Luxshare Precision Reports 2024 Interim Results and Q3 Earnings Forecast: Half-Year Revenue Exceeding RMB100 Billion
- Written by Telegraph Magazine
HONG KONG SAR - Media OutReach Newswire - 4 September 2024 - Luxshare Precision (002475.SZ) announced its 2024 interim results and 2024 Q3 forecast on August 23. In the first half of 2024, the company achieved a revenue of RMB103.60 billion, marking a year-on-year increase of 5.74%.
Net profit attributable to ordinary shareholders of the company reached RMB5.40 billion, a significant rise of 23.89%, with basic earnings per share at RMB0.75, up by 22.95%. Luxshare Precision's profitability improved steadily, with a gross margin of 11.71%, up 1.07% from the first half of 2023, and a slight increase in net profit margin to 5.56%.
Expanding Business Dimensions: Diversified Strategies Driving High-Quality Growth
Luxshare Precision 's strategic diversification in consumer electronics, automotive, and communication and data center sectors has fueled high-quality growth. In the first half of 2024, the company strengthened its consumer electronics business while also demonstrating robust growth in automotive, and communication and data center.
In its core consumer electronics segment, Luxshare Precision reported steady performance with a revenue of RMB85.55 billion, a year-on-year increase of 3.25%. The gross margin improved to 10.49%, up by 0.98% compared to 2023 1H. The company is expanding its client base and product development, actively participating in smartphone, smart wearable, and VR/AR glass supply chains of major clients including Apple, gaining significant recognition in acoustic products and smart devices.
According to market information, iPhone 16 models could be launched as early as September 10. Industry insiders believe that among Apple's existing phones, only the iPhone 15 Pro series supports Apple's AI, and the release of the iPhone 16 is expected to drive a wave of upgrades. As a key supplier in the iPhone supply chain, Luxshare Precision is likely to benefit from this upgrade cycle. Analyst Ming-Chi Kuo stated that Luxshare Precision has successfully secured the New Product Introduction (NPI) for the highest-end iPhone 16 model (Pro Max) for 2024, further increasing its value per unit.
According to the market research by Canalys, the global wearable brand market is projected to grow by 10% in 2024, with smartwatch shipments expected to increase by 17%. As demand for the Apple Watch rises, Luxshare Precision, as a major supplier, is poised to benefit from this trend. Since joining the AirPods supply chain in 2017, the company has significantly enhanced production efficiency and yield rates through smarter, automated processes, driving revenue growth. China International Capital Corporation (CICC) states that Luxshare Precision's JDM, ODM, and OEM capabilities are key factors in its ongoing success in the expanding AI smartphone and wearable device markets.
In the VR/AR sector, Luxshare Precision has made strategic advances in both components and complete system assembly. In June 2024, Apple Vision Pro was officially launched in multiple regions around the world. As a major supplier, Luxshare Precision played a crucial role in the production and supply chain integration of the Vision Pro, which has further accelerated the company's growth in the high-end smart device market.
In the automotive business, Luxshare Precision achieved revenues of RMB4.76 billion in the first half of 2024, representing a year-on-year increase of 48.3%. The company has developed a diverse product matrix covering automotive wiring harnesses, intelligent cabins, and intelligent driving, serving OEMs globally, which has driven growth in its automotive parts business. According to the research report by China Merchants Securities, Luxshare Precision's expansion of clients and capacity in automotive wiring harness and connector is progressing well, with growth rates expected to exceed 50% in 2024. In addition, Luxshare Precision aims to become a Tier 1 leader in global automotive parts within the "three five-year" periods.
Ms. Wang Laichun (Grace Wang), Chairman of Luxshare Precision, said in a conference call after the release of the financial report that the communications business increased by 21.65% year-on-year in the first half of the year and the growth rate will continue to exceed expectations in the next 2-3 years. It is also worth mentioning that in June 2024, Intel invested in a subsidiary of Luxshare Precision, reaching a strategic partnership. Leveraging Intel's technological advantages, Luxshare Precision can better serve global data centers and cloud providers, enhancing competitiveness in telecommunications and data centers.
Looking Ahead: Business Will Achieve Sustainable Growth
Driven by the recovery of the consumer electronics market, expansion in the communication and data center sector, and rapid development in the automotive business, Luxshare Precision is expected to maintain strong growth. The company projected a 20% to 25% increase in net profit attributable to ordinary shareholders of the company for the first three quarters of 2024. Over the past five years, revenue grew from RMB62.52 billion in 2019 to RMB231.91 billion in 2023, with net profit attributable rising from RMB4.71 billion to RMB10.95 billion, achieving compound annual growth rates (CAGR) of 38.78% and 23.46%, respectively.
In addition, Luxshare Precision has been included in the Fortune Global 500 list for two consecutive years, underscoring its global influence and market performance. This recognition not only affirms the company's past achievements but also highlights the synergistic potential of its three major business sectors to drive sustainable development and create greater value in the future.
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