Primax Electronics (4915) Q1 2024 earnings summary

Executive summary

• Q1 2024 revenue was NT$13.649 billion, down 7% year-over-year, but exceeded expectations due to rush orders in gaming and AIoT contributions.

• Gross margin improved to 15.9%-16%, up 1 percentage point year-over-year, driven by product mix optimization and higher-margin products.

• EPS for Q1 was NT$1.28, a record high for the first quarter.

• Net profit rose 5-5.6% year-over-year to NT$581.4-605 million, with net margin at 4-4.4%.

• Cash position increased to over NT$13 billion, up 83% year-over-year, supporting business resilience.

Financial highlights

• Gross margin was 15.9%-16%, up from 14.9%-15% year-over-year; operating profit margin was 4-4.3%.

• Operating income reached NT$587 million, up 2.7-3% year-over-year.

• Operating cash flow for Q1 was NT$559 million, up NT$180 million year-over-year.

• Inventory declined to NT$7.7 billion, down 10.3% year-over-year.

• Cash conversion cycle improved to 44 days from 56 days year-over-year.

Outlook and guidance

• Q2 2024 revenue expected to decline by high single digits year-over-year, but gross and operating margins are projected to improve sequentially.

• 2H24 revenue anticipated to pick up with new project contributions.

• Information products to benefit from new AI PC copilot keyboard shipments.

• Auto AIoT product line expected to achieve double-digit growth, while smart lifestyle is projected to decline by high double digits year-over-year.

• The group is evaluating the impact of IFRS 18, effective January 1, 2027, on income statement presentation.