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Bank of America

Bank of America is one of the largest financial institutions in the United States, with more than $3.2 trillion in assets. It is organized into four major segments: consumer banking, global wealth and investment management, global banking, and global markets. Bank of America's consumer-facing lines of business include its network of branches and deposit-gathering operations, retail lending products, credit and debit cards, and small-business services. The company's Merrill Lynch operations provide brokerage and wealth-management services, as does its private bank. Wholesale lines of business include investment banking, corporate and commercial real estate lending, and capital markets operations. Bank of America has operations in several countries but is primarily US-focused.

4.125% PRF PERPETUAL USD 25 - 1/1,000th Int Ser PP

Bank of America Corporation Depositary Shares, each representing a 1/1,000th interest in a share of 4.125% Non-Cumulative Preferred Stock, Series PP

Bank of America Corp

News

Financing

ABAT

American Battery Technology Company Receives Letter of Interest From Export-Import Bank of the United States For $900M In Financing To Support Construction Of Commercial-Scale Lithium Mine And Claystone-To-Lithium Hydroxide Refinery

Domino's Pizza, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DPZ#NASDAQ">DPZ</a>) reported better-than-expected earnings for its <a href="https://www.benzinga.com/quote/DPZ/earnings">first quarter on Monday</a>.
The company posted quarterly earnings of $4.33 per share which beat the analyst consensus estimate of $4.07 per share. The company reported quarterly sales of $1.11 billion which missed the analyst consensus estimate of $1.13 billion.
&#8220;Domino&#8217;s Q1 results demonstrate that our Hungry for MORE strategy continues to drive market share growth in QSR Pizza across both our US and international businesses,&#8221; said Russell Weiner, Domino&#8217;s Chief Executive Officer. &#8220;Sustained market share growth reflects a company&#8217;s ability to control what is under its control, a key to long term success. In the face of a challenging global macroeconomic environment, our Hungry for MORE strategic pillars are working together to drive MORE sales, MORE stores and MORE profits, annually. This is how we will deliver long term value for our franchisees and shareholders.&#8221;
Domino's shares gained 0.6% to close at $490.64 on Monday.
These analysts made changes to their price targets on Domino's following earnings announcement.
<ul>
<li>TD Securities analyst Andrew Charles maintained Domino&#8217;s Pizza with a Buy and raised the price target from $490 to $510.</li>
<li>Morgan Stanley analyst Brian Harbour maintained the stock with an Overweight rating and raised the price target from $492 to $510.</li>
<li>Benchmark analyst Todd Brooks maintained Domino&#8217;s Pizza with a Buy and raised the price target from $520 to $535.</li>
</ul>
Considering buying DPZ stock? Here&#8217;s what analysts think: 
<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1024" height="569" src="https://editorial-assets.benzinga.com/wp-content/uploads/2025/04/29093047/image-218-1024x569.png" alt="" class="wp-image-892946" style="width:592px;height:auto" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2025/04/29093047/image-218-1024x569.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/04/29093047/image-218-300x167.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/04/29093047/image-218-768x427.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/04/29093047/image-218.png 1143w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
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Photo via Shutterstock

Earnings

Price Target

Markets

Analyst Ratings

Trading Ideas

Domino's Pizza Analysts Increase Their Forecasts After Upbeat Earnings

WIIM

OPCH

OPCH stock has given up its prior gain. Option Care Health shares were trading higher after the company reported better-than-expected Q1 financial results and raised its FY25 guidance.

