Powertech Technology (6239) Q2 2024 earnings summary

Executive summary

• 2Q24 revenue reached NT$19.6B, up 13.8% YoY and 6.9% QoQ, with gross margin at 19% and EPS at NT$2.45, all showing significant YoY growth.

• 1H24 revenue totaled NT$37.92B, up 15% YoY, with gross margin at 18% and EPS at NT$4.77, both exceeding expectations.

• Net income for 1H24 was NT$4.42B, up 40% YoY; operating income for 1H24 was NT$4.62B, up 30% YoY.

• The group completed the disposal of 70% of Powertech Technology (Suzhou) Ltd. and ceased operations at Powertech Semiconductor (Xian) Ltd.

Financial highlights

• 2Q24 net income was NT$2.31B, up 33% YoY and 9.8% QoQ; operating income rose 40% YoY to NT$2.58B.

• Gross profit margin improved to 19% in 2Q24 from 16.8% in 2Q23.

• Cash and cash equivalents at June 30, 2024 were NT$18.17B, down from NT$21.08B at year-end 2023.

• Net cash from operating activities for 1H24 was NT$8.83B, up from NT$7.70B YoY.

• Non-operating income in 2Q24 declined 10% YoY and 48.4% QoQ.

Outlook and guidance

• AI, datacenter, and high-end logic/memory chip demand expected to drive growth in 2H24; consumer segment to rebound.

• DRAM and NAND businesses to benefit from rising demand in AI, HPC, and edge computing; logic packaging and new products to expand.

• Tera Probe/TeraPower and Greatek expect 2H24 to outperform 1H24, with new capacity and product launches.

• Management expects the carbon fee threshold to be reached in 2024, but the financial impact is not yet estimable due to pending regulations.

• The company is assessing the impact of new Pillar Two income tax legislation effective April 2024 for certain subsidiaries.