Empyrean Technology (301269) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached ¥443.79 million, up 9.62% year-over-year, with net profit attributable to shareholders at ¥37.87 million, down 54.81% year-over-year.

• The company remains the leading domestic EDA software provider, serving over 600 clients globally and maintaining a high R&D investment ratio of 78.7% of revenue.

• Product innovation and expansion in full-process EDA tools, especially in analog, storage, RF, and advanced packaging, drove market position.

• No interim dividend, bonus shares, or capital increase from reserves planned for the half-year.

Financial highlights

• Operating income: ¥443.79 million, up 9.62% year-over-year; net profit: ¥37.87 million, down 54.81% year-over-year.

• Operating cash flow: -¥5.56 million, a significant decrease from ¥187.55 million in H1 2023.

• Gross margin for integrated circuit industry segment: 91.39%; EDA software sales margin: 100%; technical services margin: 36.07%.

• Non-recurring gains (mainly government subsidies and asset disposals): ¥89.12 million.

• R&D expenses: ¥349.24 million, up 11.3% year-over-year, representing 78.7% of revenue.

Outlook and guidance

• The company will continue to invest heavily in R&D, focusing on full-process EDA tool innovation and expanding product lines to address market and technology gaps.

• Ongoing projects funded by IPO proceeds are progressing, with some project completion dates extended to late 2024 and 2025 to ensure product quality and market fit.

• The company aims to further enhance its domestic and international market share and support the domestic semiconductor ecosystem.