Shares of HUA HONG GRACE (01347) extended their decline, dropping more than 4% in early trading before paring losses to 3.86%, reaching HK$134.5 with turnover of HK$2.72 billion.

The semiconductor firm posted record second-quarter revenue of $717.5 million, up 26.8% year-over-year and exceeding the estimated $702.7 million. Gross margin came in at 16.5%, a 5.6-percentage-point improvement year-over-year and above the projected 14.9%. Net profit attributable to parent shareholders stood at $38.6 million, slightly below the anticipated $39.4 million.

Goldman Sachs noted that the company guides for third-quarter revenue growth of 7% to 9% sequentially, with gross margin expected between 16% and 18%, compared to 16.5% in the second quarter, indicating continued margin improvement amid capacity expansion. The midpoint of the revenue guidance trails the bank's and market's expectations by 11% and 6%, respectively, marking a softer-than-expected outlook. However, the gross margin guidance of 16% to 18% exceeds Goldman's forecast of 15.3% and the market consensus of 16.5%.