华虹宏力：港股公告：2026年中期报告
中期報告
2026INTERIM REPORT
（股份代號：01347）（於香港註冊成立之有限公司）
HUA HONG GRACE SEMICONDUCTOR LIMITED
華虹宏力半導體有限公司(Incorporated in Hong Kong with limited liability)
(Stock Code: 01347)
DEFINITIONS
INTERIM REPORT 2026
In this interim report, unless the context otherwise requires, the following terms shall have the meanings set out below.“Board”the Board of Directors of the Company;“China”or“the PRC”the People’s Republic of China, but for the purpose of this interim report and forgeographical reference only, except where the context otherwise requires, referencesin this interim report to“China”and the“PRC”do not include Taiwan, the MacauSpecial Administrative Region and Hong Kong;“Company”or“our Company”
Hua Hong Grace Semiconductor Limited, formerly known as Hua Hong SemiconductorLimited, a company incorporated in Hong Kong with limited liability in January 2005,and completed its name change in May 2026;“Director(s)”the Director(s) of the Company;“Group”our Company and our subsidiaries;“HHGrace Shanghai”Shanghai Huahong Grace Semiconductor Manufacturing Corporation* (
), a company incorporated in the PRC in January 2013 and a wholly-owned subsidiary of the Company;“Hong Kong Listing Rules”the Rules Governing the Listing of Securities on The Stock Exchange of Hong KongLimited, as amended or supplemented from time to time;“Hong Kong Model Code”the Model Code for Securities Transactions by Directors of Listed Issuers as set out inAppendix C3 to the Hong Kong Listing Rules;“Hong Kong SFO”the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), asamended or supplemented from time to time;“Hong Kong Stock Exchange”
The Stock Exchange of Hong Kong Limited;“Hua Hong Wuxi”Hua Hong Semiconductor (Wuxi) Limited (()), a companyincorporated in the PRC in October 2017 and held as to 51% by the Group;“Huali Micro”Shanghai Huali Microelectronics Corporation (), a companyincorporated in the PRC in January 2010 and completed the company division inAugust 2025, a connected person of the Company;“RMB Share(s)”or
“A Share(s)”
the ordinary share(s) of the Company which are listed on the STAR Market and traded
in RMB;“SSE”the Shanghai Stock Exchange;“SSE STAR Market”the Science and Technology Innovation Board of the Shanghai Stock Exchange.“Wuxi Phase II”Hua Hong Semiconductor Manufacturing (Wuxi) Co., Ltd.(()
), a company incorporated in the PRC in June 2022 and held as to 51% by the
Group;
CORPORATE INFORMATION
HUA HONG GRACE SEMICONDUCTOR LIMITED
Board of DirectorsExecutive DirectorPeng Bai(Chairman and President)Non-Executive DirectorsJun YeGuodong SunBo ChenChengyan XiongIndependent Non-Executive DirectorsStephen Tso Tung ChangKwai Huen Wong, JPSonglin FengCompany SecretariesKa Ming Ho, Catherine(appointed on 12 May 2026)
Sui Har Lee(resigned on 12 May 2026)
Authorized RepresentativesPeng BaiKa Ming Ho, CatherineAudit CommitteeStephen Tso Tung Chang(Chairman)Chengyan XiongSonglin FengRemuneration CommitteeKwai Huen Wong, JP(Chairman)Jun YeSonglin FengNomination CommitteePeng Bai(Chairman)
Kwai Huen Wong, JPSonglin FengWebsitewww.huahonggrace.com
AuditorErnst & Young
Certified Public Accountants
27/F, One Taikoo Place979 King’s Road, Quarry BayHong Kong, PRC
Hong Kong Legal AdvisorHerbert Smith Freehills Kramer23/F, Gloucester Tower15 Queen’s Road CentralHong Kong, PRCPrincipal BanksChina Construction Bank Shanghai BranchNo. 900, Lujiazui Ring RoadPudong New AreaShanghai, PRCChina Development Bank Shanghai BranchNo. 68, Puming RoadPudong New AreaShanghai, PRCChina Merchants Bank Co., Ltd. Shanghai BranchNo.1088 Lujiazui Ring RoadPudong New AreaShanghai, PRCChina Construction Bank Corporation Hong KongBranch28/F, CCB Tower, 3 Connaught Road, CentralHong Kong, PRCBank of Communications Co., Ltd. Hong Kong Branch20 Pedder Street, CentralHong Kong, PRCChina Development Bank Jiangsu BranchNo. 232, Middle Jiangdong RoadNanjing, Jiangsu, PRCAgricultural Bank of China Wuxi Xinwu SubbranchNo. 26, Hefeng Road, Xinwu DistrictWuxi, Jiangsu, PRCChina Construction Bank Wuxi High and NewTechnology Industrial Development Zone SubbranchNo. 26, Hefeng Road, Xinwu DistrictWuxi, Jiangsu, PRCChina CITIC Bank Wuxi New District SubbranchNo. 26, Hefeng Road, Xinwu DistrictWuxi, Jiangsu, PRC
INTERIM REPORT 2026
CORPORATE INFORMATION
Bank of China Wuxi High and New TechnologyIndustrial Development Zone SubbranchNo. 140, Wangzhuang Road, Xinwu DistrictWuxi, Jiangsu, PRCBank of Communications Co., Ltd. Wuxi BranchNo.8, 2nd Financial Street, Binhu DistrictWuxi, Jiangsu, PRC
Share RegistrarHong Kong shares:
Tricor Investor Services Limited17/F, Far East Finance Centre16 Harcourt RoadHong Kong, PRCA shares:
China Securities Depository and Clearing CorporationLimited, Shanghai BranchNo. 188 South Yanggao RoadPudong New AreaShanghai, PRCRegistered OfficeRoom 2212, Bank of America Tower12 Harcourt Road, CentralHong Kong, PRCPrincipal Places of BusinessNo. 288 Halei RoadPudong New AreaShanghai, PRCPostcode: 201203No. 30, 30-1, 30-2, Xinzhou RoadXinwu DistrictWuxi, Jiangsu, PRCPostcode: 214028
Stock CodeHong Kong Stock Exchange: 01347Shanghai Stock Exchange: 688347
KEY FINANCIALS
HUA HONG GRACE SEMICONDUCTOR LIMITED
%
US$ millionUS$
Profit attributable to owners of the parentEarning per share
0.00
15.0%
1,2001,000
1,4001,600
1,107.0
1,378.5
14.8%
10.0%
5.0%
0.0%
8.5%
10.1%
11.7
59.6
0.034
0.04
0.02
0.007
0.022
938.5
1H 20251H 20241H 20261H 20251H 20241H 2026
1H 20251H 20241H 20261H 20251H 20241H 2026
US$ million
38.5
20.0%
MANAGEMENT DISCUSSION AND ANALYSIS
INTERIM REPORT 2026
Financial Performance
1H 20261H 2025ChangeUS$’000US$’
UnauditedUnauditedRevenue1,378,4621,107,00224.5%Cost of sales(1,173,999)(995,394)17.9%Gross profit204,463111,60883.2%Other income and gains47,21259,916(21.2)%Selling and distribution expenses(5,319)(4,844)9.8%Administrative expenses(206,951)(189,051)9.5%Impairment losses on trade and notes receivables(2,426)(1,132)114.3%Other expenses(11)(17,300)(99.9)%Finance costs(57,104)(41,551)37.4%Share of profits of associates9,6441,243675.9%Loss before tax(10,492)(81,111)(87.1)%Income tax expense(2,897)(3,852)(24.8)%Loss for the period(13,389)(84,963)(84.2)%Attributable to:
Owners of the parent59,56811,702409.0% Non-controlling interests(72,957)(96,665)(24.5)%RevenueRevenue was a record high of US$1,378.5 million, an increase of 24.5% compared to 1H 2025, primarily driven byincreased wafer shipments and improved average selling price.Cost of salesCost of sales was US$1,174.0 million, an increase of 17.9% compared to 1H 2025, primarily due to increased wafershipments and increased depreciation costs.Gross profitGross profit was US$204.5 million, an increase of 83.2% compared to 1H 2025, primarily driven by improved averageselling price and cost reduction efforts, partially offset by increased depreciation costs.Other income and gainsOther income and gains were US$47.2 million, a decrease of 21.2% compared to 1H 2025, primarily due to decreasedgovernment subsidies and interest income, partially offset by increased foreign exchange gains.Administrative expensesAdministrative expenses were US$207.0 million, an increase of 9.5% compared to 1H 2025, primarily due to increasedlabor and tax expenses.
MANAGEMENT DISCUSSION AND ANALYSIS
Impairment losses on trade and notes receivablesImpairment losses on trade and notes receivables were US$2.4 million, an increase of 114.3% compared to 1H 2025,primarily due to increased trade receivables.Other expensesOther expenses were US$0.01 million, a decrease of 99.9% compared to 1H 2025, primarily due to foreign exchangegains in the current period as compared to foreign exchange losses in 1H 2025.Finance costsFinance costs were US$57.1 million, an increase of 37.4% compared to 1H 2025, primarily due to increased bankborrowings.Share of profits of associatesShare of losses of associates were US$9.6 million, an increase of 675.9% compared to 1H 2025, due to increasedprofit realized by the associates.Income tax expenseIncome tax expense was US$2.9 million, a decrease of 24.8% compared to 1H 2025, primarily due to increasedreversal of dividend withholding tax.Loss for the periodAs a result of the cumulative effect of the above factors, loss for the period was US$13.4 million, a reduction in loss of
84.2% compared to 1H 2025.
