By Jiahui Huang
Shares of Hua Hong Semiconductor tumbled after quarterly profit sank and the company guided for weaker sales amid a continued downturn in the global chip industry.
Hong Kong-listed shares fell 13% to 17.48 Hong Kong dollars (US$2.24) on Friday, extending losses this year to 36%. The benchmark index was down 1.6%, with tech stocks slipping partly on Nasdaq weakness overnight.
In Shanghai, where the state-owned company began trading in August after raking in nearly US$3 billion in one of the year’s biggest offerings globally, the stock was 4.2% lower.
The Chinese chip maker said late Thursday that revenue in the third quarter fell 9.7% from a year earlier to US$568.5 million and net profit dived 87% to US$13.9 million.
It also forecast revenue to slip further in the final quarter of the year, to between US$450 million and US$500 million. That could mark the company’s weakest sales level since the third quarter of 2021.
Junjun Tang, the company’s executive director, in a statement highlighted a “complex and constantly changing” macro environment, saying “the semiconductor market has not yet recovered.”
Analysts from brokerage firms, including Jefferies and Morgan Stanley, downgraded Hua Hong and trimmed target prices, according to media reports.
Kaiyuan Securities analyst Xiang Liu said the chip industry weakness is a global phenomenon, adding that Hua Hong’s capacity expansion reflected its confidence in future growth.
Write to Jiahui Huang at jiahui.huang@wsj.com
By Jiahui Huang
Shares of Wynn Macau fell after a recovery in casino activity came up short of some analysts’ expectations, even as they said gambling in the regional hub will likely grow in the final months of the year.
The casino operator’s shares were down 14% at HK$6.02 in afternoon trade Friday, on track for their worst single-day performance in more than a year.
The falls come despite positives in the company’s third-quarter results.
Wynn Macau’s revenue in the third quarter was about seven times the amount it posted a year earlier, it said early Friday. That speaks to the return of gambling in Macau as China eased pandemic-era restrictions.
The net loss of the Macau operations of U.S.-based casino company Wynn Resorts improved too, narrowing to US$6.2 million from a loss of US$242.0 million a year ago. Adjusted earnings before interest, taxes, depreciation and amortization recovered to about 85% of pre-Covid levels.
But analysts said the results came up short.
“Wynn Macau’s 3Q23 Ebitda was a miss,” Citi analysts George Choi and Ryan Cheung said in a research note, pointing to lighter-than-expected retail sales, as well as “the surprisingly low mass hold rate” at the company’s peninsula property.
The trimmed their target price on the stock to HK$9.65 from HK$10.30. Still, they maintained their buy call, partly a nod to the shares’ weakness. With Friday’s slide, shares are down about 30% this year and trading well below historical averages.
The analysts also think business looks strong heading into the fourth quarter, pointing to 98% hotel occupancy in October, and say Wynn Macau’s market share appears unchanged at a little over 13%.
Pianpian He, an analyst with Huatai Securities, said it will take time for the company to transform from a VIP focus to attract more non-VIP customers and boost non-gaming revenues.
The casino’s gross gaming revenue was at about 65% of prepandemic levels, lower than an industry average of 69%, the analyst said in a research note.
It remains to be seen “if the company can attract customers to come back for a second time, and [if it can] boost the transformation” of its clientele, the analyst added.
Write to Jiahui Huang at jiahui.huang@wsj.com
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