Hua Hong Grace Semiconductor reported record‐high first-half 2026 revenue of USD1.38 billion, up 24.5% year-on-year, driven by a 17.9% increase in wafer shipments and higher average selling prices. Gross profit surged 83.2% to USD204.46 million, lifting gross margin to 14.8% from 10.1% a year earlier.

The company cut its net loss to USD13.39 million, an 84.2% improvement versus the prior-year period. Profit attributable to equity holders turned positive at USD59.57 million, translating into basic and diluted earnings per share of USD0.034, compared with USD0.007 a year ago.

Operating cash flow more than doubled to USD468.48 million, but heavy capital expenditure of USD1.28 billion and equity investments pushed free cash flow into negative territory. Net cash outflow from investing activities widened to USD1.19 billion.

Total interest-bearing bank borrowings increased 11.8% to USD3.57 billion, while cash and cash equivalents slipped 7.4% to USD4.53 billion. The gearing ratio rose to 6.05% (31 December 2025: 1.29%) as the group shifted part of its debt profile from long-term to short-term funding.

On the balance sheet, non-current assets expanded 12.2% to USD8.80 billion, supported by a 9.1% rise in property, plant and equipment and a 64.5% jump in equity investments measured at fair value through other comprehensive income. Net assets grew 5.8% to USD9.70 billion.

All tooling for the 83-thousand-wafers-per-month Wuxi Phase II (Fab 9) was fully installed by end-June; target capacity is expected by Q3 2026. Specialty technology milestones included risk production of a 40 nm eFlash platform, automotive-grade 55 nm eFlash adoption, and volume ramp of next-generation IGBT and super-junction processes.

Regulatory approval for the proposed RMB8.27 billion acquisition of a 97.5% stake in Shanghai Huali Microelectronics was secured on 8 July 2026; closing is expected in Q3. A non-public RMB share issuance of up to RMB7.56 billion remains planned to fund line upgrades and working capital.

The board declared no interim dividend.

No breach of the Corporate Governance Code was reported except the continued combination of Chairman and President roles, a structure the board believes expedites strategic execution while adequate board independence is maintained.

The audit committee, comprising one Non-Executive Director and two Independent Non-Executive Directors, reviewed and approved the interim results. The interim report will be available on the Hong Kong Stock Exchange and company websites.