Yangtze River Business Daily News ● Yangtze River Business Daily reporter Xu Yang

Huafon Measurement & Control, a leading local supplier of semiconductor test equipment in China, (688200.HK) SH) is doing well.

According to the 2024 annual report, in 2024, Huafon Measurement and Control will achieve operating income of 905 million yuan, a year-on-year increase of 31.05%; net profit was 334 million yuan, a year-on-year increase of 32.69%.

In this regard, Huafon Measurement and Control said that it was mainly due to the company's continuous improvement of operational efficiency and the gradual stabilization and recovery of the domestic economy, and the increase in orders.

The Yangtze River Business Daily reporter noted that Huafeng Measurement and Control has been deeply involved in semiconductor testing for more than 30 years, and occupies a favorable position in the process of domestic substitution by virtue of technology accumulation and product advantages.

In recent years, Huafon Measurement & Control has continued to increase R&D investment and continuously improve product competitiveness. In 2024, the company's R&D expenses will be 172 million yuan, a year-on-year increase of 30.60%, and the R&D expense ratio will reach 19.04%.

The construction of customer ecosystem has achieved initial results

According to the data, Huafon Measurement and Control's main business is the research and development, production and sales of semiconductor automated test systems. The products are mainly used for the testing of integrated circuits such as analog, digital-analog hybrid, discrete devices and power modules, and the sales area covers China, the United States, Europe, Japan, South Korea, Southeast Asia and India and other countries and regions with developed global semiconductor industries.

In 2023, due to the superposition of various factors such as the slow recovery of the domestic economy, the slowdown of foreign economic growth and local geopolitical conflicts, the prosperity of the semiconductor industry will decline, and the growth rate of the semiconductor equipment field will continue to slow down, resulting in a year-on-year decrease of 35.47% in the operating income of Huafon Measurement and Control to 691 million yuan, and a year-on-year decrease in net profit of 52.18% to 252 million yuan.

Entering 2024, Huafon Measurement and Control's performance will pick up. According to the annual report disclosed by the company, in 2024, the company will achieve operating income of 905 million yuan, a year-on-year increase of 31.05%; net profit was 334 million yuan, a year-on-year increase of 32.69%.

Judging from the quarterly data, Huafeng Measurement and Control's revenue and net profit in each quarter of 2024 will grow steadily, with operating income of 137 million yuan, 242 million yuan, 242 million yuan, and 284 million yuan respectively, and net profit of 23.4383 million yuan, 89.0518 million yuan, 101 million yuan, and 121 million yuan respectively.

Huafon Measurement and Control said in the annual report that during the reporting period, the company implemented various measures to continuously improve operational efficiency, superimposed the gradual stabilization and recovery of the domestic economy, and achieved growth in operating income and net profit compared with the same period last year. Among them, the company's core product STS8300 performed well, with a significant year-on-year increase in shipments, and the construction of a customer ecosystem has achieved initial results.

At this stage, the domestic market is the main contributor to Huafon Measurement and Control's revenue, and the revenue from overseas markets is relatively low. In 2024, the company's domestic operating income will be 845 million yuan, an increase of 40.99% year-on-year, accounting for 93.37%, and a gross profit margin of 73.10%; The overseas business was slightly under pressure, with an operating income of 55.8322 million yuan, a year-on-year decrease of 36.53%, accounting for 6.17%, but the gross profit margin was as high as 77.70%, 4.6 percentage points higher than the gross profit margin of the domestic business.

In 2024, Huafon Measurement & Control will continue to increase its expansion efforts in overseas markets and accelerate its global strategic layout. In April 2024, a wholly-owned sales and service company in Japan will be officially put into operation; In June, the Malaysian factory (Penang) was officially opened; In July, the U.S. subsidiary officially opened in Silicon Valley, California, USA, and in the same month, the company's first test equipment manufactured at the Penang, Malaysia factory was STS8300 installed at the plant of Unisem, a global semiconductor packaging and testing supplier, in Cestbon, Perak, Malaysia.

It is worth mentioning that Huafon Measurement and Control actively shares the results with investors, and has continued to pay cash dividends since its listing in 2020, with a cumulative cash dividend of 464 million yuan. According to the latest profit distribution plan, the company intends to distribute a cash dividend of 7.50 yuan (tax included) to all shareholders for every 10 shares, with a total cash dividend of 101 million yuan (tax included). If this dividend is implemented, plus the interim dividend of 31.1106 million yuan in 2024, the company's annual dividend amount in 2024 will reach 132 million yuan, accounting for 39.7% of the current net profit.

Issued 1 billion convertible bonds for R&D and expansion

Since its establishment, Huafon Measurement & Control has always focused on the field of semiconductor automated test systems, realized the import substitution of analog and mixed-signal semiconductor automated test systems with self-developed products, and continuously expanded its coverage in the field of gallium nitride, silicon carbide and IGBT and other power discrete devices and power module semiconductor testing.

At present, Huafon Measurement & Control has grown into a leading and world-renowned local supplier of semiconductor test systems in China, and is also one of the few Chinese companies that supplies semiconductor test equipment to well-known chip design companies, wafer factories, IDMs and packaging and testing manufacturers at home and abroad.

On the evening of January 24 this year, Huafon Measurement and Control released a plan for the issuance of convertible bonds, which intends to raise no more than 1 billion yuan. After deducting the issuance costs, it will be used for two projects: one is the R&D and innovation project based on the self-developed ASIC chip test system, with a total investment of 759 million yuan and plans to invest 759 million yuan in raised funds, and the other is the construction project of high-end SoC test system manufacturing center, with a total investment of 254 million yuan and 241 million yuan to be raised.

Huafon Measurement and Control said that the test system required for self-developed ASIC chips and VLSI chips will help enhance the company's market competitiveness and ensure the safety and stability of its industrial chain.

In addition to expanding production, Huafon Measurement & Control continues to increase investment in the field of technological innovation, and makes every effort to promote technological breakthroughs and upgrades, and drive development with innovation. From 2021 to 2024, the company's R&D expenses will be 94.04 million yuan, 118 million yuan, 132 million yuan, and 172 million yuan respectively, an increase of 59.03%, 25.27%, 12.03%, and 30.60% year-on-year, respectively, and the corresponding R&D expense rates will be 10.71%, 11%, 19.10%, and 19.04% respectively.

At the same time, the scale of Huafon measurement and control R&D team continues to expand. By the end of 2024, the company has 379 R&D personnel, an increase of 108 from the end of 2023. At the end of 2024, the number of R&D personnel accounted for 48.59% of the company's total employees, an increase of 4.02 percentage points year-on-year.

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Editor-in-charge: ZB