Montage Technology Co. (688008) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached RMB 1.665 billion, up 79.49% year-over-year, with net profit attributable to shareholders at RMB 593 million, a 624.63% increase year-over-year.

• Interconnect chip sales were RMB 1.528 billion, up 67.89% year-over-year; server platform sales were RMB 130 million, up 845.69% year-over-year.

• Q2 2024 revenue was RMB 928 million, up 82.59% year-over-year and 25.83% sequentially; net profit was RMB 370 million, up 495% year-over-year and 65.5% sequentially.

• Growth driven by DDR5 chip demand recovery, AI high-performance chip shipments, and new product launches.

Financial highlights

• H1 2024 net profit attributable to shareholders: RMB 593 million, up 624.63% year-over-year.

• Operating cash flow: RMB 820 million, up 460.21% year-over-year.

• Gross margin for interconnect chips in Q2: 63.68%, up 2.75 percentage points sequentially.

• Basic and diluted EPS: RMB 0.52, up 642.86% year-over-year.

• R&D expenses: RMB 367 million, up 21.16% year-over-year, representing 22.03% of revenue.

Outlook and guidance

• DDR5 chip shipments expected to surpass DDR4 in Q3 2024; third-generation DDR5 RCD chips to scale in H2.

• PCIe Retimer, MRCD/MDB, and CKD chips to drive new growth, with strong AI server and PC demand anticipated.

• Continued investment in R&D and product iteration, with new AI chips under development.