PayPal Holdings Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PYPL#NASDAQ">PYPL</a>) stock tanked Tuesday after it reported <a target="_blank" href="https://www.benzinga.com/topic/paypal" rel="noreferrer noopener">first-quarter 2025 results</a>.
The company reported: 
<ul>
<li><a href="https://investor.pypl.com/financials/quarterly-results/default.aspx" target="_blank" rel="noreferrer noopener">Quarterly revenue growth</a> was 1% year-over-year to $7.79 billion, missing the analyst consensus estimate of $7.84 billion. </li>
<li>Adjusted EPS was $1.33, beating the <a href="https://www.benzinga.com/calendars/earnings" target="_blank" rel="noreferrer noopener">analyst consensus estimate</a> of $1.16.</li>
<li>Total payment volumes increased 3% year-over-year to $417.2 billion in the quarter. </li>
<li>Payment transactions were down 7% to $6 billion</li>
<li>Payment transactions per active account decreased 1% on a trailing 12-month basis to $59.4.</li>
<li>Total active accounts&nbsp;increased by 2% to 436 million. Sequentially, active accounts increased by 0.3%, or 1.5 million.</li>
<li>The operating margin increased 447 basis points to 19.6%, and the adjusted operating margin increased 257 bps to 20.7%.</li>
<li>Operating cash flow was $1.2 billion, and free cash flow was $1 billion. </li>
</ul>
PayPal held $15.8 billion in cash and equivalents as of March 31, with $12.6 billion in debt.
CEO Alex Chriss said the quarter marked the company&#8217;s fifth consecutive quarter of profitable growth, with progress across branded checkout, PSP, omnichannel, and Venmo.
Outlook:&nbsp;PayPal expects a second-quarter adjusted EPS of $1.29-$1.31, compared to $1.19 for the previous year&#8217;s period, and the&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">analyst consensus estimate</a> is $1.21.
PayPal reiterated <a target="_blank" href="https://www.benzinga.com/news/buybacks/25/02/43462528/paypal-q4-earnings-revenue-and-eps-beat-margin-pressure-15-billion-buyback-outlook-and-more" rel="noreferrer noopener">full-year 2025</a> adjusted EPS of $4.95-$5.10, compared to $4.65 Y/Y.&nbsp;Current analysts estimate&nbsp;an EPS of $5.01.
Mizuho analyst Dan Dolev <a target="_blank" href="https://www.bloomberg.com/news/articles/2025-04-29/paypal-profit-gauge-tops-estimates-in-sign-of-turnaround-success?sref=TBDibEcD" rel="noreferrer noopener">told</a> Bloomberg he expects that sign of progress to help PayPal shares rebound. He said maintaining the full-year guidance demonstrated the firm&#8217;s strength.
Morgan Stanley <a href="https://www.cnbc.com/2025/04/29/paypal-pypl-q1-earnings.html" target="_blank" rel="noreferrer noopener">told</a> CNBC that investor sentiment remained bearish due to the potential impact of tariffs, competitive pressure from Apple Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), and the risk of a long-term slowdown in branded checkout growth. 
Jefferies told CNBC that PayPal&#8217;s China cross-border exposure is an emerging risk tied to potential new tariffs and changes to the de minimis exemption.
Price Action: At the last check on Tuesday, PayPal stock was down 2.62% at $63.23 premarket.
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</ul>
Image: Shutterstock

Guidance

Media

AAPL

PYPL

PayPal Earnings Beat, But Slower Spending And Checkout Use Weigh On Results

Coastal Finl (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CCB#NASDAQ">CCB</a>) reported quarterly earnings of $0.63 per share which missed the analyst consensus estimate of $0.86 by 26.74 percent. This is a 26 percent increase over earnings of $0.50 per share from the same period last year. The company reported quarterly sales of $139.54 million which missed the analyst consensus estimate of $155.30 million by 10.15 percent. This is a 5.65 percent decrease over sales of $147.89 million the same period last year.

Earnings Misses

Coastal Finl Q1 EPS $0.63 Misses $0.86 Estimate, Sales $139.54M Miss $155.30M Estimate

Loop Capital analyst Ananda Baruah maintains MaxLinear (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MXL#NASDAQ">MXL</a>) with a Hold and lowers the price target from $18 to $10.

Loop Capital Maintains Hold on MaxLinear, Lowers Price Target to $10

Loop Capital analyst Alton Stump maintains Domino's Pizza (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DPZ#NASDAQ">DPZ</a>) with a Buy and raises the price target from $555 to $564.

Loop Capital Maintains Buy on Domino's Pizza, Raises Price Target to $564

Mizuho analyst Siti Panigrahi maintains Cadence Design Systems (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/CDNS#NASDAQ">CDNS</a>) with a Outperform and raises the price target from $300 to $325.

