Hua Hong Semiconductor Limited

Ladies and gentlemen, thank you for standing by. Welcome to the Hua Hong Semiconductors First Quarter 2026 Earnings Conference Call. Today's call is hosted by Dr. Peng Bai, Chairman and President, and Mr. Daniel Wang, Executive Vice President and Chief Financial Officer. Please be advised that your dial-ins are in listen-only mode. However, at the conclusion of the management presentation, there will be a question and answer session, at which time you will receive instructions on how to participate. The earnings press release and first quarter 2026 summary slides are available to download at our company's website, www.huahonggrace.com. Without further ado, I would like to introduce you to Mr. Daniel Wang, Executive Vice President and Chief Financial Officer. Thank you.

Good afternoon, everyone. Thank you for joining our Q1 2026 Earnings Conference. Today, we will first have Dr. Peng Bai, our chairman and the president provided an overview of our first quarter performance. I will then take you through our financial results in detail and offer guidance for the upcoming quarter. We then open the floor for a question and answer session. With that, I turn the call over to Dr. Bai.

Dr. Bai. Thank you, Daniel. Good afternoon, everyone. Thank you for joining our earnings call. Hua Hong Semiconductor generated revenue of US$660.9 million in the first quarter of 2026, a year-on-year increase of 22.2%. Gross margin stood at 13%, a year-on-year increase of 3.8 percentage points. Both figures were in line with our guidance. Net profit attributable to shareholders of the parent company amounted to U.S. $20.9 million, marking substantial year-on-year growth. Despite the rapid capacity ramp-up, the company maintained high capacity utilization rates with strong performance across all process technology platforms. MCU, standalone flash, and BCD products deliver the highest growth rates. The company's results were supported by sustained efforts in cost reduction and efficiency enhancement and by a positive demand signal that started at the beginning of the quarter and become stronger over the course of the quarter. The global semiconductor industry is undergoing accelerated transformation as AI and related applications play an increasingly central role in market dynamics. The unmistakably positive impact of AI on worldwide semiconductor market demand, persistent uncertainty in the global supply chain landscape make a more complex market picture that we're facing with. Hua Hong Semiconductor remains steadfast in pursuit of its key objective of becoming a founder leader in specialty process technologies with a core strategy of continuous focusing on market needs, strengthening process technology capabilities, and substantially increasing production capacity scale. In the first quarter, the ramp-up of our 12-inch capacity progressed steadily, with its revenue contribution rising to 62.7%. while our 8-inch production line maintained sound profitability. Meanwhile, the proposed acquisition of Huali Micro has been accepted by the Shanghai Stock Exchange, entering the substantive review phase. The acquisition is currently progressing according to the established schedule and is expected to be completed in the second half of the year. Finally, as a veteran of the industry, I remain confident in a bright future for semiconductor industry globally and in China. I'm fully committed to making Hua Hong Semiconductor an increasingly important player in the industry and deliver sustainable value to our shareholders. Now, I would like to hand the call over to our CFO, Mr. Daniel Wang, for his comments. Daniel.