Lite-On Technology (2301) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales reached NT$33.3 billion, up 16% QOQ, with all major segments—optoelectronics, cloud and AIoT, and ITC—showing growth; H1 2024 sales were NT$62.1 billion, down 13% YOY due to consumer market corrections and strategic product eliminations.

• Q2 net profit was NT$3.1 billion, EPS NT$1.36, up 30% QOQ; H1 net profit was NT$5.52 billion, EPS NT$2.40, both down 16% YOY.

• The company completed its lean focus strategy in Q2, shifting to a growth-oriented approach emphasizing high-value, high-margin businesses and system integration.

• Board approved a Q2 cash dividend of NT$2 per share.

• The company lost control over SKYLA CORPORATION in May 2024, reclassifying it as an associate.

Financial highlights

• Q2 gross profit was NT$7.4 billion (GP rate 22.2%), up 26% QOQ; operating profit NT$3.3 billion (OP rate 9.9%), up 47% QOQ.

• H1 gross profit was NT$13.2 billion (GP rate 21.3%), operating profit NT$5.5 billion (OP rate 8.9%), net profit to parent NT$5.5 billion, EPS NT$2.4.

• OPEX in H1 was NT$7.7 billion, down 10% YOY; R&D accounted for 5.8% of sales in H1 and 5.5% in Q2.

• Net cash generated from operating activities was NT$749.9 million for H1 2024.

• Cash and cash equivalents at June 30, 2024 were NT$96.7 billion.

Outlook and guidance

• Q3 and H2 expected to see continued QOQ and YOY growth in all major segments, with cloud business projected for double-digit YOY growth.

• Liquid cooling solutions for AI servers to begin mass production and shipments in H2, with revenue contribution expected to reach nearly 10% of cloud business next year.

• Core businesses anticipated to return to positive YOY growth in H2, though full-year revenue growth remains challenging due to H1 decline.

• Strategic investment in COSEL (19.99% stake) completed in July 2024 to create synergies in product design, supply chain, and market expansion.

• The company withdrew its application to issue NT$10 billion in convertible bonds due to market conditions.