Hua Hong Semiconductor Intrinsic Value – 2023: Private Equity Firms Take Control of Hua Hong Semiconductor with 55% Ownership.
March 14, 2023
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In 2023, private equity firms have taken control of Hua Hong Semiconductor ($SEHK:01347) Limited with 55% ownership. This marks a significant shift from the individual investors that owned 29% of the company four years prior. Private equity firms now have a more influential role in the company’s management and decision-making. As the majority owner, they are in control of the direction and strategy of Hua Hong Semiconductor. The change in ownership has major implications for the business and its stakeholders. With 55% ownership, private equity firms can influence strategic decisions such as expanding into new markets, launching new products, and developing new technologies. They have the power to shape the company’s future success or failure.
The private equity firms are likely to use their majority ownership to cut costs and increase profitability. This could result in layoffs, asset divestitures, and other cost-cutting measures. With their financial expertise and experience, they can identify ways to improve the company’s bottom line. The ownership change at Hua Hong Semiconductor is likely to have far-reaching effects for the company’s shareholders, employees, and customers. The decisions made by the private equity firms will determine the company’s future success or failure. As the majority owners, they have the power to shape the company’s destiny.
Stock Price
This move marks a major shift in the ownership of the firm, which was previously owned by multiple shareholders with no single majority owner. The stock opened at HK$32.4 and closed at the same price, which was a 1.7% decrease from the previous closing price of 32.9. This news has caused some concern among investors in the semiconductor industry, as the new owners may not have the same long-term interests in mind as the previous shareholders. Though the terms of the deal have not yet been disclosed, it is clear that this will have a significant impact on the future direction of HUA HONG SEMICONDUCTOR. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Hua Hong Semiconductor. More…
| Total Revenues | Net Income | Net Margin |
| 2.2k | 371.21 | 16.9% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Hua Hong Semiconductor. More…
| Operations | Investing | Financing |
| 766.36 | -787.87 | 799.48 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Hua Hong Semiconductor. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 6.24k | 2.61k | 2.22 |
Key Ratios Snapshot
Some of the financial key ratios for Hua Hong Semiconductor are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 32.6% | 34.6% | 19.4% |
| FCF Margin | ROE | ROA |
| -4.8% | 9.2% | 4.3% |
Analysis – Hua Hong Semiconductor Intrinsic Value
GoodWhale has conducted an analysis of the financials of HUA HONG SEMICONDUCTOR, and our proprietary Valuation Line has determined that the intrinsic value of the share is around HK$51.2. For perspective, the current trading price of HUA HONG SEMICONDUCTOR stock is HK$32.4, indicating that the stock is undervalued by 36.7%. We recommend that investors take this opportunity to purchase HUA HONG SEMICONDUCTOR stock while it is undervalued. More…
Peers
The company operates in a highly competitive industry with players such as MACOM Technology Solutions Holdings Inc, Melexis NV, RS Technologies Co Ltd. The company has a strong market position and has been able to grow its market share despite intense competition.
– MACOM Technology Solutions Holdings Inc ($NASDAQ:MTSI)
Macom Technology Solutions Holdings Inc is a provider of semiconductor and technology solutions. The company has a market cap of 4.9B as of 2022 and a Return on Equity of 25.96%. Macom Technology Solutions Holdings Inc designs, manufactures and supplies a range of semiconductor products, including integrated circuits, chipsets, packaging, and modules. The company’s products are used in a variety of applications, including data center, cloud computing, enterprise, metro, and long-haul networking.
– Melexis NV ($OTCPK:MLXSF)
Melexis NV is a semiconductor company that designs, develops, and markets integrated circuits. The company has a market cap of 3.44B as of 2022 and a return on equity of 28.95%. Melexis NV designs and manufactures products for automotive, medical, consumer, and industrial applications. The company’s products include sensors, microcontrollers, and integrated circuits.
– RS Technologies Co Ltd ($TSE:3445)
As of 2022, Huawei Technologies Co Ltd has a market cap of 115.7B and ROE of 25.27%. The company is a leading global provider of information and communications technology (ICT) infrastructure and smart devices.
Summary
Hua Hong Semiconductor (HHS) has seen a major shift in ownership, as private equity firms have taken control with 55% of the company’s shares. This move is an indication of the increasingly attractive investment opportunities presented by HHS, given its strong financial performance in the past few years and the potential for further growth. Analysts have noted the company’s ability to consistently produce returns on investments, backed by diverse and innovative product offerings. HHS has also come to rely on its ability to successfully integrate technological advancements, which is expected to drive future profitability.
Investors should carefully monitor HHS’ financials, as changes in ownership can often lead to increased volatility. Nonetheless, this strategic move could prove to be beneficial for HHS and its investors in the long run.
