DB HiTek CO (000990) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached W299BN, up 14% sequentially but down 3% year-over-year, with operating profit at W68BN, up 66% QoQ but down 24% YoY.

• Revenue for H1 2024 was ₩559.9 billion, down from ₩1,154.2 billion in H1 2023, reflecting a challenging market environment.

• Operating income for H1 2024 was ₩108.5 billion, a significant decrease from ₩265.4 billion year-over-year.

• Net income attributable to shareholders was ₩108.0 billion, compared to ₩264.1 billion in the prior year period.

• Sales to China rebounded due to restocking demand, especially in automotive, industrial, and IT sectors.

Financial highlights

• Gross profit was W115.8BN, up 36% QoQ but down 12% YoY; gross margin improved to 39%.

• Gross margin for H1 2024 was 35.8%, slightly lower than 37.7% in H1 2023.

• EBITDA reached W102.4BN, up 31% QoQ but down 9% YoY; EBITDA margin rose to 34%.

• Net profit was W64.5BN, up 47% QoQ but down 20% YoY; net profit margin increased to 22%.

• EPS for H1 2024 was ₩2,588, down from ₩6,241 in H1 2023.

Outlook and guidance

• Utilization expected to recover to 80% for the remainder of 2024 and rise to 95% in 2H 2025.

• Focus on increasing sales of new and value-added products to offset price reductions.

• GaN power semiconductor development to complete in 2024, with mass production targeted for H2 2025.

• The company expects continued pressure on foundry pricing and demand in the second half of 2024.

• Strategic focus remains on high-value analog and power semiconductors, with expansion into SiC, GaN, and new business lines.