华虹半导体(01347) - 2024 Q2 - 季度业绩

Performance Overview Financial Summary and Guidance The company's Q2 2024 revenue was $478.5 million, a 24.2% YoY decrease and 4.0% QoQ increase, with gross margin at 10.5% and profit attributable to owners of the parent at $6.7 million, while Q3 revenue is projected to be $500-520 million with a 10-12% gross margin Q2 2024 Key Financial Indicators | Metric | 2024 Q2 | 2023 Q2 | 2024 Q1 | | :--- | :--- | :--- | :--- | | Sales Revenue | $478.5 million | $631.4 million | $460.0 million | | Gross Margin | 10.5% | 27.7% | 6.4% | | Profit Attributable to Owners of Parent | $6.7 million | $78.5 million | $31.8 million | | Basic EPS | $0.004 | $0.060 | $0.019 | Q3 2024 Performance Guidance | Metric | Estimated Value | | :--- | :--- | | Sales Revenue | Approximately $500 million to $520 million | | Gross Margin | Approximately 10% to 12% | Management's Address President Tang Junjun noted a slow recovery in the semiconductor market, with Q2 revenue meeting guidance, gross margin exceeding it, and near full capacity utilization, while a second 12-inch production line is on track for trial production by year-end - The semiconductor market is experiencing a slow recovery from its bottom, with stabilization signals appearing in some consumer electronics sectors[7] - The company's Q2 sales revenue reached $478.5 million with a 10.5% gross margin, both achieving QoQ growth, and capacity utilization is near full production[7] - Construction of the second 12-inch production line is progressing well, expected to achieve trial production by year-end, further expanding the company's capacity and process platforms[7] Company Profile HuaHong Semiconductor is a leading specialty process pure-play foundry, employing an "8-inch + 12-inch" dual-drive strategy with three 8-inch fabs in Shanghai and one 12-inch fab in Wuxi, plus a second 12-inch line under construction - The company is positioned as a global leading specialty process pure-play foundry, with a core strategy of “8-inch + 12-inch” and advanced “Specialty IC + Power Discrete”[9] - The company operates three 8-inch wafer fabs in Shanghai Jinqiao and Zhangjiang with a combined monthly capacity of approximately 180,000 wafers, and one 12-inch wafer fab in Wuxi with a monthly capacity of 94,500 wafers, with a second phase under construction[9] Financial and Operational Analysis Operating Performance Summary In Q2 2024, the company's sales revenue was $478.5 million, down 24.2% YoY but up 4.0% QoQ, with gross margin at 10.5% and profit attributable to owners of the parent at $6.7 million, a 91.5% YoY decrease Q2 2024 Operating Performance Summary | Metric (in Thousand USD) | 2024 Q2 | 2023 Q2 | 2024 Q1 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Sales Revenue | 478,524 | 631,381 | 459,986 | (24.2)% | 4.0% | | Gross Profit | 50,063 | 175,056 | 29,632 | (71.4)% | 68.9% | | Gross Margin | 10.5% | 27.7% | 6.4% | (17.2)pp | 4.1pp | | Profit Attributable to Owners of Parent | 6,673 | 78,524 | 31,818 | (91.5)% | (79.0)% | | Basic EPS (USD) | 0.004 | 0.060 | 0.019 | (93.3)% | (78.9)% | | Wafer Shipments (8-inch equivalent thousand wafers) | 1,106 | 1,074 | 1,026 | 3.0% | 7.8% | | Utilization Rate | 97.9% | 102.7% | 91.7% | (4.8)pp | 6.2pp | - The YoY decrease in sales revenue was primarily due to a decline in average selling price, while the QoQ increase was mainly driven by higher wafer shipments[14] - The YoY decline in gross margin was mainly due to a decrease in average selling price, while the QoQ improvement was primarily due to increased capacity utilization[14] Sales Revenue Analysis Total sales revenue for the quarter decreased 24.2% YoY to $478.5 million, with most segments declining except Logic & RF and Analog & Power Management, while China remained the largest market despite a 21.2% YoY revenue drop, and Industrial & Automotive saw the most significant decline By Category 94.7% of this quarter's sales revenue, totaling $453.3 million, came from direct sales of semiconductor wafers, representing a 24.6% YoY decrease Sales Revenue Analysis (By Category) | Category | 2024 Q2 (Thousand USD) | Share | YoY Change | | :--- | :--- | :--- | :--- | | Wafers | 453,345 | 94.7% | (24.6)% | | Others | 25,179 | 5.3% | (17.3)% | | Total | 478,524 | 100.0% | (24.2)% | By Wafer Size 8-inch and 12-inch wafer sales revenue were $245.5 million and $233.0 million respectively, with 8-inch wafer revenue decreasing 32.0% YoY and 12-inch wafer revenue decreasing 13.7% YoY Sales Revenue Analysis (By Wafer Size) | Wafer Size | 2024 Q2 (Thousand USD) | Share | YoY Change | | :--- | :--- | :--- | :--- | | 8-inch Wafers | 245,471 | 51.3% | (32.0)% | | 12-inch Wafers | 233,053 | 48.7% | (13.7)% | | Total | 478,524 | 100.0% | (24.2)% | By Geography China revenue was $385.5 million, accounting for 80.5% of total revenue, a 21.2% YoY decrease, while North America, Asia, Europe, and Japan also saw YoY declines, with Europe and Japan experiencing significant drops of 57.0% and 89.7% respectively Sales Revenue Analysis (By Geography) | Geography | 2024 Q2 (Thousand USD) | Share | YoY Change | | :--- | :--- | :--- | :--- | | China | 385,519 | 80.5% | (21.2)% | | North America | 46,829 | 9.8% | (3.5)% | | Asia | 28,137 | 5.9% | (37.7)% | | Europe | 17,173 | 3.6% | (57.0)% | | Japan | 866 | 0.2% | (89.7)% | | Total | 478,524 | 100.0% | (24.2)% | - Revenue from all major markets decreased YoY, with sales revenue from China declining 21.2% primarily due to lower average selling prices and demand for smart card ICs[19] By Technology Platform Discrete and Embedded Non-Volatile Memory were the largest technology platforms with revenues of $152.4 million and $137.1 million respectively, both experiencing significant YoY declines, while Logic & RF and Analog & Power Management platforms achieved counter-trend growth of 11.0% and 25.7% YoY respectively Sales Revenue Analysis (By Technology Platform) | Technology Platform | 2024 Q2 (Thousand USD) | Share | YoY Change | | :--- | :--- | :--- | :--- | | Discrete | 152,371 | 31.8% | (39.4)% | | Embedded Non-Volatile Memory | 137,126 | 28.7% | (34.2)% | | Analog & Power Management | 101,137 | 21.1% | 25.7% | | Logic & RF | 63,487 | 13.3% | 11.0% | | Stand-alone Non-Volatile Memory | 23,675 | 4.9% | (29.0)% | | Total | 478,524 | 100.0% | (24.2)% | - Analog & Power Management sales revenue increased 25.7% YoY, primarily due to increased demand for other power management products[22] - Logic & RF sales revenue grew 11.0% YoY, mainly driven by increased demand for CIS and logic products[22] By Process Technology Node The 0.35µm and above process technology node remained the largest revenue source, accounting for 38.3% but declining 35.9% YoY, while the 55nm and 65nm nodes were the only ones to achieve YoY growth at 16.1%, driven by increased demand for power management products Sales Revenue Analysis (By Process Technology Node) | Process Technology Node | 2024 Q2 (Thousand USD) | Share | YoY Change | | :--- | :--- | :--- | :--- | | 0.35µm and above | 183,085 | 38.3% | (35.9)% | | 55nm and 65nm | 98,550 | 20.6% | 16.1% | | 90nm and 95nm | 95,285 | 19.9% | (1.4)% | | 0.11µm and 0.13µm | 68,660 | 14.3% | (42.9)% | | Total | 478,524 | 100.0% | (24.2)% | - Sales revenue from the 55nm and 65nm process technology nodes increased 16.1% YoY, primarily due to increased demand for other power management products[24] By End Market Distribution Consumer Electronics was the largest end market, contributing 62.4% of revenue but declining 14.2% YoY, while Industrial & Automotive market revenue saw the most significant drop at 43.3% YoY, and Communication and Computer markets also recorded YoY declines Sales Revenue