Powertech Technology (6239) Q3 2024 earnings summary

Executive summary

• 3Q24 revenue reached NT$18.3B, down 6.6% sequentially and 0.8% year-over-year, with gross margin improving to 21.4% from 19.0% in 2Q24 and 17.8% in 3Q23.

• Net income for 3Q24 was NT$2.15B, down 7.0% sequentially but up 8.0% year-over-year; EPS was NT$2.28, up 8.6% year-over-year.

• Net sales for the nine months ended September 30, 2024, reached NT$56.2B, up 9% year-over-year, with net income rising to NT$6.57B, a 27% increase from the prior year.

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

• Excluding Xi'an, revenue showed a growth trend, meeting expectations.

Financial highlights

• 1-3Q24 revenue grew 9.4% year-over-year to NT$56.2B; gross margin rose to 19.3% from 16.9% in 1-3Q23.

• 1-3Q24 net income increased 27.5% year-over-year to NT$6.57B; EPS was NT$7.05, up 30.3%.

• Operating income for Q3 2024 increased 37% year-over-year to NT$2.77B.

• Cash and cash equivalents at September 30, 2024, were NT$19.36B.

• Total assets stood at NT$107.35B, with equity attributable to shareholders at NT$55.18B.

Outlook and guidance

• AI-related applications expected to drive growth, while demand for PC, smartphone, and consumer products slows; automotive sales below expectations.

• DRAM market demand flat, with growth anticipated from HBM expansion and new packaging technologies for AI servers and PCs.

• NAND growth in consumer applications to remain flat in 4Q24, but enterprise SSD demand strong due to data center expansion.

• Logic product line revenue contribution rising, with higher growth potential than memory packaging.

• The company expects to be subject to carbon fees starting January 2025, with provisions to be recognized based on actual emissions.