21st Century Business Herald reporter Ou Xue reported from Shenzhen

On the evening of October 30, BIWIN Storage (688525. SH) disclosed its third quarter 2024 report.

According to the data, the company achieved revenue of 5.025 billion yuan in the first three quarters, a year-on-year increase of 136.76%; net profit was 228 million yuan, a year-on-year increase of 147.13%.

From the third quarter alone, BIWIN Storage is still in a state of loss, and its performance has also declined quarter-on-quarter, but the loss has narrowed significantly compared with the same period last year.

In the third quarter, the company achieved operating income of 1.584 billion yuan, a year-on-year increase of 62.64% and a quarter-on-quarter decrease of 7.57%; The net loss was 55.2444 million yuan, a year-on-year increase of 70.54%, and a month-on-month loss.

As of the close of trading on October 31, BIWIN Storage closed at 62.53 yuan per share, down 0.62%, with a market value of 26.965 billion yuan.

The recovery of the storage industry has led to a rebound in product volume and price

BIWIN Storage mainly focuses on embedded storage, consumer-grade storage, industrial-grade storage and advanced packaging and testing services, and meets the market's expectations for "localization of memory chips".

In 2023, BIWIN Storage will increase revenue but not increase profits, especially the sharp decline in net profit and loss of 624 million yuan, far exceeding the total profit of 234 million yuan from 2019 to 2022.

In the first three quarters of this year, BIWIN Storage said that due to the recovery of the storage industry, the company's business has grown significantly, product sales have increased significantly year-on-year, and product prices have also rebounded year-on-year.

It is worth noting that the company's comprehensive gross profit margin in the first three quarters increased by 25.99 percentage points year-on-year.

At the same time, the company's cash flow has also improved to some extent. In the first three quarters, the company's net cash flow from operating activities was 495 million yuan, a year-on-year increase of 127.09%, mainly due to the company's vigorous development of domestic and foreign first-line customers, and the significant increase in sales volume and sales.

As for the reason for the loss recorded in the third quarter, BIWIN Storage said that the share-based payment expenses in the first three quarters of this year were 297 million yuan, and the net profit attributable to the parent company in the first three quarters after excluding share-based payment expenses was 525 million yuan, a year-on-year increase of 208.44%.

Among them, the share-based payment expenses in the third quarter were 99.348 million yuan, and the net profit attributable to the parent company in the third quarter after excluding share-based payment expenses was 44.1035 million yuan, and 115.8 million yuan in the second quarter of this year.

In addition, BIWIN Storage said on the investor interactive platform that since the third quarter of 2024, the price of storage products has fallen. The industry's inventory is mainly in the middle and downstream links, and downstream customers have slowed down the pace of delivery in the third quarter, and are controlling and digesting the inventory level.

Remain optimistic about the mobile phone storage business next year

BIWIN Storage told investors that from the perspective of downstream demand, the market demand in the fourth quarter has recovered compared with the third quarter, and the main driving factors are customer inventory digestion and the peak season of traditional consumer electronics.

In addition, there are no major changes in demand in the first quarter of next year, and it is necessary to further observe the iteration of AI products from leading manufacturers such as Apple, OPPO, Xiaomi, VIVO, and Honor. On the other hand, we should look at the structural opportunities of storage, such as new products such as PCIeGen5, DDR5, LPDDR5, QLC, and the substitution trend of new technologies.

"Next year, the company will further expand other head customers in the mobile phone business, and improve the penetration rate of existing customers, and the company remains optimistic about the mobile phone storage business next year." BIWIN Storage replied on the investor interactive platform that with the wide application of AI large models, in order to maximize the capabilities of end-side AI, many mobile phone manufacturers have begun to adjust the storage configuration of their flagship products, and the company is expected to benefit from the development of AI mobile phones.

The reporter learned that at present, in terms of products, the company has launched embedded storage products such as UFS3.1, LPDDR5/5X, and uMCP for AI mobile phones, and has laid out large-capacity LPDDR products such as 12GB and 16GB.

In addition, BIWIN Storage said that in the future, the company will continue to expand the category of automotive storage, increase market share, and strive to become a major player.

At present, the company has launched automotive-grade eMMC, LPDDR, NORFlash and other products to meet the different needs and scenarios of automotive-grade customers, and the company's Huizhou packaging and testing manufacturing center Guangdong Tailai Technology has passed the IATF16949 automotive industry quality management system certification.

The reporter learned that in the past October 9, BIWIN Storage plans to raise 1.9 billion yuan of private placement projects have been accepted by the exchange, and the fixed increase funds will be mainly used for Huizhou BIWIN's advanced packaging and testing and memory manufacturing base expansion construction project, wafer-level advanced packaging and testing manufacturing project construction, respectively, to invest 880 million yuan, 1.02 billion yuan to raise funds.

BIWIN Storage's latest reply to investors said that the company's wafer-level advanced packaging and testing manufacturing project is in the construction stage and is expected to be put into production in 2025.