Primax Electronics (4915) Q2 2024 earnings summary

Executive summary

• 2Q24 gross margin reached a record high of 17.3%, driven by favorable product mix and currency exchange rates.

• EPS for 2Q24 hit NT$1.60, a quarterly record, up 25% QoQ and 3.2% YoY, supported by strong AloT and PC/gaming demand.

• Operating margin improved to 5.2%, up 0.9ppt QoQ and 0.2ppt YoY.

• Consolidated revenue for the six months ended June 30, 2024 was NT$29,016,786 thousand, down from NT$30,742,427 thousand year-over-year.

• Net profit for the six months ended June 30, 2024 was NT$1,398,279 thousand, up from NT$1,342,530 thousand year-over-year.

Financial highlights

• Revenue for 2Q24 was NT$15,368mn, up 12.6% QoQ but down 4.3% YoY.

• Gross profit margin for the six months ended June 30, 2024 was 17%, up from 15% year-over-year.

• Net income reached NT$793mn, up 30.9% QoQ and 3.1% YoY.

• Cash and cash equivalents as of June 30, 2024 were NT$13,307,861 thousand, up from NT$10,922,723 thousand as of June 30, 2023.

• Inventory decreased to NT$7.69bn, down 5% YoY; cash conversion cycle improved to 44 days from 53 days YoY.

Outlook and guidance

• 3Q24 revenue expected to see mild QoQ increase, with continued product mix optimization and expansion into high value-added products.

• Gross margin YoY improvement anticipated; opex ratio to rise slightly YoY due to R&D investment.

• PC/gaming expected to remain flattish YoY; Smart Lifestyle to recover QoQ but still decline YoY.

• Auto/AloT segment to sustain growth with new project launches and higher-margin products.

• The Group adopted new IFRS amendments in 2024 with no significant impact and is evaluating the effect of IFRS 18, effective January 1, 2027.