CDNS

Mizuho Maintains Outperform on Cadence Design Systems, Raises Price Target to $325

AMZN

Amazon shares are trading lower after the White House called the company's plan to display the cost of tariffs a "hostile and political act."

HC Wainwright &amp; Co. analyst Yi Chen reiterates Alpha Tau Medical (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DRTS#NASDAQ">DRTS</a>) with a Buy and maintains $9 price target.

Reiteration

DRTS

HC Wainwright & Co. Reiterates Buy on Alpha Tau Medical, Maintains $9 Price Target

Amazon Shares Lower, White House Press Secretary Called Amazon's Plan To Display Cost Of Tariffs 'hostile and political act'

Mizuho analyst John Roberts maintains Crown Holdings (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CCK#NYSE">CCK</a>) with a Outperform and raises the price target from $105 to $110.

Mizuho Maintains Outperform on Crown Holdings, Raises Price Target to $110

Roper Technologies, Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ROP#NASDAQ">ROP</a>) reported better-than-expected earnings for its first quarter and <a href="https://www.benzinga.com/quote/ROP/earnings">raised its forecast on Monday</a>.
The company posted first-quarter adjusted earnings per share of $4.78, beating the street view of $4.74. Quarterly sales of $1.88 billion outpaced the analyst consensus estimate of $1.82 billion.
&#8220;Roper had a strong start to 2025 and our enterprise continues to execute at a high level,&#8221; said Neil Hunn, Roper&#8217;s President and CEO. &#8220;Our total revenue growth of 12% was driven by an 8% acquisition contribution and 5% organic growth. Importantly, our trailing-twelve-months free cash flow grew 12% with a 31% free cash flow margin. Last week, we completed the acquisition of CentralReach, a leading provider of cloud-native software enabling the workflow and administration of Applied Behavior Analysis therapy. CentralReach is a terrific business that not only meets each of our historical acquisition criteria but also meets our higher growth and higher return expectations.&#8221;
Roper Technologies expects fiscal 2025 adjusted earnings per share of $19.80-$20.05 (compared to a previous outlook of $19.75-$20.00), versus the $19.92 estimate. It increased its full-year total revenue growth outlook to ~12% or $7.88 billion (compared to a previous outlook of 10%+ or $7.74 billion) and an analyst estimate of $7.74 billion. It reiterated organic revenue growth of +6-7%.
Roper Technologies shares fell 1% to close at $551.95 on Monday.
These analysts made changes to their price targets on Roper Technologies following earnings announcement.
<ul>
<li>Baird analyst Joe Vruwink maintained Roper Technologies with an Outperform rating and raised the price target from $660 to $668.</li>
<li>Stifel analyst Brad Reback maintained the stock with a Buy rating and lowered the price target from $685 to $650.</li>
</ul>
Considering buying ROP stock? Here&#8217;s what analysts think: 
<figure class="wp-block-image size-large is-resized"><img loading="lazy" decoding="async" width="1024" height="588" src="https://editorial-assets.benzinga.com/wp-content/uploads/2025/04/29092323/image-217-1024x588.png" alt="" class="wp-image-892919" style="width:573px;height:auto" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2025/04/29092323/image-217-1024x588.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/04/29092323/image-217-300x172.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/04/29092323/image-217-768x441.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/04/29092323/image-217.png 1106w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure>
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</ul>
Photo via Shutterstock

