ENNOSTAR (3714) investor relations material

Executive summary

• Q2 2025 revenue was NT$5.74 billion, up 1.9% sequentially but down 13.1% year-over-year, with losses widening due to NT dollar appreciation and weak demand.

• Net loss attributable to parent company was NT$878 million in Q2 2025, with EPS loss of NT$1.19.

• Value-added applications revenue rose 5% from Q1, but overall demand was weak due to macroeconomic uncertainty and price pressure.

• Consolidated H1 2025 revenue was NT$11,372 million, with a net loss of NT$1,320 million and a qualified audit opinion due to unreviewed subsidiaries.

• The group operates in LED wafers, chips, and modules, with Epistar and Lextar as key subsidiaries.

Financial highlights

• Q2 gross margin was 6.9%, down from 12.2% in Q1 and 15.3% in Q2 2024.

• Operating margin was -14.5% in Q2, with net profit margin at -15.3% and EBITDA margin at 2.6%.

• Inventory turnover improved to 83 days in Q2, with inventory down by NT$600 million quarter-over-quarter.

• Net cash at quarter-end was NT$12.4 billion, with cash at end of Q2 at NT$13.35 billion.

• H1 2025 gross margin was 10%, and cash and cash equivalents at June 30, 2025, were NT$13,351 million.

Outlook and guidance

• Shipments expected to grow into year-end sales peak, but exchange rates and macroeconomic factors will continue to affect revenue.

• Focus on ramping up higher-margin, value-added products and increasing R&D investment for new products.

• Sensing segment Q3 revenue expected to decline single digits Q/Q and Y/Y, but full-year sensing revenue to grow single digits year-over-year.

• Special lighting Q3 revenue to rise double digits Q/Q but decline double digits Y/Y; full-year outlook conservative.

• Micro LED products to begin contributing to revenue in 2025.