WIN Semiconductors (3105) Q2 2024 earnings summary

Executive summary

• Q2 2024 consolidated revenue reached TWD 4.96 billion, up 12% quarter-on-quarter and 26% year-on-year, driven by higher utilization and improved product mix.

• Net profit attributable to the parent company was TWD 485 million, with EPS of TWD 1.14, both increasing from Q1 2024.

• For H1 2024, revenue was TWD 9.40 billion, up 38% year-on-year, and the company returned to profitability with net income of TWD 892 million.

• Gross margin improved to 27.2% in Q2, up from 22.4% in Q1, despite a 3.1 percentage point negative impact from a subsidiary's share price decline.

• The company completed early redemption of all outstanding overseas convertible bonds, strengthening its capital structure.

Financial highlights

• Q2 gross profit was TWD 1,352 million, up 36% quarter-on-quarter and 71% year-on-year.

• Operating income for Q2 was TWD 501 million, up 173% quarter-on-quarter; operating margin rose to 10.1%.

• Net income for Q2 was TWD 393 million, with a net margin of 7.9%.

• H1 2024 net revenue was TWD 9,404 million, up 38% year-on-year; gross margin for H1 was 24.9%.

• Basic EPS for H1 2024 was TWD 2.10, versus a loss in H1 2023.

Outlook and guidance

• Q3 2024 revenue is expected to decline by high single digits quarter-on-quarter, with gross margin guided to the mid-20% range.

• Full-year 2024 revenue is still expected to increase over 2023.

• Management expects continued growth in the foundry segment, supported by robust demand in Asia and the Americas.

• Chinese Android customer demand to slow temporarily in Q3, while iOS inventory build remains strong.