demand. Goldman Sachs expected the company’s new 12-inch capacity to continue increasing, with its product mix upgrading toward 40-nanometer and 28-nanometer processes. The bank raised its net profit forecasts for fiscal years 2027 to 2029 by 1% to 8%. It also expected operating profit margin to gradually improve from 1% in fiscal year 2026 to 4%, 8%, and 12% in fiscal years 2027 to 2029, and to reach normalized levels of 14% and 17% in fiscal years 2030 to 2031.