Hubei Dinglong’s profits surge amid tech expansion
August 21, 2024
Hubei Dinglong posts strong H1 results driven by semiconductor growth and cost efficiencies.
Hubei Dinglong Holdings, a leading global player in the printer consumables market, reported a significant profit surge for the first half of 2024, fuelled by continued strength in its core printing and copier segment and expanding semiconductor business.
The company’s net profit rose 127.22% year-on-year to 217.84 million CNY (€27.6 million/ $29.9 million), while revenue climbed 31.01% to 1.52 billion CNY (€193 million/ $208 million). This robust growth was supported by a 106.56% increase in sales from its semiconductor materials and chips division, which now accounts for 42% of total revenue.
The company attributed the solid performance to Hubei Dinglong’s dual focus on sustaining leadership in the printer business while aggressively expanding into the semiconductor sector. The company has been ramping up R&D investment, with a 25.21% increase in expenditure to 219.05 million CNY (€27.8 million/ $30.1 million), aiming to solidify its position in the high-tech materials market.
In its traditional printing and copier segment, Hubei Dinglong achieved a 4.05% revenue increase to 867.03 million CNY (€110 million/ $119 million). Despite intense competition in the consumables market, the company improved its gross margin by 4.24% to 29.29%, thanks to operational efficiencies and strategic cost management. This segment remains a cornerstone of Hubei Dinglong’s business, underpinned by its extensive product range and global market reach. However, the modest growth of 4.05% may indicate potential market saturation or increased competition. The company has also significantly increased R&D spending, now at 219.05 million CNY (€27.8 million/ $30.1 million), which carries the inherent risk of delayed returns, particularly in the highly competitive semiconductor sector.
In the first half of 2024, Hubei Dinglong Holdings made strategic acquisitions to bolster its semiconductor and advanced materials sectors. The company increased its stake in Dinglong Microelectronics from 72.35% to 91.35% by acquiring a 19% stake for 475 million CNY (€60.2 million/ $65.3 million). Additionally, it raised its ownership in Rouxian Technology to 82% by purchasing a 12% stake for 31.95 million CNY (€4.05 million/ $4.39 million). Hubei Dinglong also invested 102.5 million CNY (€13 million/ $14 million) in its Dinglong (Qianjiang) New Materials subsidiary to advance a KrF/ArF photoresist project, aligning with its strategic focus on high-end semiconductor materials and reducing import dependency.
The company’s net assets attributable to shareholders fell by 6.50%, raising questions about underlying expenses or liabilities impacting overall value. Additionally, financial expenses significantly rose to 6.14 million CNY (€780,000/ $845,000), driven by reduced foreign exchange gains and increased interest costs on bank borrowings. The company also reported a substantial net cash outflow from investment activities, totalling 724.71 million CNY (€92 million/ $100 million), primarily due to acquisitions and capital expenditures.
Hubei Dinglong plans to continue its aggressive push into semiconductor materials while maintaining steady growth in its core printer segment. The company also remains committed to its sustainability goals, emphasising the development of remanufactured consumables.
Categories : City News
Tags : Business China Financials H1 2024 Hubei Dinglong
