Hua Hong Semiconductor Ltd (HHUSF) Q2 2024 Earnings Call Highlights: Navigating Challenges with ...

In This Article:

  • Revenue: $478.5 million in Q2 2024, compared to $631.4 million in Q2 2023 and $460 million in Q1 2024.

  • Gross Margin: 10.5% in Q2 2024, compared to 27.7% in Q2 2023 and 6.4% in Q1 2024.

  • Operating Expenses: $90.3 million in Q2 2024, a 7.8% increase over Q2 2023 and a 15% increase over Q1 2024.

  • Other Income Net: $6.9 million in Q2 2024, compared to a net loss of $54.7 million in Q2 2023.

  • Income Tax Expenses: $8.4 million in Q2 2024, 76.7% lower than Q2 2023.

  • Loss for the Period: $41.7 million in Q2 2024, compared to a profit of $7.8 million in Q2 2023 and a loss of $25.3 million in Q1 2024.

  • Net Profit Attributable to Shareholders: $6.7 million in Q2 2024, compared to $78.5 million in Q2 2023 and $31.8 million in Q1 2024.

  • Basic Earnings Per Share: $0.004 in Q2 2024, compared to $0.060 in Q2 2023 and $0.019 in Q1 2024.

  • Annualized ROE: 0.4% in Q2 2024, compared to 10% in Q2 2023 and 2% in Q1 2024.

  • Net Cash Flows from Operating Activities: $96.9 million in Q2 2024, a 39.9% decrease compared to Q2 2023.

  • Capital Expenditures: $196.8 million in Q2 2024.

  • Cash and Cash Equivalents: $6,423.9 million on June 30, 2024.

  • Total Assets: $12,104.8 million on June 30, 2024.

  • Total Liabilities: $3,059.9 million on June 30, 2024.

  • Debt Ratio: 25.3% on June 30, 2024.

Release Date: August 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Hua Hong Semiconductor Ltd (HHUSF) reported sales revenue of USD 478.5 million for Q2 2024, in line with guidance and showing sequential growth.

  • Gross margin improved to 10.5% in Q2 2024, up from 6.4% in Q1 2024, driven by increased capacity utilization.

  • The company is progressing rapidly with the construction of its second 12-inch production line, expected to end trial production by the end of the year, which will expand capacity.

  • Revenue from logic and RF increased by 11% over Q2 2023, driven by increased demand for CIS and logic products.

  • Hua Hong Semiconductor Ltd (HHUSF) expects revenue for Q3 2024 to be approximately $500 million to $520 million, with a gross margin range of 10% to 12%.

Negative Points

  • Revenue decreased from $631.4 million in Q2 2023 to $478.5 million in Q2 2024, primarily due to decreased average selling prices.

  • Gross margin dropped significantly from 27.7% in Q2 2023 to 10.5% in Q2 2024, largely due to decreased average selling prices.

  • Operating expenses increased by 7.8% over Q2 2023, primarily due to increased expenses for new fab Hua Hong Manufacturing and engineering wafer costs.

  • The company reported a loss of $41.7 million for Q2 2024, compared to a profit of $7.8 million in Q2 2023.

  • Revenue from several regions, including Europe and Japan, saw significant declines compared to Q2 2023, with Europe down 57% and Japan down 89.7%.