INTERIM REPORT 2026
MANAGEMENT DISCUSSION AND ANALYSIS
Financial Status
30 June2026
31 December
2025ChangeUS$’000US$’
UnauditedAuditedNon-current assetsProperty, plant and equipment7,286,2666,676,4429.1%Investment properties226,803219,7723.2%Investment in associates183,072150,22221.9%Equity instruments designated at fair value through other comprehensive income787,420478,79964.5%Other non-current assets321,199321,840(0.2)%Total non-current assets8,804,7607,847,07512.2%Current assetsInventories584,782544,3687.4%Trade and notes receivables322,463282,05314.3%Other current assets936,223786,97419.0%Time and pledged deposits45,35599,494(54.4)%Cash and cash equivalents4,532,2244,893,808(7.4)%Total current assets6,421,0476,606,697(2.8)%Current liabilitiesTrade payables289,753330,370(12.3)%Interest-bearing bank borrowings1,902,063403,748371.1%Government grants115,74089,04930.0%Other current liabilities866,5451,033,054(16.1)%Total current liabilities3,174,1011,856,22171.0%Net current assets3,246,9464,750,476(31.7)%Non-current liabilitiesInterest-bearing bank borrowings1,665,4852,787,096(40.2)%Other non-current liabilities688,792646,2246.6%Total non-current liabilities2,354,2773,433,320(31.4)%Net assets9,697,4299,164,2315.8%
MANAGEMENT DISCUSSION AND ANALYSIS
Explanation of items with fluctuation over 10% from 31 December 2025 to 30 June 2026Investment in associatesInvestments in associates increased from US$150.2 million to US$183.1 million, primarily due to profits generated byassociates.Equity instruments designated at fair value through other comprehensive incomeEquity instruments designated at fair value through other comprehensive income increased from US$478.8 million toUS$787.4 million, primarily due to increase in fair value of investee companies and a new investment.Trade and notes receivablesTrade and notes receivables increased from US$282.1 million to US$322.5 million, primarily due to increased revenue.Other current assetsOther current assets increased from US$787.0 million to US$936.2 million, primarily due to increased value-added taxcredit.Time and pledged depositsTime and pledged deposits decreased from US$99.5 million to US$45.4 million, primarily due to the maturity of timedeposits.Trade payablesTrade payables decreased from US$330.4 million to US$289.8 million, mainly due to decreased payables to suppliers.Government grantsGovernment grants increased from US$89.0 million to US$115.7 million, primarily due to subsidies received forgovernment projects.Other current liabilitiesOther current liabilities decreased from US$1,033.1 million to US$866.5 million, primarily due to decreased payablesfor capital expenditures, partially offset by increased contract liabilities from customers.Interest-bearing bank borrowingsTotal interest-bearing bank borrowings increased from US$3,190.8 million to US$3,567.5 million, primarily due toincrease in drawdowns of bank borrowings.
INTERIM REPORT 2026
MANAGEMENT DISCUSSION AND ANALYSIS
Cash Flow
1H 20261H 2025ChangeUS$’000US$’
UnauditedUnauditedNet cash flows generated from operating activities468,481219,816113.1%Net cash flows used in investing activities(1,188,153)(879,847)35.0%Net cash flows generated from financing activities232,70333,952585.4%Net decrease in cash and cash equivalents(486,969)(626,079)(22.2)%Cash and cash equivalents at beginning of the period4,893,8084,459,1329.7%Effect of foreign exchange rate changes, net125,38513,847805.5%Cash and cash equivalents at end of the period4,532,2243,846,90017.8%Net cash flows generated from operating activitiesNet cash flows generated from operating activities increased from US$219.8 million to US$468.5 million, primarilydriven by increased receipts from customers.Net cash flows used in investing activitiesNet cash flows used in investing activities were US$1,188.2 million, primarily including US$1,281.4 million for capitalexpenditure and US$16.0 million for equity instrument investment, partially offset by (i) US$57.8 million of maturity oftime deposits, (ii) US$25.4 million of receipts of government grants, (iii) US$18.7 million of interest income, (iv) US$7.3million of dividends received from an associate, and (v) US$0.2 million of proceeds from disposal of equipment.Net cash flows generated from financing activitiesNet cash flows generated from financing activities were US$232.7 million, including (i) US$850.9 million of drawdownsof bank borrowings and (ii) US$3.4 million of proceeds from the exercise of share options, partially offset by (i)US$569.8 million of repayments of bank borrowings, (ii) US$49.7 million of interest payments, and (iii) US$2.1 millionpayment of principal portion of lease payments.
Financial ResourcesThe Group adopts a prudent approach to cash and financial management to ensure proper risk control and low costof funds. The Group finances its operations primarily with internally generated cash flow and bank loans. As at 30June 2026, the Group had cash and bank balances of approximately US$4,532.2 million (of which approximatelyUS$3,898.3 million were denominated in RMB and approximately US$585.9 million in US dollars), representing adecrease of US$361.6 million as compared to US$4,893.8 million at the end of 2025.
LiquidityTo meet liquidity requirements in the short and long term, our policy is to monitor regularly the current and expectedliquidity requirements to ensure that we maintain sufficient reserves of cash and adequate committed lines of fundingfrom major financial institutions.
MANAGEMENT DISCUSSION AND ANALYSIS
Capital ManagementOur primary objectives of capital management are to safeguard our ability to continue as a going concern and tomaintain healthy capital ratios to support our business and maximize shareholders’value. We manage our capitalstructure and make adjustments in light of the changes in economic conditions. To do this, we may adjust the dividendpayment to shareholders, return capital to shareholders, or issue new shares. We are not subject to any externallyimposed capital requirements. No changes were made in the objectives, policies, or processes for managing capitalduring the six months ended 30 June 2026.Bank LoansThe particulars of bank loans of the Group as at 30 June 2026 are set out as below:
30 June 202631 December 2025
US$’000US$’
CurrentShort term bank loans – unsecured146,901–Current portion of long term bank loans – secured554,566370,445Current portion of long term bank loans – unsecured1,200,59633,303
1,902,063403,748Non-currentSecured bank loans1,302,5361,576,623Unsecured bank loans362,9491,210,473
1,665,4852,787,096
3,567,5483,190,844
The Group is dedicated to improving financing practices. As at 30 June 2026, the Group had outstanding bankborrowings of US$3,567.5 million, compared to US$3,190.8 million as at the end of 2025. The bank borrowingsincluded secured interest-bearing borrowings of US$1,857.1 million and unsecured interest-bearing borrowings ofUS$1,710.4 million. Except for bank loans of US$576.3 million denominated in US$, all borrowings are dominated inRMB.
INTERIM REPORT 2026
MANAGEMENT DISCUSSION AND ANALYSIS
Charges on Group AssetsAs at 30 June 2026 and 31 December 2025, certain of the Group’s bank loans were secured by pledges of theGroup’s assets with carrying values as follows:
30 June 202631 December 2025US$’000US$’
Property, plant and equipment1,980,9642,475,944Investment property50,25452,176Right-of-use assets29,63034,052Completed properties held for sale211,603215,511
2,272,4512,777,683Exposure to Fluctuations in Exchange RatesWe have transactional currency exposures arising primarily from sales or purchases by our significant subsidiariesoperating in Chinese mainland in US$ rather than the subsidiary’s functional currency, which is RMB. During the sixmonths ended 30 June 2026, approximately 21% of our sales were denominated in currencies other than the functionalcurrency of the subsidiary making the sale, whilst 59% of costs of sales were denominated in the subsidiary’sfunctional currency.In addition, we have foreign currency exposures from interest-bearing bank borrowings held by our subsidiaryoperating in Chinese mainland. As at 30 June 2026, interest-bearing bank borrowings with a carrying amount ofUS$577 million were denominated in US$ instead of the subsidiary’s functional currency, which is RMB.As at 30 June 2026, if the US dollar had strengthened or weakened against the RMB by 5%, with all other variablesheld constant, our profit before tax for the period would have been approximately US$29 million lower or higher.For the six months ended 30 June 2026, the Group had not entered into any arrangement to hedge the aforementionedforeign currency risks. Nevertheless, the Company’s management will continue to monitor the foreign exchangeexposure position and will consider appropriate measures should the need arise.
MANAGEMENT DISCUSSION AND ANALYSIS
Contingent LiabilitiesAs at 30 June 2026, the Group did not have any contingent liabilities.RMB Share Issue
On 7 August 2023, the Company was listed on the STAR Market of the Shanghai Stock Exchange, pursuant to which atotal of 407,750,000 ordinary shares of the Company were issued.The total proceeds raised in the RMB Share Issue amounted to RMB21,203 million. After deducting the issuanceexpenses, including underwriting, sponsorship fees, as well as other issuance expenses, the net proceeds amountedto RMB20,921 million. Upon receipt of the proceeds, the entire amount has been deposited into a dedicated accountfor the proceeds, which was approved by the Board. The proceeds raised have been utilized in accordance with thepreviously disclosed intended use of the proceeds, as set out below:
Unit: RMB’
Previously disclosed intended use of proceeds
Amount ofcommittedinvestments
Accumulatedunutilized proceedsas at 30 June 2026
Expected timeframe
for usage ofunutilized proceedsHua Hong Manufacturing (Wuxi) Project12,500,0007,264By the end of 20268-Inch Factory Optimization and Upgrading Project2,000,000134,085By the end of 2026Specialty Technological Innovation, Research and Development Project
2,500,000132,277By the end of 2026Replenishment of Working Capital1,000,0000N/AApart from the above, the surplus proceeds of RMB2,921 million, raised from the RMB Share Issue, will also be usedfor the Group’s business operations upon obtaining the necessary approvals, in accordance with relevant regulations.During the six months ended 30 June 2026, the proceeds from the RMB Share Issue were used and were proposedto be used, according to the intentions previously disclosed by the Company in the prospectus, and there was nomaterial change or delay in the use of proceeds.
INTERIM REPORT 2026
MANAGEMENT DISCUSSION AND ANALYSIS
Proposed Acquisition and Proposed Non-public Issuance of RMB Shares
As disclosed in the Company’s announcements dated 31 August 2025 and 31 December 2025 and the Company’scircular dated 22 January 2026, the Company proposes to acquire 97.4988% equity interest in Huali Micro by wayof issuance of consideration RMB Shares. The appraised value of 100% equity interest of Huali Micro is RMB8,480million, and the total consideration for its 97.4988% equity interest is approximately RMB8,268 million. According to therelevant laws and regulations of the PRC, the issue price of the consideration shares for this acquisition is RMB43.34per consideration share, and the number of issued shares is 190,768,392. Upon the completion of this acquisition, theGroup will hold 100% of Huali Micro.Taking into account the future capital requirements of the Company, in addition to acquisition, the Board furtherapproved and proposed proceeds raised of RMB7,556.29 million, being (i) not more than 100% of the final totalconsideration of the proposed acquisition, and (ii) the number of RMB shares to be issued shall not exceed 30% ofthe total issued share capital of the Company upon completion of the proposed acquisition. The proceeds raised willbe used for the upgrading, R&D and industrialization of the production line of the Huali Micro, and to supplementthe Company’s working capital. The issue period, price determination date and specific issue time of the proposednon-public offering of RMB Shares will be determined by the Company and the PRC independent financial advisorafter due consideration of the market conditions and the intended use of proceeds.The Proposed Acquisition, Proposed Non-public Issuance of RMB Shares and the transaction contemplatedthereunder were, amongst others, approved by the independent shareholders at the EGM held on 10 February 2026.As of the date of this report, all conditions precedent to the Company’s proposed acquisition have been satisfied.
