Suzhou Novosense Microelectronics (688052) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue rose 17.30% YoY to RMB848.87m, supported by auto-electronics shipments and recovering consumer electronics demand; Q2 revenue increased 34.18% QoQ to RMB486.39m.

• Net loss attributable to shareholders was RMB265.25m; excluding RMB147.31m of share-based payment expense, net loss attributable to parent owners was RMB117.94m.

• Q2 net loss narrowed to RMB115.22m; operating cash flow turned positive at RMB8.40m, versus an outflow of RMB260.17m in H1 2023.

Financial highlights

• Operating revenue was RMB848.87m, up 17.30% YoY; operating costs rose 35.62% to RMB561.07m.

• Operating expenses: selling RMB85.47m, up 57.88%; administration RMB138.20m, up 22.70%; R&D RMB319.22m, down 4.59% reported.

• Adjusted for share-based payment expense, H1 R&D investment was RMB216.42m, up 25.86% YoY; reported R&D was 37.61% of revenue.

• Net loss attributable to shareholders was RMB265.25m, versus RMB131.60m in H1 2023; adjusted for share-based payment expense, loss attributable to parent owners was RMB117.94m.

• Adjusted for share-based payment expense, loss excluding non-recurring items was RMB139.05m; reported loss excluding non-recurring items was RMB286.36m.

Outlook and guidance

• H1 auto-electronics shipment volume reached 133m units; qualified products are entering mass production and new programs were selected in smart cockpit, vehicle-domain control and smart lighting.

• Automotive main-drive functional-safety gate drivers were in testing with multiple automakers and Tier 1 suppliers; high-side switches and OBC flyback products were ramping in production.

• Industry outlook cited WSTS global semiconductor market growth of 16.0% for 2024 and 12.5% for 2025; China industrial automation was forecast to grow 1%-3% YoY in 2024.

• Solar inverter shipments were expected to exceed 200GW in 2024, while solar and storage demand remained in inventory digestion and recovery; AI phones were forecast to reach 15% penetration in 2024.