Huaqin (603296) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 was RMB 39.40 billion, nearly flat year-over-year, with net profit attributable to shareholders at RMB 1.29 billion, up 0.73% year-over-year. Operating cash flow declined 40.74% year-over-year to RMB 1.04 billion.

• Core business segments include smart terminals, high-performance computing, automotive electronics, and AIoT, with strong growth in wearables, servers, and AIoT products.

• The company maintained a leading position in global ODM for smartphones, notebooks, and tablets, and expanded its presence in AI servers and automotive electronics.

Financial highlights

• Revenue: RMB 39.40 billion, down 0.76% year-over-year.

• Net profit attributable to shareholders: RMB 1.29 billion, up 0.73% year-over-year.

• Net profit excluding non-recurring items: RMB 1.02 billion, up 5.75% year-over-year.

• Operating cash flow: RMB 1.04 billion, down 40.74% year-over-year.

• Total assets: RMB 58.99 billion, up 14.54% from year-end 2023.

• Basic and diluted EPS: RMB 1.2734, down 9.35% year-over-year.

• Gross margin and net margin remained stable; R&D expenses increased due to higher material usage.

Outlook and guidance

• The company expects continued growth in wearables, AIoT, and AI server shipments, with strong demand from global technology clients.

• AI-driven innovation and digital transformation are expected to drive new business opportunities and product upgrades.

• Management remains optimistic about full-year growth in smart wearables and AIoT, and will continue to invest in R&D and global supply chain expansion.