Business ReviewIn the first half of 2026, the global economic growth remained structurally uneven, with full-year growth rate projectedat approximately 3.0%, constrained primarily by geopolitical tensions, oil price volatility, and monetary policydivergences. After a post-destocking recovery, the global semiconductor industry entered a structural upcycle drivenby AI infrastructure. Demand expanded from memory and advanced logic to server-related and mature-node products,including power management ICs, microcontrollers, and power discrete devices. The spillover effect supported acomprehensive recovery in mature-node and specialty process products, higher foundry utilization, as well as arebound in wafer prices.In the first half of 2026, the Company recorded revenue of US$1.378 billion, achieving a year-on-year increase of
24.5%, with shipments growing by 17.9% to a record high. Growth was driven by strong end-market demand, the
ramp-up of its 12-inch capacity, improved manufacturing flexibility, continuous technological iteration and productmix optimization. The company achieved growth in both volume and price and, as of the second quarter of 2026,has delivered sequential revenue growth for 10 consecutive quarters. Demand remained strong across powermanagement, embedded non-volatile memory, standalone non-volatile memory, and low- and medium-voltage powerdiscrete device platforms, exceeding available capacity. Notably, sales of power management platform increasedby nearly 40% year on year, embedded non-volatile memory grew by over 40%, and standalone non-volatile memorygrew by nearly 80%.
MANAGEMENT DISCUSSION AND ANALYSIS
The Company continued to advance technological R&D and innovation. Its 40nm eFlash platform entered riskproduction, while its automotive-grade 55nm eFlash platform entered product adoption. The next-generation small-pitch IGBT platform, high-voltage Super-junction and Super IGBT processes entered mass production. In collaborationwith a leading overseas customer, the 40nm MCU entered mass production, breaking into global high-end MCUmarkets. The 40nm ultra-low-power specialty process also entered mass production. Power management productscontinued to gain shares in automotive electronics, with multiple generations of process platforms entering large-scale production, further enhancing its technological competitiveness. Meanwhile, the company actively expandedits business with leading domestic and international customers, and strengthened its presence in high-end consumerelectronics, automotive electronics, and new energy through industry ecosystem collaboration.In terms of production capacity expansion, all equipment required for the planned monthly capacity of 83k wafersat Wuxi Phase II project (Fab 9) has been fully moved in by the end of June 2026. Installation and qualification areproceeding intensively, with planned capacity expected to be reached by the end of the third quarter. The companyis also progressing its proposed acquisition of 97.5% equity interest in Huali Micro. The transaction passed regulatoryreview in mid-June and is expected to be closed in the third quarter. The integration of Huali Micro will expand the 12-inch capacity and complement its existing platforms, enabling broader application coverage, more comprehensivetechnical solutions and enriched product offerings.Looking ahead to the second half of 2026, the global semiconductor industry is expected to maintain its strongstructural momentum. Meanwhile, the company will continue to expand capacity, accelerate process innovation,expand its domestic and international businesses, and continue its cost-down and efficiency-enhancement initiatives.Through these efforts, the Company will seek to drive earnings growth, enhance its resilience to market volatility,and strive to provide global customers with more comprehensive, high-quality specialty process wafer foundrytechnologies and services.Significant InvestmentThe Company did not hold any significant investment (with a value of 5% or more of the Group’s total assets) as of 30June 2026.Future Plans for Material Investments and Capital AssetsSave as disclosed in this interim report, the Group did not have other concrete plans for material investments or capitalassets as of 30 June 2026. Any relevant information shall be based on the announcements to be released by theCompany in the designated information disclosure media in due course.Interim DividendAfter due consideration by the Board of factors including the current industry landscape of the sector in which theCompany operates, the Company’s own development stage, and its capital expenditure plans, the Board does notrecommend the payment of an interim dividend for the six months ended 30 June 2026 (2025: Nil).
2026
C3
51%
A
51%
www.huahonggrace.com
1088
2026
A
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2012033030-130-221402801347688347
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%
百萬美元美元
母公司擁有人應佔溢利每股盈利
0.00
15.0%
1,2001,000
1,4001,600
1,107.0
1,378.5
14.8%
10.0%
5.0%
0.0%
8.5%
10.1%
11.7
59.6
0.034
0.04
0.02
0.007
0.022
938.5
二零二五年上半年二零二四年上半年二零二六年上半年
百萬美元
38.5
二零二五年上半年二零二四年上半年二零二六年上半年
| 二零二五年上半年二零二四年上半年二零二六年上半年二零二五年上半年二零二四年上半年二零二六年上半年 |
20.0%
2026
1,378,4621,107,00224.5%(1,173,999)(995,394)17.9%
204,463111,60883.2%47,21259,916(21.2)%(5,319)(4,844)9.8%(206,951)(189,051)9.5%(2,426)(1,132)114.3%
(11)(17,300)(99.9)%(57,104)(41,551)37.4%
9,6441,243675.9%(10,492)(81,111)(87.1)%
(2,897)(3,852)(24.8)%(13,389)(84,963)(84.2)% 59,56811,702409.0% (72,957)(96,665)(24.5)%
13.78524.5%
11.74017.9%
2.04583.2%
4,72021.2%
2.0709.5%
240114.3%
199.9%5,71037.4%
960675.9%29024.8%
1,34084.2%
2026
7,286,2666,676,4429.1%226,803219,7723.2%183,072150,22221.9%787,420478,79964.5%321,199321,840(0.2)%8,804,7607,847,07512.2%
584,782544,3687.4%322,463282,05314.3%936,223786,97419.0%45,35599,494(54.4)%4,532,2244,893,808(7.4)%6,421,0476,606,697(2.8)%289,753330,370(12.3)%1,902,063403,748371.1%115,74089,04930.0%866,5451,033,054(16.1)%3,174,1011,856,22171.0%3,246,9464,750,476(31.7)%1,665,4852,787,096(40.2)%688,792646,2246.6%2,354,2773,433,320(31.4)%9,697,4299,164,2315.8%
10%
1.5021.831
4.7887.874
2.8213.225
7.8709.362
9,9504,540
3.3042.898
8,9001.157
10.3318.665
31.90835.675
2026
468,481219,816113.1%(1,188,153)(879,847)35.0%232,70333,952585.4%(486,969)(626,079)(22.2)%4,893,8084,459,1329.7%
125,38513,847805.5%4,532,2243,846,90017.8%
2.1984.685
11.88212.8141,600(i)5,780(ii)2,540(iii)1,870(iv)730(v)20
2.327(i)8.509340(i)
5.698(ii)4,970(iii)210
45.32238.983
5.85948.9383.616
146,901–554,566370,4451,200,59633,3031,902,063403,7481,302,5361,576,623362,9491,210,4731,665,4852,787,0963,567,5483,190,844
35.675
31.90818.57117.1045.767
2026
1,980,9642,475,94450,25452,17629,63034,052211,603215,5112,272,4512,777,683
21%59%
5.77
5%2,900
407,750,000
212.03
209.21
12,500,0007,26482,000,000134,085
2,500,000132,2771,000,0000
29.21
2026
97.4988%100%
8,48097.4988%8,268
43.34190,768,392100%
75.5629(i)
100%(ii)30%
20263.0%
AI
202613.7824.5%17.9%
20261040%40%80%
40nm eFlash55nm eFlashPitch IGBTSuper IGBT40nm MCU
MCU40nm20266(Fab 9) 83K
97.5%6
2026
5%
2026INTERIM REPORT2026
REPORT ON REVIEW OF INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
2962
2410
To the board of directors of Hua Hong Grace SemiconductorLimited
(Incorporated in Hong Kong with limited liability)
IntroductionWe have reviewed the interim financial information set out on pages29 to 62 which comprises the condensed consolidated statementof financial position of Hua Hong Grace Semiconductor Limited(the“Company”, formerly known as Hua Hong SemiconductorLimited) and its subsidiaries (the“Group”) as at 30 June 2026 andthe related condensed consolidated statements of profit or loss,comprehensive income, changes in equity and cash flows for thesix-month period then ended, and explanatory notes. The RulesGoverning the Listing of Securities on The Stock Exchange of HongKong Limited require the preparation of a report on interim financialinformation to be in compliance with the relevant provisionsthereof and Hong Kong Accounting Standard 34Interim FinancialReporting (“HKAS 34”) as issued by the Hong Kong Institute ofCertified Public Accountants (“HKICPA”). The directors of theCompany are responsible for the preparation and presentation ofthis interim financial information in accordance with HKAS 34. Ourresponsibility is to express a conclusion on this interim financialinformation based on our review. Our report is made solely to you,as a body, in accordance with our agreed terms of engagement,and for no other purpose. We do not assume responsibility towardsor accept liability to any other person for the contents of this report.
Scope of ReviewWe conducted our review in accordance with Hong Kong Standardon Review Engagements 2410Review of Interim FinancialInformation Performed by the Independent Auditor of the Entity
as issued by the HKICPA. A review of interim financial informationconsists of making inquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and otherreview procedures. A review is substantially less in scope thanan audit conducted in accordance with Hong Kong Standards onAuditing and consequently does not enable us to obtain assurancethat we would become aware of all significant matters that mightbe identified in an audit. Accordingly, we do not express an auditopinion.
ConclusionBased on our review, nothing has come to our attention that causesus to believe that the interim financial information is not prepared, inall material respects, in accordance with HKAS 34.
