Nan Ya Plastics (1303) Q1 2024 earnings summary

Executive summary

• Market capitalization reached NT$449.7 billion as of April 2024, with 104 plants and 30,392 employees globally.

• Maintains leading market positions in plastics processing, electronic materials, and chemicals.

• Sales are globally diversified, with significant presence in Taiwan, China, and the US.

• Operating revenue for Q1 2024 was NT$58.63 billion, down 10.9% year-over-year, with net income attributable to owners at NT$1.24 billion, a 43% decrease from Q1 2023.

• Gross margin for Q1 2024 was 5.7%, compared to 8% in Q1 2023, reflecting margin compression amid lower sales.

Financial highlights

• 1Q24 EPS rose to NT$0.16, up both year-over-year and quarter-over-quarter, driven by improved chemical markets, higher polyester and plastics demand, investment income, and FX gains.

• 1Q24 consolidated revenue was NT$58.6 billion, down from NT$65.8 billion in 1Q23 and NT$63.0 billion in 4Q23, mainly due to weak PCB performance amid US-China tech tensions.

• 1Q24 pre-tax income was NT$1.23 billion, down YoY due to lower PCB profits but up QoQ on higher equity income.

• Net cash from operating activities was NT$5.08 billion, a significant decrease from NT$10.94 billion in Q1 2023.

• Cash and cash equivalents at quarter-end were NT$80.02 billion.

Outlook and guidance

• 2Q24 expects stable growth in high-frequency copper foils for AI and networking, with rising copper prices and proactive customer inventory builds supporting electronic materials revenue.

• Higher oil prices and full-capacity operations at Ningbo Plant expected to boost chemical product revenues.

• Annual strategy focuses on high-speed communications, AI, new energy vehicles, medical materials, and green technology.

• The company is evaluating the impact of IFRS 18, effective January 2027, which will affect income statement presentation and management performance measures.