Piotech (688072) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached RMB 1.01 billion, up 44.67% year-over-year, with nine-month revenue at RMB 2.28 billion, up 33.79%.

• Net profit attributable to shareholders for Q3 was RMB 142.19 million, down 2.91% year-over-year; nine-month net profit was RMB 271.28 million, up 0.10%.

• Excluding non-recurring items, Q3 net profit dropped 58.79% year-over-year; nine-month adjusted net profit fell 62.72%.

• Strong R&D investment drove new product and process breakthroughs, with significant expansion in mass production of advanced CVD equipment.

Financial highlights

• Gross margin for the first three quarters was 43.59%, down 6.75 percentage points year-over-year due to higher costs from new product validation.

• R&D expenses for the first nine months were RMB 480.53 million, up 35.73% year-over-year, representing 21.10% of revenue.

• Operating cash flow for the first nine months was negative RMB 999.02 million, improving from negative RMB 1.36 billion a year ago.

• Total assets at Q3-end were RMB 13.17 billion, up 32.06% from year-end 2023, mainly due to inventory growth.

• Basic and diluted EPS for the first nine months were RMB 0.98 and RMB 0.97, respectively.

Outlook and guidance

• Revenue growth expected to continue, driven by new product platforms (PF-300M, PF-300T Plus) and process equipment adoption.

• Gross margin may remain under pressure as new products undergo customer validation and ramp-up.