Certified Public Accountants
Hong Kong26 August 2026
INTERIM CONDENSED CONSOLIDATED STATEMENT OFPROFIT OR LOSS
FOR THE SIX MONTHS ENDED 30 JUNE 2026
HUA HONG GRACE SEMICONDUCTOR LIMITED
For the six months ended
30 June20262025(Unaudited)(Unaudited)NotesUS$’000US$’
Revenue
1,378,4621,107,002Cost of sales(1,173,999)(995,394)
Gross profit204,463111,608Other income and gains
47,21259,916Selling and distribution expenses(5,319)(4,844)Administrative expenses(206,951)(189,051)Impairment losses on trade receivables and notes receivables (2,426)(1,132)Other expenses(11)(17,300)Finance costs(57,104)(41,551)Share of profits of associates9,6441,243
LOSS BEFORE TAX
(10,492)(81,111)Income tax expense
(2,897)(3,852)
LOSS FOR THE PERIOD(13,389)(84,963)
Attributable to:
Owners of the parent 59,56811,702 Non-controlling interests (72,957)(96,665)
(13,389)(84,963)
EARNINGS PER SHAREATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT:
Basic – For profit for the period US$0.034US$0.007
0.0340.007
Diluted – For profit for the period US$0.034US$0.007
0.0340.007
2026INTERIM REPORT2026
INTERIM CONDENSED CONSOLIDATEDSTATEMENT OF COMPREHENSIVE INCOMEFOR THE SIX MONTHS ENDED 30 JUNE 2026
For the six months ended
30 June20262025(Unaudited)(Unaudited)US$’000US$’
LOSS FOR THE PERIOD(13,389)(84,963)
OTHER COMPREHENSIVE INCOME
Other comprehensive income that may bereclassified to profit or loss in subsequent periods:
Exchange differences on translation of foreign operations277,74535,116
Net other comprehensive income that may bereclassified to profit or loss in subsequent periods
277,74535,116
Other comprehensive income that will not bereclassified to profit or loss in subsequent periods:
Equity investments designated at fair valuethrough other comprehensive income:
Changes in fair value285,819–Income tax effect(42,873)–
242,946–
Share of other comprehensive income of an associate 25,639–
Net other comprehensive income that will not bereclassified to profit or loss in subsequent periods
268,585–
OTHER COMPREHENSIVE INCOME FOR THE PERIOD, NET OF TAX546,33035,116
TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD532,941(49,847)
Attributable to:
Owners of the parent 525,11636,005 Non-controlling interests 7,825(85,852)
532,941(49,847)
INTERIM CONDENSED CONSOLIDATED STATEMENT OFFINANCIAL POSITION
30 JUNE 2026
HUA HONG GRACE SEMICONDUCTOR LIMITED
30 June2026
31 December
2025(Unaudited)(Audited)NotesUS$’000US$’
NON-CURRENT ASSETS
Property, plant and equipment
7,286,2666,676,442Right-of-use assets57,26264,482Investment properties226,803219,772Intangible assets30,48335,509Investment in associates183,072150,222Equity investments designated at fair value through other comprehensive income 787,420478,799Financial asset at fair value through profit or loss 8,809–Long-term prepayments224,645221,849
Total non-current assets8,804,7607,847,075
CURRENT ASSETS
Completed properties held for sale222,405215,511Inventories584,782544,368Trade and notes receivables
322,463282,053Prepayments, other receivables and other assets 701,266561,328Due from related parties
12,55210,135Time and pledged deposits45,35599,494Cash and cash equivalents4,532,2244,893,808
Total current assets6,421,0476,606,697
CURRENT LIABILITIES
Trade payables
289,753330,370Other payables and accruals829,7461,008,586Interest-bearing bank borrowings1,902,063403,748Current portion of long-term payables7,331–Lease liabilities2,0063,229Government grants115,74089,049Due to related parties
12,9136,225Income tax payable14,54915,014
Total current liabilities3,174,1011,856,221
NET CURRENT ASSETS3,246,9464,750,476
TOTAL ASSETS LESS CURRENT LIABILITIES12,051,70612,597,551
continued/
2026INTERIM REPORT2026
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION30 JUNE 2026
30 June2026
31 December
2025
(Unaudited)(Audited)NotesUS$’000US$’
NON-CURRENT LIABILITIESInterest-bearing bank borrowings1,665,4852,787,096Lease liabilities7,93815,679Deferred tax liabilities67,25135,964Long-term payables613,603594,581
Total non-current liabilities2,354,2773,433,320
Net assets9,697,4299,164,231
EQUITYEquity attributable to owners of the parentShare capital
4,987,8274,987,482Reserves2,150,2091,625,181
Total equity attributable to owners of the parent7,138,0366,612,663Non-controlling interests2,559,3932,551,568
Total equity9,697,4299,164,231
Peng BaiJun Ye
DirectorDirector
INTERIM CONDENSED CONSOLIDATED STATEMENT OFCHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2026
HUA HONG GRACE SEMICONDUCTOR LIMITED
Attributable to owners of the parent
Share capitalMerger reserve
Share option
reserveOther capitalreserve andcontributed
surplus
Share of othercomprehensive
income ofassociates
Fair valuereserve ofnancial assetsat fair valuethrough othercomprehensiveincome
Revaluation
surplus
#
Statutoryreserve funds
Exchangeuctuation
reserve
RetainedprotsTotal
Non-controlling
interestsTotal equity
#US$’000US$’000US$’000US$’000US$’000US$’000US$’000US$’000US$’000US$’000US$’000US$’000US$’
(note 11)
At 1 January 20264,987,482645,494*145*35,685*689*203,853*99,257*277,541*(11,942)*374,459*6,612,6632,551,5689,164,231Profit/(loss) for the period–––––––––59,56859,568(72,957)(13,389)Other comprehensive income for the period:
Exchange differenceson translation of foreign operations
––––––––196,963–196,96380,782277,745
Change in fair value ofequity investments at fair value through other comprehensive income, net of tax
–––––242,946––––242,946–242,946Share of othercomprehensive incomeof an associate
––––25,639–––––25,639–25,639
Total comprehensive income for the period––––25,639242,946––196,96359,568525,1167,825532,941Issue of shares for exercise of share options (note 11) 11345–(88)–––––––257–257Transfer from retained profits generated by a subsidiary –––––––11,390–(11,390 )–––
At 30 June 2026 (unaudited)
4,987,827645,494*57*35,685*26,328*446,799*99,257*288,931*185,021*422,637*7,138,0362,559,3939,697,429
At 1 January 20254,938,457645,49411,59135,68568964,63599,257256,366(145,901)340,7536,247,0262,659,5938,906,619Profit/(loss) for the period–––––––––11,70211,702(96,665)(84,963)Other comprehensive income for the period:
–––––––––––––Exchange differences ontranslation of foreignoperations
––––––––24,303–24,30310,81335,116
Total comprehensiveincome/(loss) for the period––––––––24,30311,70236,005(85,852)(49,847)
Issue of shares for exercise of share options (note 11) 1122,398–(5,527)–––––––16,871–16,871
Transfer from retainedprofits generated by a subsidiary
–––––––9,945–(9,945)–––At 30 June 2025 (unaudited)
4,960,855645,4946,06435,68568964,63599,257266,311(121,598)342,5106,299,9022,573,7418,873,643* These reserve accounts comprise the consolidated reserves of
US$2,150,209,000 (31 December 2025: US$1,625,181,000) in theinterim condensed consolidated statement of financial position.
*
2,150,209,000
1,625,181,000
2026INTERIM REPORT2026
INTERIM CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2026
For the six months ended
30 June20262025(Unaudited)(Unaudited)US$’000US$’
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax(10,492)(81,111)Adjustments for:
Finance costs 57,10441,551 Share of profits of associates (9,644)(1,243) Interest income (21,994)(30,913)Loss on disposal of items of property, plant and equipment
4612 Gain on lease modifications (924)– Depreciation of property, plant and equipment 438,862344,036 Amortisation of intangible assets 6,5164,794 Depreciation of right-of-use assets 2,6962,953Impairment of trade receivables and notes receivables
2,4261,132Impairment of items of property, plant and equipment
67–
464,663281,211
Increase in inventories(40,414)(46,374)Decrease in completed properties held for sale–244(Increase)/decrease in trade and notes receivables
(42,924)4,987Increase in prepayments, other receivables and other assets (9,766)(3,184)(Increase)/decrease in amounts due from related parties (2,417)3,964Increase in pledged deposits(3,655)(132)Decrease in trade payables(40,617)(35,020)Increase in other payables and accruals
152,98141,675Increase in government grants–56Increase/(decrease) in amounts due to related parties
6,688(565)
Cash generated from operations484,539246,862
Income tax paid(16,058)(27,046)
Net cash ows generated from operating activities468,481219,816
continued/
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2026
For the six months ended
30 June20262025(Unaudited)(Unaudited)US$’000US$’
CASH FLOWS FROM INVESTING ACTIVITIESInterest received18,65835,917Purchases of items of property, plant and equipment and intangible assets(1,281,437)(918,579)Acquisition of interests in an associate–(2,794)Dividend received from an associate7,286–Purchase of an equity investment designated at fair value through other comprehensive income(7,286)–Purchase of a financial assets at fair value through profit or loss(8,809)–Receipt of government grants for property, plant and equipment25,3945,590Proceeds from disposal of items of property, plant and equipment24719Withdrawal of time deposits57,794–
Net cash ows used in investing activities(1,188,153)(879,847)
CASH FLOWS FROM FINANCING ACTIVITIES
New bank loans850,870999,081Proceeds from issue of shares for exercise of share options 3,44915,295Repayment of bank loans(569,813)(936,833)Interest paid(49,742)(41,875)Principal portion of lease payments(2,061)(1,716)
Net cash ows generated from nancing activities232,70333,952
NET DECREASE IN CASH AND CASH EQUIVALENTS(486,969)(626,079)Cash and cash equivalents at beginning of period4,893,8084,459,132Effect of foreign exchange rate changes, net125,38513,847
CASH AND CASH EQUIVALENTS AT END OF PERIOD4,532,2243,846,900
2026INTERIM REPORT2026
NOTES TO THE INTERIM CONDENSEDCONSOLIDATED FINANCIAL INFORMATION
30 June 2026
1. CORPORATE INFORMATION
Hua Hong Grace Semiconductor Limited (the“Company”,formerly known as Hua Hong Semiconductor Limited) is alimited liability company incorporated in Hong Kong on 21January 2005. The registered office of the Company is locatedat Room 2212, Bank of America Tower, 12 Harcourt Road,Central, Hong Kong. The principal place of business is locatedat No. 288, Halei Road, Pudong New Area, Shanghai.The principal activity of the Company is investment holding.During the six months ended 30 June 2026, the Company’ssubsidiaries (collectively refer to as the“Group”) wereprincipally engaged in the manufacture and trading ofsemiconductor products.In the opinion of the directors, the parent of the Company isShanghai Huahong (Group) Co., Ltd. (“Huahong Group”),which is a state-owned company established in the People’sRepublic of China (“PRC”) and supervised by the ShanghaiState-owned Assets Supervision and AdministrationCommission (“Shanghai SASAC”). The ultimate parent of theCompany is Shanghai SASAC.
