Daiwa released a research report stating that HUA HONG SEMI (01347) reported weaker-than-expected Q3 net profit due to income tax and minority interest impacts, but other key metrics exceeded expectations. The firm believes the company will benefit from downstream demand growth, enhancing its pricing power and operational flexibility, thereby improving product mix, average selling prices, and margins. Additionally, Daiwa expects HUA HONG SEMI to capitalize on the sustained AI momentum in 2024 as a wafer supplier for AI co-processor chips. The "China for China" strategy of overseas clients and synergies from the Fab5 facility acquisition further support the upgrade. Consequently, Daiwa raised its rating from "Hold" to "Buy" and lifted the target price from HK$42 to HK$110.