Pre-Market Outlook

These Analysts Revise Their Forecasts On Roper Technologies Following Q1 Results

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="900" height="600" src="https://contributor-assets.benzinga.com/wp-content/uploads/2025/04/29103831/Nanhua.jpeg" alt="" class="wp-image-11830" srcset="https://contributor-assets.benzinga.com/wp-content/uploads/2025/04/29103831/Nanhua.jpeg 900w,https://contributor-assets.benzinga.com/wp-content/uploads/2025/04/29103831/Nanhua-300x200.jpeg 300w,https://contributor-assets.benzinga.com/wp-content/uploads/2025/04/29103831/Nanhua-768x512.jpeg 768w" sizes="(max-width: 900px) 100vw, 900px" /></figure>
The company's planned Hong Kong IPO would complement its current Shanghai listing, and is part of efforts to advance its globalization strategy
<h4 class="wp-block-heading">Key Takeaways:</h4>
<ul>
<li>Nanhua Futures has filed to list in Hong Kong, reporting its net profit rose 13.7% last year to 458 million yuan</li>
<li>The company hopes to expand the reach of its fast-growing overseas business, which could soon account for more than half of its revenue</li>
</ul>
Volatile global financial markets, roiled by geopolitical tensions and shifting economic policies, are leaving many investors increasingly risk-averse these days. But that hasn't fazed&nbsp;Nanhua Futures Co. Ltd.&nbsp;(603093.SH), which is moving ahead with plans to list in Hong Kong, complementing its existing Shanghai listing, as part of a bid to expand its global reach.
Founded in 1996, Nanhua is one of China's earliest futures companies, based in the scenic Eastern city of Hangzhou, according to its&nbsp;<a href="https://www1.hkexnews.hk/app/sehk/2025/107301/documents/sehk25041702070.pdf">listing document</a>&nbsp;filed earlier this month. The company takes pains to emphasize it has no ties with Hong Kong-listed South China Financial Holdings Ltd. (0619.HK) or its affiliates, whose Chinese names sound similar to Nanhua's.
The company offers four main types of service, namely, domestic futures brokerage, domestic risk management, domestic wealth management and offshore financial services. As their name suggests, the first three are for customers based in China, while the last caters to overseas clients. Its domestic and international businesses are split roughly evenly, accounting for around 51% and 48% of the company's revenue last year.
<h4 class="wp-block-heading">Rising offshore transactions</h4>
Like many Chinese providers of trading services for financial products, Nanhua derives most of its revenue from commissions and transaction fees, as well as interest on its investments. Its domestic futures brokerage commissions and transaction fees generated net revenue of 404 million yuan ($55.4 million) in 2023 and 300 million yuan in 2024, down 25.8%. Revenue from its overseas business moved in the other direction, growing by 45.7% to 146 million yuan over that period. Nanhua suffered at home from falling average commissions for its domestic futures business, while it benefited overseas from rising volume for its offshore futures transactions.
The company's offshore arm provides services related to futures, as well as asset management, securities brokerage and leveraged foreign exchange transactions, operating out of branches in Hong Kong, Chicago, Singapore and London.
Its net profit has risen steadily over the past three years, jumping 63.8% from 246 million yuan in 2022 to 403 million yuan in 2023. It increased another 13.7% to 458 million yuan last year, which the company attributes largely to growing profitability of its offshore business.
As it faces intense competition at home, one of Nanhua's goals is to continue building up its overseas operations. It believes it can use a Hong Kong listing to strengthen the capital base for its overseas branches and facilitate expansion of its overseas operations, giving it more resources to compete and mitigate risk in the global market.
However, rising geopolitical tensions could throw a wrench into some of those global aspirations. New risks in such an environment could include tougher regulatory restrictions or outright barriers against foreign companies in some countries.
<h4 class="wp-block-heading">Tech innovation</h4>
As its name implies, futures brokerage is the biggest of Nanhua's three main domestic business segments. The company hopes to stay ahead of the crowded field through tech innovation, aiming to further advance its fintech and digital technologies, strengthen its risk management system for futures and spot transactions, and to optimize the speed and reliability of its trading systems, to give it competitive advantages. China's domestic industry is plagued by homogeneity, making differentiation through technology a plausible differentiator. But saying something and putting such plans into action are different matters.
If its Hong Kong IPO succeeds, Nanhua would join industry peers&nbsp;Holly Futures&nbsp;(3678.HK; 001236.SZ) and&nbsp;Zhongtai Futures&nbsp;(1461.HK) in listing on the city's stock exchange. Holly is the first company with dual listings Hong Kong and on China's domestic A-share market, giving it a first-mover advantage in that regard. Its Hong Kong shares currently trade at a price-to-earnings (P/E) ratio of around 73 times. The similarly globally minded Zhongtai trades at an even higher 100 times. But such high figures could be inflated by lack of trading in the stocks, reflecting a major challenge that Nanhua may face – namely, lack of investor interest – if it completes its Hong Kong IPO.
For comparison purposes, more reasonably valued A-share peers might be better benchmarks. Leading futures companies&nbsp;Yongan&nbsp;(600927.SH) and&nbsp;Ruida&nbsp;(002961.SZ) trade at P/E ratios of 25 times and 17 times, respectively, compared to a similar 17 for Nanhua's Shanghai-listed shares. So, the company should theoretically fetch a similar-level valuation in Hong Kong, where stocks from the same company are often valued lower than their counterparts in Shanghai and Shenzhen.
In short, Nanhua looks like an interesting bet for its status as one of China's earliest futures companies to go global, with some apparent success. But many potential obstacles could lie ahead, as the company drives into turbulent global financial markets, and tariffs and geopolitics pose one of the biggest risks for multinationals. Limited understanding by Hong Kong investors about the ways of Mainland Chinese futures companies might also weigh on its valuation, potentially leading to low trading volumes and limited interest in Nanhua's stock if and when it completes its new listing plan.