1.
122212
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION
30 June 2026
1. CORPORATE INFORMATION (CONTINUED)
Information about subsidiariesParticulars of the Company’s subsidiaries are as follows:
Name
Place of incorporation/registration and business
Issued ordinary/registeredshare capital (’000)
Percentage of equityattributable to the CompanyPrincipal activitiesDirectIndirectGrace Semiconductor Manufacturing Corporation
(“Grace Cayman”)
Cayman IslandsUS$0.001100%–Investment holdingGrace Semiconductor Manufacturing CorporationGrace Cayman
0.001100%–Shanghai Huahong Grace SemiconductorManufacturing Corporation (“HHGrace Shanghai”)*
PRC/Chinese mainlandRMB20,460,928100%–Manufacture and sale of
semiconductor products*20,460,928100%–Hua Hong Semiconductor (Wuxi) Limited** Hua HongWuxi
PRC/Chinese mainlandUS$2,536,85222.2%28.8%Manufacture and sale of
semiconductor products**2,536,85222.2%28.8%Huahong Real Estate (Wuxi) Co., Ltd. (“Huahong RealEstate Wuxi”)***
PRC/Chinese mainlandRMB30,000–51%Real estate development***30,000–51%
1.
2026INTERIM REPORT2026
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION30 June 2026
******
Name
Place of incorporation/registration and business
Issued ordinary/registered
share capital (’000)
Percentage of equityattributable to the CompanyPrincipal activities
DirectIndirectHuahong Semiconductor Manufacturing (Wuxi) Co.,Ltd** Wuxi Phase II
PRC/Chinese mainlandUS$4,020,00021.9%29.1%Manufacture and sale of
semiconductor products**4,020,00021.9%29.1%Wuxi Hua Hong Grace (Phase III) SemiconductorLimited (“Wuxi Phase III”, formerly known as HuaHong Grace Semiconductor (Wuxi) Limited.)***
PRC/Chinese mainlandRMB6,680–100%Manufacture and sale of
semiconductor products***
6,680–100%Global Synergy Technology Limited (“GST”)PRC/Hong KongHK$10100%–Trading
10100%–HHGrace Semiconductor USA, Inc.USA–100%–Sales officeHHGrace Semiconductor USA, Inc.–100%–* HHGrace Shanghai is registered as a wholly-foreign-owned
company under PRC law.** Hua Hong Wuxi and Wuxi Phase II are registered as Sino-foreign
joint companies under PRC law.*** Huahong Real Estate Wuxi and Wuxi Phase III registered as a
domestic company under PRC law.
1. CORPORATE INFORMATION (CONTINUED)
Information about subsidiaries (Continued)
1.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION
30 June 2026
2.1 BASIS OF PREPARATION
The interim condensed consolidated financial information forthe six months ended 30 June 2026 has been prepared inaccordance with HKAS 34Interim Financial Reporting. Theinterim condensed consolidated financial information doesnot include all the information and disclosures required in theannual financial statements, and should be read in conjunctionwith the Group’s annual consolidated financial statements forthe year ended 31 December 2025.The financial information relating to the year ended 31December 2025 that is included in the interim condensedconsolidated statement of financial position as comparativeinformation does not constitute the Company’s statutory annualconsolidated financial statements for that year but is derivedfrom those financial statements. Further information relating tothose statutory financial statements required to be disclosedin accordance with section 436 of the Hong Kong CompaniesOrdinance is as follows:
The Company has delivered the financial statements for theyear ended 31 December 2025 to the Registrar of Companiesas required by section 662(3) of, and Part 3 of Schedule 6 to,the Hong Kong Companies Ordinance. The Company’s auditorhas reported on the financial statements for the year ended 31December 2025. The auditor’s report was unqualified; did notinclude a reference to any matters to which the auditor drewattention by way of emphasis without qualifying its report; anddid not contain a statement under sections 406(2), 407(2) or407(3) of the Hong Kong Companies Ordinance.
2.1
662(3)
406(2)407(2)407(3)
2026INTERIM REPORT2026
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2026
2.2 CHANGES IN ACCOUNTING POLICIES AND
DISCLOSURESThe accounting policies adopted in the preparation of theinterim condensed consolidated financial information areconsistent with those applied in the preparation of the Group’sannual consolidated financial statements for the year ended31 December 2025, except for the adoption of the followingamended HKFRS Accounting Standard for the first time for thecurrent period’s financial information.Amendments to HKFRS 9 andHKFRS 7
Amendments to theClassification andMeasurement of FinancialInstrumentsAmendments to HKFRS 9 andHKFRS 7
Contracts ReferencingNature-dependentElectricityAnnual Improvementsto HKFRS AccountingStandards – Volume 11
Amendments to HKFRS 1,HKFRS 7, HKFRS 9, HKFRS10 and HKAS 7The adoption of above revised standards has no significantfinancial effect to the Group’s interim condensed consolidatedfinancial information.
2.2
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION
30 June 2026
3. OPERATING SEGMENT INFORMATION
For management purposes, the Group is organised into onesingle business unit that includes primarily the manufactureand sale of semiconductor products. Management reviews theconsolidated results when making decisions about allocatingresources and assessing the performance of the Group.Accordingly, no segment analysis is presented.The principal assets employed by the Group are located inthe PRC. Therefore, no segment information based on thegeographical location of assets is presented for the period.Revenues regarding geographical segments based on thelocation of customers for the period are presented as follows:
For the six months ended
30 June20262025US$’000US$’
(Unaudited)(Unaudited)
China (including Hong Kong)1,088,913912,132North America179,543109,434Asia (excluding China)60,19455,471Europe49,81229,965
Total1,378,4621,107,002
3.
2026INTERIM REPORT2026
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION30 June 2026
4. 4. REVENUE AND OTHER INCOME AND GAINS
An analysis of revenue and other income and gains is asfollows:
For the six months ended
30 June20262025US$’000US$’
(Unaudited)(Unaudited)
Revenue from contracts with customersSale of goods1,378,4621,107,002
Type of goodsSales of semiconductor products and total
revenue from contracts with customers 1,378,4621,107,002
Timing of revenue recognitionGoods transferred at a point in time and total
revenue from contracts with customers 1,378,4621,107,002
Other income and gainsRental income from investment propertyoperating leases:
– Fixed lease payments7,1566,973Interest income21,99430,913Government subsidies10,31621,096Foreign exchange gain, net5,609–Gain on lease modifications924–Others1,213934
47,21259,916
The disaggregation of the Group’s revenue based on thegeographical region for the six months ended 30 June 2026 isincluded in note 3.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION
30 June 2026
5. 5. LOSS BEFORE TAX
The Group’s loss before tax is arrived at after charging/(crediting):
For the six months ended
30 June20262025US$’000US$’
(Unaudited)(Unaudited)
Cost of inventories sold1,173,999995,394Write-down of inventories to net realisable value2,5455,098Impairment losses on trade receivables and notes receivables 2,4261,132Impairment of property, plant and equipment67–Loss on disposal of items of property, plant and equipment 4612Gain on lease modifications(924)–Exchange differences, net(5,609)17,263
2026INTERIM REPORT2026
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION30 June 2026
6.
16.5%
16.5%
25%?
15%15%?
50%
6. INCOME TAX
Profits arising in Hong Kong were subject to profits tax atthe rate of 16.5% during the six months ended 30 June 2026(six months ended 30 June 2025: 16.5%). No provision forHong Kong profits tax has been made as the Company anda subsidiary incorporated in Hong Kong had no assessableincome during the six months ended 30 June 2026 (six monthsended 30 June 2025: nil).The Company’s subsidiary incorporated in the Cayman Islandsis not subject to corporate income tax (“CIT”) as it does nothave a place of business (other than a registered office) orcarry on any business in the Cayman Islands.All of the Group’s subsidiaries registered in the PRC and haveoperations in Chinese mainland are subject to PRC enterpriseincome tax on the taxable income as reported in their PRCstatutory accounts adjusted in accordance with relevant PRCincome tax laws based on a statutory rate of 25% except forthe ones which are subject preferential tax below:
? Pursuant to the relevant laws and regulations in the PRCand with approval from the tax authorities in charge, theGroup’s subsidiaries, HHGrace Shanghai, is qualified as“High and New Technology Enterprises”and are thereforeentitled to a preferential tax rate of 15% from December2023 to December 2026. The renewal processes for thequalification of HHGrace Shanghai has been started andmanagement believe that a preferential tax rate of 15% isexpected to be effective in the foreseeable future;? Pursuant to the relevant laws and regulations in the PRCand with the approval from the tax authorities in charge,the Group’s subsidiaries, Hua Hong Wuxi and Wuxi PhaseII, are entitled to an exemption from CIT for five years,commencing from the first year that Hua Hong Wuxi andWuxi Phase II generate taxable profits, and a deductionof 50% on the CIT rate for the following five years. HuaHong Wuxi and Wuxi Phase II were in accumulated taxloss positions as at 30 June 2026 and the tax holiday hasnot yet begun.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION
30 June 2026
6.