Analysis (By End Market) | End Market | 2024 Q2 (Thousand USD) | Share | YoY Change | | :--- | :--- | :--- | :--- | | Consumer Electronics | 298,320 | 62.4% | (14.2)% | | Industrial & Automotive | 110,643 | 23.1% | (43.3)% | | Communication | 59,486 | 12.4% | (13.0)% | | Computer | 10,075 | 2.1% | (49.6)% | | Total | 478,524 | 100.0% | (24.2)% | - Industrial & Automotive product sales revenue decreased 43.3% YoY, primarily due to lower average selling prices and demand for IGBTs, MCUs, general-purpose MOSFETs, smart card ICs, and super junction products[27] Capacity and Utilization Rate As of quarter-end, the company's total monthly capacity (8-inch equivalent) was 391,000 wafers, with overall utilization significantly recovering from 91.7% to 97.9%, including 107.6% for 8-inch fabs and 89.3% for 12-inch fabs Capacity and Utilization Rate | Metric | 2024 Q2 | 2024 Q1 | 2023 Q2 | | :--- | :--- | :--- | :--- | | Total Capacity (8-inch equivalent thousand wafers/month) | 391 | 391 | 347 | | Overall Utilization Rate | 97.9% | 91.7% | 102.7% | | Utilization Rate (200mm) | 107.6% | 100.3% | 112.0% | | Utilization Rate (300mm) | 89.3% | 84.2% | 92.9% | - Overall capacity utilization was 97.9%, an increase of 6.2 percentage points QoQ[26] Wafer Shipments Wafer shipments (8-inch equivalent) reached 1.106 million wafers this quarter, increasing 3.0% YoY and 7.8% QoQ, indicating a recovery in market demand Wafer Shipments (8-inch equivalent thousand wafers) | Period | Shipments | | :--- | :--- | | 2024 Q2 | 1,106 | | 2023 Q2 | 1,074 | | 2024 Q1 | 1,026 | Operating Expense Analysis Operating expenses for the quarter were $90.3 million, increasing 17.8% YoY and 15.0% QoQ, primarily due to higher operating costs at the new HuaHong Manufacturing plant, R&D engineering wafer expenses, and increased labor costs - Operating expenses increased 17.8% YoY, primarily due to higher operating costs at the new HuaHong Manufacturing plant and increased R&D engineering wafer expenses[29] - Operating expenses increased 15.0% QoQ, primarily due to higher labor costs[29] Net Other Income/(Loss) This quarter recorded net other income of $6.9 million, a significant turnaround from a net loss of $54.7 million in the prior year, primarily due to a substantial reduction in exchange losses and an increase in interest income - This quarter recorded net other income of $6.9 million, compared to a net loss of $54.7 million in the prior year, primarily due to a reduction in exchange losses from $62.6 million to $7.9 million and an increase in interest income from $14.1 million to $29.8 million[30] Capital Structure and Capital Expenditures As of quarter-end, the company's total assets were $12.10 billion with a debt-to-asset ratio of 25.3%, indicating a stable financial position, and capital expenditures for the quarter totaled $196.8 million, with the largest portion of $128.4 million allocated to HuaHong Manufacturing (Wuxi Phase II) construction Capital Structure Summary | Metric (in Thousand USD) | June 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Total Assets | 12,104,780 | 11,648,010 | | Total Liabilities | 3,059,884 | 2,980,801 | | Debt-to-Asset Ratio | 25.3% | 25.6% | Q2 2024 Capital Expenditures (in Thousand USD) | Item | Amount | | :--- | :--- | | HuaHong Manufacturing | 128,402 | | HuaHong Wuxi | 40,431 | | HuaHong 8-inch | 27,997 | | Total | 196,830 | Cash Flow Analysis Net cash flow from operating activities was $96.9 million this quarter, a 39.9% YoY decrease, while net cash outflow from investing activities was $172.0 million, and net cash inflow from financing activities was $416.1 million, primarily from $492.4 million capital contributions by non-controlling interests Cash Flow Summary (in Thousand USD) | Item | 2024 Q2 | 2023 Q2 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 96,890 | 161,190 | | Net