Hubei Dinglong Holdings Co., Ltd. is set to report a significant surge in profitability for the first three quarters of 2024, reflecting the company’s strategic pivot towards high-growth sectors.
The Shenzhen-listed company forecasts a net profit increase of up to 115% year-on-year, with earnings projected between RMB 366.62 million and RMB 378.95 million ($50.2 million to $51.9 million/ €47.4 million to €49.0 million) for the period spanning January to September.
The performance marks a dramatic turnaround from a year ago, driven largely by a booming semiconductor materials segment. The business has rapidly scaled, contributing RMB 1.089 billion ($149.2 million/ €141.0 million) in revenue, an 88% rise compared to the previous year.
Dinglong’s focus on integrated circuit (IC) materials and semiconductor displays, with a combined sales growth of 162% year-on-year, further underscores its ambition to carve a larger slice of the market. The display materials unit posted revenues of RMB 282 million ($38.7 million/ €36.6 million) for the nine months, while newer semiconductor packaging and photolithography ventures have advanced to trial stages with customer validation progressing as expected.
The third quarter saw the company maintaining its growth trajectory, with profits for the three months to September projected to rise between 85% and 100% compared to the previous year. Revenue in the quarter grew sequentially by 10% to RMB 892 million ($122.3 million/ €115.5 million), as sales of high-margin semiconductor materials continued to ramp up.
Meanwhile, Dinglong’s traditional printing consumables business reported steady performance. The segment’s revenue is anticipated at RMB 1.321 billion ($181.1 million/ €171.0 million) for the first three quarters, a modest gain from the prior year. The group has indicated ongoing cost reduction initiatives aimed at bolstering profitability in the face of economic headwinds.
The company acknowledged the impact of external factors such as exchange rate fluctuations and costs associated with employee equity incentives, which trimmed third-quarter profits by RMB 15 million ($2.1 million, €1.9 million). Additionally, non-recurring gains are expected to decline from RMB 46.81 million last year to RMB 28.15 million ($3.9 million, €3.6 million), primarily due to lower government subsidies.