21%21%
8.84%
8.84%
6. INCOME TAX (CONTINUED)
The Company’s subsidiary incorporated and operating in theUnited States was subject to federal corporation income tax ata rate of 21% during the six months ended 30 June 2026 (sixmonths ended 30 June 2025: 21%), as well as a California statetax at 8.84% (six months ended 30 June 2025: 8.84%).The major components of income tax expense of the Groupare as follows:
For the six months ended
30 June20262025US$’000US$’
(Unaudited)(Unaudited)
Current income tax expense – Chinese mainland15,27911,911Current income tax expense – elsewhere1021Deferred tax(12,392)(8,080)
Total income tax expense2,8973,852
7. EARNINGS PER SHARE ATTRIBUTABLE
TO ORDINARY EQUITY HOLDERS OF THEPARENTThe calculation of the basic earnings per share amounts isbased on the profit for the period attributable to ordinary equityholders of the parent and the weighted average number ofordinary shares of 1,737,646,356 outstanding during the sixmonths ended 30 June 2026 (six months ended 30 June 2025:
1,724,087,447).
7.
1,737,646,356
1,724,087,447
2026INTERIM REPORT2026
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION30 June 2026
7. 7. EARNINGS PER SHARE ATTRIBUTABLE
TO ORDINARY EQUITY HOLDERS OF THEPARENT (CONTINUED)The calculation of the diluted earnings per share amountis based on the profit for the period attributable to ordinaryequity holders of the parent. The weighted average numberof ordinary shares used in the calculation is the number ofordinary shares outstanding during the six months ended30 June 2026, as used in the basic earnings per sharecalculation, and the weighted average number of ordinaryshares assumed to have been issued at no consideration onthe deemed exercise or conversion of all dilutive potentialordinary shares into ordinary shares.The calculations of basic and diluted earnings per share arebased on:
For the six months ended
30 June20262025US$’000US$’
(Unaudited)(Unaudited)
EarningsProfit attributable to ordinary equity holders ofthe parent, used in the basic earnings per share calculation
59,56811,702
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION
30 June 2026
7. EARNINGS PER SHARE ATTRIBUTABLE
TO ORDINARY EQUITY HOLDERS OF THEPARENT (CONTINUED)
Number of shares
For the six months ended
30 June20262025
SharesWeighted average number of ordinary sharesoutstanding during the period used in the basic earnings per share calculation
1,737,646,3561,724,087,447Effect of dilution-weighted average number ofordinary shares:
Share options 56,4085,439,856
Total1,737,702,7641,729,527,303
8. PROPERTY, PLANT AND EQUIPMENT
During the six months ended 30 June 2026, the major changesin property, plant and equipment include:
? The Group acquired items of property, plant andequipment with a cost of US$833,563,000 (six monthsended 30 June 2025: US$611,216,000).? Depreciation for items of property, plant and equipmentwas US$441,066,000 during the six months ended30 June 2026 (six months ended 30 June 2025:
US$344,036,000). US$2,204,000 of depreciation wascapitalised during the six months ended 30 June 2026(six months ended 30 June 2025: nil) as certain items ofproperty, plant and equipment were used for constructionin progress.? The additions in exchange realignment for items of
property, plant and equipment was US$219,199,000during the six months ended 30 June 2026 (six monthsended 30 June 2025: US$24,973,000).
7.
8.
?
833,563,000611,216,000?
441,066,000344,036,0002,204,000?
219,199,00024,973,000
2026INTERIM REPORT2026
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION30 June 2026
9. TRADE AND NOTES RECEIVABLES
30 June
2026
31 December
2025
US$’000US$’
(Unaudited)(Audited)
Trade receivables268,484236,909Notes receivables58,94447,595
327,428284,504
Impairment(4,965)(2,451)
Total322,463282,053
An ageing analysis of the trade and notes receivables, basedon the due date and net of provisions, is as follows:
30 June2026
31 December
2025
US$’000US$’
(Unaudited)(Audited)
Not past due yet310,236273,204Less than 3 months past due39,5386,0453 to 6 months past due362,6892,804
Total322,463282,053
9.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION
30 June 2026
10. 10. TRADE PAYABLES
An ageing analysis of the trade payables of the Group as atthe end of the reporting period, based on the invoice date, isas follows:
30 June
2026
31 December
2025US$’000US$’
(Unaudited)(Audited)
Within 1 month1170,091172,247Over 1 but within 3 months1368,63277,156Over 3 but within 6 months3610,33511,171Over 6 but within 12 months61233,44111,116Over 12 months127,25458,680
Total289,753330,370
The trade payables are unsecured, non-interest-bearing andare normally settled on terms of 30 to 60 days.3060
2026INTERIM REPORT2026
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION
30 June 2026
11. SHARE CAPITAL
Number ofshares inissue
Amount ofshare capitalUS$’
1 January 20261,737,614,1934,987,482Issue of shares for exercise of share options112,209345
30 June 2026 (unaudited)
1,737,726,4024,987,827
1 January 20251,718,468,8154,938,457Issue of shares for exercise of share options8,610,78322,398
30 June 2025 (unaudited)
1,727,079,5984,960,855
12. COMMITMENTS
The Group had the following contractual commitments at theend of the reporting period:
30 June2026
31 December
2025
US$’000US$’
(Unaudited)(Audited)
Contracted, but not provided for:
Property, plant and equipment 3,248,3941,238,613
11.
12.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION
30 June 2026
13. RELATED PARTY TRANSACTIONS
(a) Name and relationship
Name of related partyRelationship with the Group
Shanghai Huahong Zealcore Electronics Co., Ltd. (“Huahong Zealcore”)
A subsidiary of Huahong GroupZealCore Electronics Shanghai Co., Ltd. (“Zealcore Shanghai”)
A subsidiary of Huahong GroupShanghai Hongri International Electronics Co., Ltd. (“Hongri”)
A subsidiary of Huahong GroupShanghai Hua Hong Jitong Smart System Co., Ltd. (“Jitong”)
A subsidiary of Huahong GroupShanghai Huali Microelectronics Co., Ltd. (“Huali Micro”)
A subsidiary of Huahong GroupCompany A*A subsidiary of Huahong GroupA*Company B*A subsidiary of Huahong Group
B*Huahong Technology Development Co., Ltd. (“Huahong Technology Development”)
A subsidiary of Huahong Group and an associate of the GroupShanghai Huahong Real Estate Co., Ltd. (“Huahong Real Estate”)
A subsidiary of Huahong Technology DevelopmentShanghai Huajin Property Management Co., Ltd. (“Huajin”)
A subsidiary of Huahong Technology Development
* Pursuant to certain regulations of Shanghai Stock Exchangeand the Group’s policy, the Company A and Company B’sname are exempted from being disclosed, which containssome business secrets. The Group has completed allapproval procedures for the exemption.
13.(a)
*
AB
2026INTERIM REPORT2026
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION30 June 2026
13. RELATED PARTY TRANSACTIONS
(CONTINUED)(b) Related party transactionsIn addition to the transactions disclosed elsewhere inthis financial information, the Group had the followingtransactions with related parties during the six monthsended 30 June 2026:
For the six months ended
30 June20262025US$’000US$’
(Unaudited)(Unaudited)
Sales of goods to related parties (note (i))(i) Huahong Zealcore 7,633771 Hongri 3,44889
Purchases of goods from related parties (note (ii))
(ii) Hongri 6,06222,924 Company B B1,889– Company A A273– Huahong Zealcore 110162 Zealcore Shanghai 7411
Rental income from a related party (note (iii))(iii) Huali Micro 7,3366,979
Service fee charged by a related party (note (iv))(iv) Huajin 255287
Interest expense charged by a related partyunder lease arrangement as a lessee (note (v))
(v) Huahong Real Estate 372404
Expense paid on behalf of a related party (note (vi))
(vi) Huali Micro 13,31413,170
13.
(b)
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION
30 June 2026
13. RELATED PARTY TRANSACTIONS
(CONTINUED)(b) Related party transactions (Continued)Note (i) The sales of goods to related parties were made
according to the prices and terms agreed betweenthe related parties.Note (ii) The purchases of goods from related parties were
made according to the prices and terms offered bythe related parties.Note (iii)The rental income received from a related party wasbased on the prices and terms agreed between therelated parties.Note (iv)The service fees charged by related parties werebased on the prices and terms agreed between therelated parties.Note (v)The Group entered into leases in respect of certaindormitory properties from Huahong Real Estate.The amount of rent payable by the Group under theleases is US$1,990,000 per year. As at 30 June 2026,the balances of those right-of-use assets and leaseliabilities were US$7,059,000 (31 December 2025:
US$14,578,000) and US$9,162,000 (31 December2025: US$17,520,000), respectively.
Note (vi)The expense paid on behalf of the related party isinterest-free and repayable on demand.
13.(b)
(i)(ii)(iii)(iv)(v)
1,990,000
7,059,00014,578,0009,162,00017,520,000(vi)
2026INTERIM REPORT2026
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION30 June 2026
13. RELATED PARTY TRANSACTIONS
(CONTINUED)(c) Outstanding balances with related parties
The Group had the following significant balances with itsmajor related parties during the reporting period. Thesebalances are unsecured, interest-free and have no fixedterms of repayment.
30 June2026
31 December
2025
US$’000US$’
(Unaudited)(Audited)
Amounts due from related parties Huali Micro 8,0947,766 Huahong Zealcore 2,4692,369 Hongri 1,977– Huajin 12–
Total12,55210,135
Amounts due to related parties Huali Micro 9,8392,244 Hongri 1,6623,361 Company B B810– Huahong Zealcore 580539 ZealCore Shanghai 2047 Company A A2– Huajin –27 Jitong –7
Total12,9136,225
13.
(c)
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION
30 June 2026
13. RELATED PARTY TRANSACTIONS
(CONTINUED)(d) Compensation of key management personnel of theGroup
For the six months ended
30 June20262025US$’000US$’
(Unaudited)(Unaudited)
Short term employee benefits2,4782,164Pension scheme contributions10896Equity-settled share option expense––
Total compensation paid to key management personnel2,5862,260
14. FAIR VALUE AND FAIR VALUE HIERARCHY
OF FINANCIAL INSTRUMENTSThe carrying amounts and fair values of the Group’s financialinstruments, other than those with carrying amounts thatreasonably approximate to fair values, are as follows:
Carrying amountsFair values30 June 2026
31 December
202530 June 2026
31 December
2025
US$’000US$’000US$’000US$’
(Unaudited)(Audited)(Unaudited)(Audited)
Financial assets
Equity investments designatedat fair value through othercomprehensive income
787,420478,799787,420478,799Financial asset at fair valuethrough profit or loss
8,809–8,809–
Financial liabilities
Interest-bearing bank borrowings1,665,4852,787,0961,661,1622,781,090
13.(d)
14.
