China Electronics Huada Technology Company (85) H1 2024 earnings summary

Executive summary

• H1 2024 revenue fell 24.7% YoY to HK$1,360.6m; profit attributable to owners declined 44.0% to HK$309.5m, reflecting lower sales volumes and selling prices.

• Basic EPS was HK15.25 cents, versus HK27.24 cents in H1 2023.

Financial highlights

• Revenue was HK$1,360.6m versus HK$1,807.0m; gross profit was HK$567.4m versus HK$840.7m.

• Operating profit was HK$354.6m versus HK$636.6m; profit before tax was HK$343.0m versus HK$624.7m.

• Net profit was HK$308.8m versus HK$551.4m; profit attributable to owners was HK$309.5m versus HK$552.9m.

• Net operating cash flow was HK$146.0m versus HK$387.5m; cash and cash equivalents ended at HK$1,375.3m.

Outlook and guidance

• Global smart-card demand is expected to remain in a downcycle; domestic IC competition and downward product-price pressure are expected to intensify.

• Secure-element chip growth has slowed amid weak macro conditions, but rising device-security needs are expected to broaden applications and create market opportunities.

• Priorities include monitoring domestic demand, pursuing potential customers and reinforcing the market position in smart cards and secure-element chips.