Asia

Equities

IPOs

Opinion

Nanhua Futures Steps Up Global Journey With Hong Kong Listing Plan

Mizuho analyst Steven Valiquette maintains Align Technology (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ALGN#NASDAQ">ALGN</a>) with a Outperform and lowers the price target from $250 to $245.

ALGN

Mizuho Maintains Outperform on Align Technology, Lowers Price Target to $245

Spotify Technology&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPOT#NYSE">SPOT</a>) stock fell on Tuesday&nbsp;after the company reported first-quarter 2025 financial results. Here's a look at the key figures&nbsp;<a target="_blank" href="https://investors.spotify.com/home/default.aspx" rel="noreferrer noopener">from the quarter</a>.&nbsp;&nbsp;
The Details:&nbsp;Spotify reported quarterly earnings of $1.13 per share, which missed the&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/earnings" rel="noreferrer noopener">analyst consensus estimate</a> of $2.33.
The company reported quarterly sales of $4.41 billion (4.19 billion euros), up by 15% year-on-year, which beat the analyst consensus estimate of $4.20 billion.
Also Read: <a target="_blank" href="https://www.benzinga.com/government/regulations/25/02/43983837/spotify-ceo-wants-eu-to-penalize-apple-for-defying-regulations" rel="noreferrer noopener">Spotify CEO Wants EU To Penalize Apple For Defying Regulations</a>
Spotify clocked monthly average user (MAU) net additions of 3 million quarter-over-quarter to 678 million, which is in line with the guidance.
Premium subscribers grew 12% year-over-year to 268 million, reflecting year-over-year and quarter-over-quarter growth across all regions, beating expectations by 3 million.
Within Premium, the average revenue per user (ARPU) rose 4% year-over-year to 4.73 euros, and ad-supported revenue rose 8%.
Margins: The gross margin improved by 403 bps year-over-year to 31.6%, driven by improvements in its Premium and Ad-Supported segments.
The Premium gross margin was 33.5%, up 332 bps&nbsp;year-over-year, driven by favorability from audiobooks and music.&nbsp;
The ad-supported gross margin was 15.3%, up 885 bps year-over-year. This was driven by favorability from music, Other Cost of Revenue, and podcasts.
Operating income surged 203% year-over-year to 509 million euros with a margin of 12.1%.
Spotify held 8.0 billion euros in cash and equivalents, generating 534 million euros in free cash flow.
The company's workforce consisted of 7,258 full-time employees globally, down from 7,721 last year.
Outlook: Spotify expects fiscal second-quarter 2025 revenue of $4.52 billion (4.3 billion euros) versus&nbsp;an <a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">analyst&nbsp;consensus estimate</a> of $4.39 billion&nbsp;and total MAUs of 689 million.&nbsp;
Bloomberg analyst&nbsp;Geetha Ranganathan <a target="_blank" href="https://www.bloomberg.com/news/articles/2025-04-29/spotify-spot-subscriber-count-climbs-12-beating-forecast?sref=TBDibEcD" rel="noreferrer noopener">said</a> that despite the overall uncertainty, the competitive moat is deepening and the long-term outlook is positive with several levers like potential price increases, a new superfan tier, a bigger ad push and new features like video podcasts.
Spotify&nbsp;stock has gained 31% year-to-date.
Price action:&nbsp;SPOT stock traded lower by 7.15% at $555.01 premarket at the last check on Tuesday.
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</ul>
Photo by Kaspars Grinvalds via Shutterstock