2026INTERIM REPORT2026
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION30 June 2026
14. FAIR VALUE AND FAIR VALUE HIERARCHY
OF FINANCIAL INSTRUMENTS (CONTINUED)The Group’s finance department headed by the financemanager is responsible for determining the policies andprocedures for the fair value measurement of financialinstruments. The finance department reports directly to thechief financial officer. At each reporting date, the financedepartment analyses the movements in the values of financialinstruments and determines the major inputs applied in thevaluation. The valuation is reviewed and approved by the chieffinancial officer.The fair values of the financial assets and liabilities areincluded at the amount at which the instrument could beexchanged in a current transaction between willing parties,other than in a forced or liquidation sale. The followingmethods and assumptions were used to estimate the fairvalues of those financial assets and liabilities measured at fairvalue:
The fair values of listed equity investments designated at fairvalue through other comprehensive income are based onquoted market prices, adjusted by a discount for liquidity ifthere is any lock-up period attached to the investments.The fair values of unlisted equity investments designated atfair value through other comprehensive income or at fair valuethrough profit or loss have been estimated using the marketapproach:
? If there is a precedent transaction regarding the unlistedinvestments, the fair values are estimated based on theprecedent transaction price and the discount for lack ofcontrol;? Otherwise, the directors will determine comparablepublic companies (peers) based on industry, size,leverage and strategy, and calculate an appropriate pricemultiple, such as price to book value (“P/B”) multiple,for each comparable company identified. The multipleis calculated by dividing the enterprise value of thecomparable company by net assets. The trading multipleis then discounted for considerations such as illiquiditybased on company specific facts and circumstances. Thediscounted multiple is applied to the corresponding netassets of the unlisted equity investments to measure thefair value.
14.
?
?
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION
30 June 2026
14. FAIR VALUE AND FAIR VALUE HIERARCHY
OF FINANCIAL INSTRUMENTS (CONTINUED)The directors believe that the estimated fair values resultingfrom the valuation technique, which are recorded in the interimcondensed consolidated statement of financial position, andthe related changes in fair values, which are recorded in othercomprehensive income, are reasonable, and that they werethe most appropriate values at the end of the reporting period.Fair value hierarchyThe following tables illustrate the fair value measurementhierarchy of the Group’s financial instruments:
Financial assets measured at fair value
As at 30 June 2026
Fair value measurement using
Quotedpricesin activemarkets
Significantobservable
inputs
Significantunobservable
inputs(Level 1)(Level 2)(Level 3)Total
US$’000US$’000US$’000US$’
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
Equity investments designated
at fair value through othercomprehensive income
–94,503692,917787,420Financial asset at fair value throughprofit or loss –8,809–8,809
–103,312692,917796,229
14.
2026INTERIM REPORT2026
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION30 June 2026
14. FAIR VALUE AND FAIR VALUE HIERARCHY
OF FINANCIAL INSTRUMENTS (CONTINUED)Fair value hierarchy (Continued)Financial assets measured at fair value (Continued)
As at 31 December 2025
Fair value measurement usingQuoted prices
in active
markets
Significantobservable
inputs
Significantunobservable
inputs(Level 1)(Level 2)(Level 3)Total
US$’000US$’000US$’000US$’
(Audited)(Audited)(Audited)(Audited)Equity investments designated
at fair value through othercomprehensive income
–34,366444,433478,799During the six months ended 30 June 2026, there were notransfers of fair value measurements between Level 1 andLevel 2 and no transfers into or out of Level 3 for both financialassets and financial liabilities (six months ended 30 June 2025:
nil).
14.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION
30 June 2026
14. FAIR VALUE AND FAIR VALUE HIERARCHY
OF FINANCIAL INSTRUMENTS (CONTINUED)Fair value hierarchy (Continued)The recurring fair value measurement for the Group’sequity investments designated at fair value through othercomprehensive income, was made using significantunobservable inputs (Level 3) as at 30 June 2026. Below is asummary of the valuation techniques used and the key inputsto the valuation:
Valuationtechnique
Significantunobservable inputRange
Sensitivity of fair value tothe input
Equity investments designated
at fair value through othercomprehensive income
Valuation multiples
Average P/B multiple of peers
30 June 2026:
3.8x-9.9x
31 December 2025:
1.7x-4.7x
5% (31 December 2025: 5%)
increase/decrease wouldresult in increase/decreasein fair value by 5% (31December 2025: 5%)
3.8x-9.9x
1.7x-4.7x
5%5%
5%
5%Discount for illiquidity30 June 2026: 30%
31 December 2025: 30%
5% (31 December 2025: 5%)increase/decrease wouldresult in decrease/increasein fair value by 7% (31December 2025: 7%)30%30%
5%
5%
7%
7%Precedenttransaction analysis
Discount for lack of control
30 June 2026: 21%31 December 2025: 22.2%
5% (31 December 2025: 5%)
increase/decrease wouldresult in decrease/increasein fair value by 6% (31December 2025: 6%)21%
22.2%
5%
5%
6%6%
14.
2026INTERIM REPORT2026
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
INFORMATION30 June 2026
14.
15.
14. FAIR VALUE AND FAIR VALUE HIERARCHY
OF FINANCIAL INSTRUMENTS (CONTINUED)Fair value hierarchy (Continued)The movements in fair value measurements within Level 3during the six months ended 30 June 2026 are as follows:
20262025US$’000US$’
(Unaudited)(Unaudited)
Equity investments at fair value through other
comprehensive income:
At 1 January444,433271,921Total gains recognised in other comprehensive
income 234,265–Exchange realignment14,2191,132
At 30 June692,917273,053
15. SHARE OPTION SCHEME
The Company operates a share option scheme for the purposeof providing incentives and rewards to eligible participantswho contribute to the success of the Group’s operations.The following share options were outstanding during the sixmonths ended 30 June 2026:
Number of options
20262025(Unaudited)(Unaudited)
At 1 January179,20919,337,302Exercised during the period(112,209)(8,610,783)Forfeited during the period–(4,250)
At 30 June67,00010,722,269
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIALINFORMATION
30 June 2026
16.
17.
97.4988%
18.
16. DIVIDENDS
The Board did not recommend the payment of any dividendduring the six months ended 30 June 2026 (six months ended30 June 2025: nil).
17. EVENT AFTER THE REPORTING PERIOD
As at 8 July 2026, China Securities Regulatory Commissionapproved the registration of the proposed acquisition of
97.4988% of equity interests in Huali Micro (the
“ProposedAcquisition”), representing that the conditions precedent in theacquisition agreement to complete the Proposed Acquisitionhas been substantially fulfilled. As at the date of approvalof the interim condensed consolidated financial information,certain final procedures to complete the Proposed Acquisition,including administrative registration, remain outstanding.Save as disclosed above, there is no material subsequentevent undertaken by the Group after 30 June 2026.
18. APPROVAL OF THE INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATIONThe interim condensed consolidated financial information wasapproved and authorised for issue by the board of directors on26 August 2026.
2026INTERIM REPORT2026
OTHER DISCLOSURES30 JUNE 2026
67,000
0.004%
SHARE OPTION SCHEMEThe Company adopted a share option scheme on1 September 2015, which became effective on 4September 2015. The share option scheme shall bevalid and effective for a period of 7 years commencingon the date of adoption. It has therefore expiredon 1 September 2022. No further options could begranted, and none has been granted, under theShare Option Scheme from that date. As of 30 June2026, the Company had options for 67,000 sharesoutstanding under the share option scheme, whichrepresented approximately 0.004% of the Company’sissued shares as of that date. The table below setsout details of outstanding options granted to Directorsand other grantees under the share option schemeand transactions during the six months ended 30 June2026:
OTHER DISCLOSURES
30 JUNE 2026
Number of share optionsName or category of participants
DirectorsFormer directorsOther employeesIn aggregate
Granted on 4 September 2015
––988,000–29,262,000––30,250,000Granted on 24 December 2018
–––680,000–33,820,000–34,500,000Granted on 29 March 2019
–500,000–––––500,000Granted on 23 December 2019
––––––2,482,0002,482,000Cancelled/lapsed during the year 2015
––––-130,000––-130,000Cancelled/lapsed during the year 2016
––––-1,458,000––-1,458,000Cancelled/lapsed during the year 2017
––––-1,353,399––-1,353,399Cancelled/lapsed during the year 2018
––––-754,595––-754,595Cancelled/lapsed during the year 2019
–––-600,000-58,000-1,035,000-36,000-1,729,000Cancelled/lapsed during the year 2020
––-119,000-80,000–-993,904-84,000-1,276,904Cancelled/lapsed during the year 2021
–-62,500–––-5,751,868-592,993-6,407,361Cancelled/lapsed during the year 2022
–––––-543,728-73,983-617,711Cancelled/lapsed during the year 2023
–––––-8,168-6,900-15,068Cancelled/lapsed during the year 2024
–––––-87,758-116,668-204,426Cancelled/lapsed during the year 2025
–––––-12,715–-12,715Exercised during the period
––––––112,209112,209Cancelled during the period
––––––––Lapsed during the period
––––––––Outstanding as at 1 January 2026
––––––179,209179,209Outstanding as at 30 June 2026
––––––67,00067,000Vesting period of share options–Note 1Note 2Note 3Note 2Note 3Note 4
–123234Exercise period of share options–Note 5Note 6Note 7Note 6Note 7Note 8
–567678Exercise price of share options–HK$18.400HK$6.912HK$15.056HK$6.912HK$15.056HK$17.952
–18.4006.91215.0566.91215.05617.952Weighted average closing price of theshares immediately before the dateson which the share options were exercisedHK$127.32 127.32
SHARE OPTION SCHEME (CONTINUED)
2026INTERIM REPORT2026
OTHER DISCLOSURES30 JUNE 2026
XV
SHARE OPTION SCHEME (CONTINUED)Notes:
1 Subject to conditions as set out in the grant notice, onefourth of the options shall vest on each of 23 December2021, 12 August 2022, 11 August 2023 and 9 August20242 Subject to conditions as set out in the grant notices, onethird of the options shall vest on each of 4 September2017, 4 September 2018 and 4 September 20193 Subject to conditions as set out in the grant notices, foremployees at or above the level of the vice president,one fourth of the options shall vest on each of 24December 2020, 24 December 2021, 24 December 2022and 24 December 2023; for the other employees, onethird of the options shall vest on each of 24 December2020, 24 December 2021 and 24 December 20224 Subject to conditions as set out in the grant notices, foremployees at or above the level of the vice president,one fourth of the options shall vest on each of 23December 2021, 23 December 2022, 23 December 2023and 23 December 2024; for the other employees, onethird of the options shall vest on each of 23 December2021, 23 December 2022 and 23 December 20235 The exercise period of share options is from 29 March
2021 to 28 March 20266 The exercise period of share options is from 4 September
2017 to 3 September 20227 The exercise period of share options is from 24
December 2020 to 23 December 20258 The exercise period of share options is from 23
December 2021 to 22 December 2026
Please refer to note 14 of the Notes to the InterimCondensed Consolidated Financial Information forfurther details.
