Hangzhou First Applied Material (603806) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 was RMB 10.76 billion, up 1.39% year-over-year, with net profit attributable to shareholders at RMB 928 million, up 4.95% year-over-year.

• Photovoltaic encapsulant film sales volume rose 43.61% year-over-year, but price declines offset volume gains; backsheet sales and revenue dropped sharply.

• Electronic materials and aluminum-plastic film segments saw significant sales and revenue growth.

• Cash flow from operations improved by RMB 2.79 billion year-over-year, mainly due to better collections and lower raw material costs.

Financial highlights

• Operating income: RMB 10.76 billion (+1.39% YoY); net profit: RMB 928 million (+4.95% YoY); EPS: RMB 0.36 (+5.88% YoY).

• Gross margin improved due to higher profitability in encapsulant film and dry film products.

• Cash flow from operations: RMB 905 million (vs. -RMB 1.89 billion YoY); total assets: RMB 22.08 billion; net assets: RMB 15.96 billion.

• Non-recurring gains: RMB 29.3 million, mainly from government grants and investment returns.

Outlook and guidance

• The company expects continued industry headwinds, including price pressure and global trade barriers, but aims to maintain global market share through product diversification and overseas capacity expansion.

• Focus remains on R&D, cost control, and expanding electronic materials for new growth.