Eurozone

Movers

Tech

SPOT

Spotify Adds 3 Million Subscribers But Profit Miss Sends Stock Sliding

Barclays analyst Nicholas Campanella maintains WEC Energy Group (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WEC#NYSE">WEC</a>) with a Equal-Weight and raises the price target from $99 to $101.

Barclays Maintains Equal-Weight on WEC Energy Group, Raises Price Target to $101

Benchmark analyst Todd Brooks maintains Domino's Pizza (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/DPZ#NASDAQ">DPZ</a>) with a Buy and raises the price target from $520 to $535.

Benchmark Maintains Buy on Domino's Pizza, Raises Price Target to $535

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="900" height="600" src="https://contributor-assets.benzinga.com/wp-content/uploads/2025/04/29063916/Novosense-0429-900x600-1.png" alt="" class="wp-image-11816" srcset="https://contributor-assets.benzinga.com/wp-content/uploads/2025/04/29063916/Novosense-0429-900x600-1.png 900w,https://contributor-assets.benzinga.com/wp-content/uploads/2025/04/29063916/Novosense-0429-900x600-1-300x200.png 300w,https://contributor-assets.benzinga.com/wp-content/uploads/2025/04/29063916/Novosense-0429-900x600-1-768x512.png 768w" sizes="(max-width: 900px) 100vw, 900px" /></figure>
The analog chipmaker's cash and margins dropped sharply last year, sending it into the red

