CGS International Securities (Thailand) maintains an “Add” rating for Hana Microelectronics Public Company Limited (SET: HANA) with a target price of THB25, following a slight positive outlook after the company’s recent analyst meeting. Management anticipates third-quarter sales will be relatively soft but CGSI expects sequential improvement, supported by typical seasonal uplift.
Profitability continues to face headwinds from the strong Thai baht. However, Hana projects margin improvement quarter-over-quarter, aided by higher factory utilization rates and a smaller drag from inventory writedowns seen previously.
The company announced a new initiative centered on solid-state cooling devices, with production scheduled to begin in the fourth quarter of 2025 and scaling up into 2026. While initial financial contributions from this project are likely to be modest, Hana sees it as providing an immediate boost to capacity usage and opening the door for further growth in coming years.
On the Powermaster (PMS) business, management clarified that the larger-than-expected losses in the second quarter of 2025 were mainly due to a THB174 million writedown of aging materials. The company expects less impact from further writedowns for the rest of the year and noted that writedowns can partially reverse once the materials are utilized and sold.
PMS sales in the second quarter were below expectations as clients delayed orders. Management, however, forecasts an improvement in third-quarter sales as customers begin to resume purchasing.
To spur recovery in the PMS segment, Hana is moving silicon production from South Korea to China and will start producing Silicon Carbide devices at Chinese foundries, including their own-design products, to meet increased requirements for locally produced components. This operational shift is intended to drive down costs and enhance price competitiveness. The remaining capacity in Korea will focus on supporting Korean and non-China markets.
The share price of HANA settled 8% higher on Thursday, closing at THB 23.20 per share.