Cash Flow Used in Investing Activities | (171,973) | (150,649) | | Net Cash Flow from/(used in) Financing Activities | 416,148 | (300,183) | - Net cash inflow from financing activities primarily resulted from $492.4 million capital contributions by non-controlling interests[34] Liquidity Analysis As of quarter-end, the company's net working capital was $6.428 billion, with a current ratio of 7.0 and quick ratio of 6.4, indicating ample liquidity, while inventory turnover days slightly increased to 94 days and trade receivables and bills turnover days improved to 55 days Liquidity Ratios | Metric | June 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Net Working Capital (Thousand USD) | 6,428,420 | 6,173,269 | | Current Ratio | 7.0x | 7.4x | | Quick Ratio | 6.4x | 6.7x | | Trade Receivables and Bills Receivable Turnover Days | 55 | 58 | | Inventory Turnover Days | 94 | 92 | - Inventory increased from $431.2 million at the end of last quarter to $462.6 million at the end of this quarter, primarily due to an increase in work-in-progress[36] - Trade receivables and bills receivable decreased from $306.2 million at the end of last quarter to $274.4 million at the end of this quarter, primarily due to improved customer collections[36] Condensed Consolidated Financial Statements Condensed Income Statement This quarter recorded sales revenue of $478.5 million and gross profit of $50.06 million, resulting in a pre-tax loss of $33.38 million and a total loss for the period of $41.75 million, but a profit attributable to owners of the parent of $6.67 million after accounting for non-controlling interests' losses Condensed Income Statement (in Thousand USD) | Item | 2024 Q2 | 2023 Q2 | 2024 Q1 | | :--- | :--- | :--- | :--- | | Sales Revenue | 478,524 | 631,381 | 459,986 | | Gross Profit | 50,063 | 175,056 | 29,632 | | (Loss)/Profit Before Tax | (33,380) | 43,679 | (45,118) | | (Loss)/Profit for the Period | (41,748) | 7,834 | (25,286) | | Profit Attributable to Owners of Parent | 6,673 | 78,524 | 31,818 | Condensed Consolidated Statement of Financial Position As of June 30, 2024, the company's total assets reached $12.10 billion, comprising $4.61 billion in non-current assets and $7.50 billion in current assets (including $6.42 billion in cash and cash equivalents), with total liabilities of $3.06 billion and total equity of $9.04 billion, maintaining a stable balance sheet structure Condensed Consolidated Statement of Financial Position Summary (in Thousand USD) | Item | June 30, 2024 | March 31, 2024 | | :--- | :--- | :--- | | Total Non-Current Assets | 4,605,764 | 4,507,524 | | Total Current Assets | 7,499,016 | 7,140,486 | | Total Assets | 12,104,780 | 11,648,010 | | Total Current Liabilities | 1,070,596 | 967,217 | | Total Non-Current Liabilities | 1,989,288 | 2,013,584 | | Total Liabilities | 3,059,884 | 2,980,801 | | Total Equity | 9,044,896 | 8,667,209 | Condensed Consolidated Cash Flow Statement This quarter generated $96.89 million in net cash from operating activities, with a net outflow of $172.0 million from investing activities primarily for property, plant, and equipment purchases, and a net inflow of $416.1 million from financing activities mainly due to capital injections from non-controlling interests, increasing period-end cash and cash equivalents to $6.424 billion Condensed Consolidated Cash Flow Statement (in Thousand USD) | Item | 2024 Q2 | 2023 Q2 | 2024 Q1 | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 96,890 | 161,190 | 40,660 | | Net Cash Flow Used in Investing Activities | (171,973) | (150,649) | (298,951) | | Net Cash Flow from/(used in) Financing Activities | 416,148 | (300,183) | 789,913 | | Net Increase/(Decrease) in Cash and Cash Equivalents | 341,065 | (289,642) | 531,622 | | Cash and Cash Equivalents at End of Period | 6,423,866 | 1,850,957 | 6,107,986 |