DIRECTORS’ AND CHIEF EXECUTIVE’SINTERESTS IN SHARES ANDUNDERLYING SHARES OF THECOMPANY
As of 30 June 2026, none of the Directors nor the ChiefExecutive of the Company had any interests and shortpositions in the shares, underlying shares or debenturesof the Company or any associated corporation (withinthe meaning of Part XV of SFO), as recorded in theregister kept under section 352 of the SFO, or asotherwise notified to the Company and the Hong KongStock Exchange pursuant to the Model Code.
OTHER DISCLOSURES
30 JUNE 2026
5%
Substantial shareholders
Capacity and nature ofownership
Number ofshares held
Approximatepercentageof aggregateownership inissued sharecapital *
*
Shanghai Hua Hong International, Inc. (Hua Hong International)
Legal and beneficial owner347,605,650
(1)
20.00%
(2)
Shanghai Huahong (Group) Co., Ltd. (Huahong Group)
(2)
Interest in a controlled corporation
347,605,650
(1)
20.00%
(2)
Legal and beneficial owner1,198,517
(3)
0.07%
Sino-Alliance International, Ltd. (Sino-Alliance International)
Legal and beneficial owner160,545,541
(1)(4)
9.24%
Sino-Alliance International, Ltd. (Sino-Alliance International)
Interest in a controlled corporation
28,415,606
(1)
1.64%
Shanghai Alliance Investment Ltd. (SAIL)
Interest in a controlled corporation
188,961,147
(1)(5)
10.88%
SUBSTANTIAL SHAREHOLDERS’
AND OTHER PERSONS’OWNERSHIPIN THE SHARES AND UNDERLYINGSHARES OF THE COMPANY
As of 30 June 2026, persons other than a Director orChief Executive of the Company, having ownershipof 5% or more or short positions in the shares andunderlying shares of the Group, were as follows:
2026INTERIM REPORT2026
OTHER DISCLOSURES30 JUNE 2026
(1)(2)
(3) 1,198,517A
(4) Sino-Alliance International
3,084
(5) Sino-AllianceInternational*
1,737,726,402
SUBSTANTIAL SHAREHOLDERS’
AND OTHER PERSONS’OWNERSHIPIN THE SHARES AND UNDERLYINGSHARES OF THE COMPANY(CONTINUED)Notes:
(1) Long positions in the shares of the Company.
(2) Hua Hong International is a wholly-owned subsidiary of
Huahong Group.
(3) Huahong Group directly held a total of 1,198,517 A
shares.
(4) Including 3,084 shares held in escrow by Sino-Alliance
International pursuant to an escrow arrangement.
(5) SAIL indirectly held interests in the Company through
two wholly-owned subsidiaries, including Sino-AllianceInternational.* The percentages are calculated based on the total
number of issued shares of the Company as of 30 June2026, i.e., 1,737,726,402 shares.Except as disclosed above, so far as is known to any ofthe Directors and Chief Executive of the Company, as of30 June 2026, no other person or corporation other thana Director or Chief Executive of the Company had anyinterests or short positions in any shares or underlyingshares of the Company which was recorded in theregister required to be kept by the Company pursuantto section 336 of the SFO.
OTHER DISCLOSURES
30 JUNE 2026
6.05%
1.29%
7,7007,400
PURCHASE, SALE OR REDEMPTIONOF SECURITIESNeither the Company nor any of its subsidiariespurchased, sold or redeemed any of the Company’slisted securities during the six months ended 30 June2026.GEARING RATIOThe Group monitors capital using a gearing ratio,which is net debt divided by total equity plus net debt.The Group includes, within net debt, trade payables,other payables and accruals, interest-bearing bankborrowings, lease liabilities and amounts due to relatedparties, less cash and cash equivalents. The Group’sgearing ratio as at 30 June 2026 was 6.05% (31December 2025: 1.29%).EMPLOYEES AND REMUNERATIONPOLICIESAs at 30 June 2026, the Company had approximately7,700 employees in the PRC and overseas (30June 2025: approximately 7,400). The Company’sremuneration policy is reviewed periodically anddetermined by reference to the analysis on marketcompetitiveness, company performance, and individualqualifications and performance. Staff benefits includemedical schemes, mandatory social insurance andprovident fund etc.
2026INTERIM REPORT2026
OTHER DISCLOSURES30 JUNE 2026
C.2.1C1
COMPLIANCE WITH THE DEED OFNON-COMPETITION AND DEED OFRIGHT OF FIRST REFUSALHuahong Group, SAIL and INESA, being controllingshareholders of the Company at the time, enteredinto a deed of non-competition (the“Deed ofNon-competition”) dated 23 September 2014, detailsof which have been set out in the paragraph headed“Non-competition Undertaking”in the section headed“Relationship with Controlling Shareholders”of theCompany’s prospectus dated 3 October 2014 (the“Prospectus”). In addition, Huahong Group andSAIL entered into a deed of right of first refusal (the“Deed of Right of First Refusal”) dated 10 June 2014,details of which have been set out in the paragraphheaded“Right of First Refusal”in the section headed“Relationship with Controlling Shareholders”of theProspectus.As of 30 June 2026, the Company has reviewed thewritten declaration from each of Huahong Group, SAILand INESA on their compliance with their commitmentsunder the Deed of Non-competition and the Deedof Right of First Refusal (as the case may be). TheIndependent Non-Executive Directors have reviewedthe status of compliance and confirmed that all thecommitments under the Deed of Non-competition andthe Deed of Right of First Refusal (as the case may be)have been complied with by the relevant parties.CORPORATE GOVERNANCEThe Company is committed to maintaining a highstandard of corporate governance with a view tosafeguarding the interests of its shareholders andenhancing corporate value and accountability.The Board is of the view that, save for Code ProvisionC.2.1 as disclosed below, the Company has compliedwith the code provisions set out in the CorporateGovernance Code as contained in Appendix C1 of theListing Rules during the six-month period ended 30June 2026.
OTHER DISCLOSURES
30 JUNE 2026
CORPORATE GOVERNANCE(CONTINUED)Since 31 October 2025, both positions of the Chairmanof the Board and the President have been held byDr. Peng Bai. In view of Mr. Bai’s profile, extensiverelevant industry knowledge and working experience inmultinational corporations, the Board has confidencethat the vesting of the roles of both the Chairmanand the President in Mr. Bai is conducive to improvethe efficiency of the Company’s implementation ofstrategies and solicit consensus among the seniormanagement team. Therefore, the Board considers thatthe deviation from the Code Provision C.2.1 of the Codeis not inappropriate. In addition, apart from Mr. Baiwho is an executive Director, the Board comprises fournon-executive Directors and three independent non-executive Directors as at 31 December 2025 and asat the date of this report. The Company considers thatBoard is appropriately structured with balance of powerto provide sufficient checks to protect. The interests ofthe Company and its shareholders. At the same time,the Board will ensure its own effective functioning,including that all appropriate issues are discussedby the Board in a timely manner, that all Directors areproperly briefed on issues arising at Board meetingsand all Directors receive adequate, complete andreliable information. The Chairman of the Board highlyvalues communication with the Independent Non-Executive Directors and will hold meetings with themat least once each year without the presence of otherDirectors.
C.2.1
2026INTERIM REPORT2026
OTHER DISCLOSURES30 JUNE 2026
CODE OF CONDUCT FOR SECURITIESTRANSACTIONS BY DIRECTORS
The Company has adopted a code of conductregarding the Directors’securities transactions on termsno less exacting than the required standard set out inthe Model Code. Having made specific enquiries of allDirectors, the Company has received their confirmationthat they have complied with the required standard asset forth in the Model Code during the six-month periodended 30 June 2026.
SUFFICIENCY OF PUBLIC FLOATBased on the information that is publicly available to theCompany and within the knowledge of the directors asat the date of this report, the Company has maintainedthe prescribed amount of public float as required underthe Listing Rules.AUDIT COMMITTEEThe Audit Committee, comprising one Non-executiveDirector and two Independent Non-executive Directorsof the Company, has reviewed and approved theunaudited results of the Group for the six months ended30 June 2026 and has discussed with management theaccounting principles and practices adopted by theGroup, internal controls and financial reporting matters.
OTHER DISCLOSURES
30 JUNE 2026
D2( www.hkexnews.hk )( www.huahonggrace.com )
PUBLICATION OF INTERIM REPORTON THE WEBSITES OF THE HONGKONG STOCK EXCHANGE AND THECOMPANYThe interim report for the six months ended 30 June2026 containing information required by Appendix D2of the Listing Rules will be dispatched to shareholdersand published on the websites of the Hong Kong StockExchange (www.hkexnews.hk) and the Company (www.huahonggrace.com) in due course.
By Order of the BoardHua Hong Grace Semiconductor LimitedDr. Peng BaiChairman and Executive Director
www.huahonggrace.com