<h4 class="wp-block-heading">Key Takeaways:</h4>
<ul>
<li>Novosense has filed for a Hong Kong IPO, posting strong revenue growth last year thanks to an acquisition, as it reported a second consecutive annual loss</li>
<li>The company may get some temporary relief from Chinese tariffs that could affect U.S. chipmakers, which controlled 22% of China's analog chip market last year</li>
</ul>
Despite U.S. efforts to isolate China's young microchip industry, the sector remains very much connected to an extremely competitive global marketplace. That difficult reality is front-and- center in a new Hong Kong IPO application from analog chipmaker&nbsp;Suzhou Novosense Microelectronics Co. Ltd.&nbsp;(688052.SH), which is seeking investor cash a second time after listing on Shanghai's Nasdaq-style STAR Market in 2022.
Novosense isn't exactly a startup, with a history dating back to 2013. It was profitable for at least part of that history, recording an annual profit as recently as 2022, according to its&nbsp;<a href="https://www1.hkexnews.hk/app/sehk/2025/107309/documents/sehk25042502834.pdf">listing document</a>&nbsp;filed last Friday with the Hong Kong Stock Exchange. But its gross margin has plunged since that time, as the company faces stiff competition in a global chip sector that has recently added major new capacity after big shortages surfaced during the pandemic.
While things don't look all that positive for Novosense right now, one potential saving factor for the company could be the building U.S.-China trade war. That's because Novosense sells mostly to the China market, where U.S. imports are suddenly facing tariffs of up to 125% in response to even higher U.S. tariffs on Chinese goods imposed by President Donald Trump.
That could play to Novosense's advantage, since five of the 15 biggest analog chip sellers in the China market are from the U.S., accounting for about 22% of sales, according to the listing document. If the tariffs remain in place, chips from those U.S. companies could become significantly more expensive, driving buyers to cheaper options from both domestic Chinese companies and other manufacturers from Asia and Europe.
Novosense notes that much of what is happening is still in progress, as China works out a definition of what exactly is a U.S.-made chip, since many chipmakers are really just design houses whose actual manufacturing is done under contract with third-party companies in locations like Taiwan, Japan, Singapore and Europe.
"On April 11, 2025, the China Semiconductor Industry Association issued a notice clarifying the rules for determining the country of origin for semiconductors in connection with import declarations and tariff charges," Novosense said in its application. "According to the notice, the country where the wafer was fabricated will be deemed the country of origin, regardless of where the chip is packaged."
Obviously, much remains up in the air, including whether the tariffs will stay in place long-term or are just a bargaining tactic that could be quickly removed if the U.S. and China reach a new trade agreement. Since most U.S. chipmakers use manufacturing partners in other countries, it's also possible their products won't be subject to tariffs at all.
While the tariffs could provide some short- to mid-term relief for Novosense, the company's situation hardly looks too encouraging at the moment. That's reflected by its Shanghai-listed stock, which is down about 17% from its 2022 IPO price. Analog chipmakers, which are lower tech than their digital chip cousins, are generally quite lowly valued at the moment as they struggle with stiff competition.
China-based&nbsp;BaTeLab&nbsp;(2149.HK) trades at a price-to-sales (P/S) ratio of 4.6, following a 73% gain in its stock since its December 2023 IPO. Global leader&nbsp;Analog Devices&nbsp;(ADI.US) trades at a premium P/S of 10.4, while the smaller&nbsp;Skyworks&nbsp;(SWKS.US) trades at just 2.46. A multiple closer to BaTeLab's would value Novosense at about 9 billion yuan ($1.23 billion), or just a third of the 27 multiple for the company's Shanghai-listed stock.
<h4 class="wp-block-heading">Eroding margins</h4>
While it's possible Novosense could get a higher valuation from Hong Kong investors who want to buy into China's chip sector, there really isn't too much to get excited about with this company. Its revenue fell 22% year-on-year to 1.31 billion yuan in 2023 from 1.67 billion yuan in 2022 amid fierce competition that forced companies to lower their prices. The figure then rebounded strongly last year, rising 50% to nearly 2 billion yuan. But most or all of that jump appears related to Novosense's acquisition of a company called MagnTek last year.
Meantime, the company's cost of sales – the amount of money required to make each of its chips – has continued to rise as a proportion of its revenue, growing from 51.5% of revenue in 2022 to 72% last year. That's put a big squeeze on the company's gross margin, which plunged from 48.5% last year to just 28% in 2024.
"In recent years, intensified price competition from leading international companies has created challenges for the business of Chinese companies, requiring them to adjust pricing and impacting their profitability," the company said.
As its margins got squeezed, the company sank into the red in 2023, and became cashflow-negative last year. It reported a net loss of 403 million yuan in 2024, widening from a 305 million yuan net loss the previous year. As the losses mounted and its cashflow became more negative, its cash fell from 1.75 billion yuan at the end of 2023 to just 1 billion yuan at the end of last year.
That's not to say that everything about this company is headed in the wrong direction. Novosense does look like a relatively balanced company in terms of product mix, and also has a relatively diverse customer base. The company makes chips for three main groups, namely customers from the automotive, energy and automation and consumer electronics sectors. The energy and automation segment previously accounted for about 70% of its revenue in 2022, but is now down to 50%. Meantime, automotive chips have grown from 23% of its revenue pie to 37% over that period, while consumer electronics chips have risen from 7.6% to 13.5%.
The company's customer base has also become more diverse, with its five largest customers supplying 36.9% of its revenue last year, down from 43.8% in 2022, though at least part of that improvement owes to the MagnTek acquisition. Novosense also points out that it's the largest Chinese company in China's market for automotive analog chip, and the market's second-largest player overall.
At the end of the day, Novosense doesn't look too exciting due to its status in a highly competitive space that's currently in a state of oversupply. Tariffs on rival U.S. chips could provide some relief, though that's likely to be temporary. And due to the low-tech nature of its chips, plus its relative maturity, the company is unlikely to get much extra state support as China spends heavily to build up the more cutting-edge portion of its chip sector.

Novosense Eyes Hong Kong IPO As Competition Chips Away At Its Cash

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Chiuso	-
Volume / Media	7.00 / 65.56K
Intervallo giornaliero	- - -
Intervallo a 52 settimane	16.26 - 20.58
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Exchange	NYSE
RSI	0
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