HANA Falls 6% amid Concerns over Weak Demand from China

HANA stocks fell sharply on Thursday due to concerns over weak demand from China, while the management expected businesses to recover in the second half of 2024.


The share price of Hana Microelectronics Public Company Limited (SET: HANA) fell 3.00 baht or 6.22% to close at 45.25 baht with a trading value of 1,120 million baht. 


Finansia Syrus Securities (FSS) indicated that HANA informed the analyst with a negative tone after the conference call with the company that the outlook of Q4/23 to Q1/24 is not looking so bright due to China’s slow recovery.

At present, the factory in Ayutthaya Province (33% of total revenue) manufactures Integrated Circuits (IC) with 52% of utilization rate, affected by China’s weak demands. The management demonstrated that 52% of utitlization rate is not enough to make profit, but the attempt to adjust productivity has already been done to maintain the equity. The situation will continue for the next two quarters with expectation to recover in Q2/24 (focus mainly on China).

Weak revenue from Silicon Carbide (SiC) in Q3/23 was due to the lower demand in China, especially the demand of high-end EV and the fact that manufacturers were turning to Low-cost EV (Not using SiC). Additionally, the company is still facing problems regarding productivity, which are expanding in the present. The new equipment is subsequently being imported by the second half of 2023 to the first half of 2024.

The management expected the revenue from SiC to recover in Q4/24 as the new equipment are on their way and expresses their vision that there will be more medium-end EV (turn from low-end EV). The target revenue remains unchanged, but the break even point for EBITDA is shifted from the first half to the second half of 2024.

Additionally, the management is in the process of reviewing the revenue, depending mainly on the recovery of China.