Hangzhou Silan Microelectronics (600460) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached ¥5.27 billion, up 17.83% year-over-year; net profit attributable to shareholders was -¥24.92 million, a reduction in loss compared to -¥41.22 million last year.

• Excluding non-recurring items, adjusted net profit was ¥126.20 million, down 22.39% year-over-year.

• Losses mainly stemmed from fair value declines in equity investments (notably Anlu Technology and YN Technology), totaling -¥162.17 million after tax.

• Gross margin declined to 19.95%, down 4.17 percentage points year-over-year, due to intensified competition and price drops in key markets.

• R&D expenses increased 34% year-over-year, reflecting continued investment in new product and process development.

Financial highlights

• Operating income: -¥147.43 million, with a year-over-year increase in loss of ¥87.55 million.

• Total assets at period end: ¥23.23 billion, down 2.85% from year-end 2023.

• Net assets attributable to shareholders: ¥12.01 billion, down 0.13% from year-end 2023.

• Basic and diluted EPS: -¥0.02, improved from -¥0.03 year-over-year.

• Operating cash flow: ¥112.98 million, a significant improvement from -¥265.70 million in H1 2023.

Outlook and guidance

• Focus remains on expanding high-end automotive, new energy, computing, and communications markets, leveraging IDM model and domestic substitution trends.

• Plans to accelerate capacity expansion in SiC, GaN, and MEMS sensor lines, and to launch new automotive-grade and industrial-grade products.

• Continued investment in R&D and process innovation to support growth in high-margin, high-barrier markets.