CMB International has reaffirmed its "Hold" rating on HUA HONG SEMI (01347) while increasing the target price from HK$68 to HK$80. The report notes the company's ongoing improvements in product mix and scale, but highlights that valuations appear elevated. HUA HONG SEMI reported its fourth-quarter and full-year 2025 results, with quarterly revenue reaching a record high of US$660 million, up 22.4% year-on-year and 3.9% sequentially, driven by high capacity utilization and strong shipments. The fourth-quarter gross margin stood at 13%, down from 13.5% in the previous quarter but in line with management guidance. Net profit for the quarter was US$17 million, declining 53.4% quarter-on-quarter, primarily due to increased labor costs. Full-year 2025 revenue grew 20% year-on-year to US$2.4 billion, meeting both the firm's expectations and market consensus. The annual gross margin was 11.8%, also aligning with projections, though partially offset by higher depreciation expenses. Looking ahead, management guided for first-quarter 2026 revenue between US$650 million and US$660 million, with a gross margin ranging from 13% to 15%. The report acknowledges the company's effective execution in maintaining high capacity utilization and accelerating its 12-inch product portfolio in 2025, but cautions that current valuations seem stretched.