Shanghai Fudan Microelectronics Group Company (1385) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 was RMB1.794 billion, nearly flat year-over-year, with a 0.12% decrease compared to H1 2023.

• Net profit attributable to shareholders was RMB348 million, down 22.52% year-over-year; net profit after non-recurring items was RMB309 million, down 25.58%.

• Gross profit margin declined to 56.49%, a drop of 10.61 percentage points year-over-year, mainly due to lower selling prices and product restructuring.

• Cash flow from operating activities turned positive at RMB127 million, compared to negative RMB1.09 billion in H1 2023, due to reduced cash outflows for inventory.

• Total assets increased 3.03% to RMB8.67 billion; net assets attributable to shareholders rose 5.59% to RMB5.60 billion.

Financial highlights

• Basic and diluted EPS were RMB0.42, down from RMB0.55 in H1 2023.

• Weighted average ROE was 6.34%, down from 9.39% in H1 2023.

• R&D investment was RMB598 million, representing 33.31% of revenue, up from 32.74% last year.

• Cost of sales increased 32.11% year-over-year, reflecting higher sales volume.

• Finance expenses rose due to increased bank loans and foreign exchange losses.

Outlook and guidance

• The semiconductor industry is showing early signs of recovery, with global market forecasts revised upward.

• The company expects continued competitive pressure and will focus on cost control, efficiency, and market expansion.

• No interim dividend is recommended for H1 2024.