SUPCON Technology (688777) Q2 2024 earnings summary

Executive summary

• Achieved revenue of ¥4.25 billion in H1 2024, up 16.78% year-over-year; net profit attributable to shareholders was ¥516.63 million, up 1.16% year-over-year, with adjusted net profit (excluding GDR forex loss) up 49.80% year-over-year.

• R&D investment increased 9.29% to ¥444 million, representing 10.45% of revenue.

• International business revenue surged 188.22% year-over-year, now 8.11% of total revenue.

• Major product launches included the UCS universal control system and TPT industrial AI model.

Financial highlights

• Operating cash flow improved to -¥419.93 million, a 57.30% increase year-over-year.

• Gross margin and expense ratios optimized, with management and sales expense ratios down 1.12 and 1.20 percentage points, respectively.

• Total assets at period end were ¥17.41 billion, down 2.61% from year-end 2023.

• R&D capitalization ratio remained stable; no significant changes in capitalized R&D.

Outlook and guidance

• Expects continued growth in automation, software, and instrumentation, driven by industrial upgrades and AI adoption.

• Will accelerate international expansion and digital transformation, focusing on AI+data core capabilities.

• No interim dividend or capital increase from reserves proposed for H1 2024.