Espressif Systems stated in recent research notes that this year customers are actively shipping goods, mainly with a focus on export, but orders are within the country. In terms of inventory, the company stated that due to high customer demand, inventory levels were lower than expected in Q1, and the company's performance is normally increasing from quarter to quarter, so the company took the initiative to increase inventory in Q2.
On June 26th, after the performance pre-increase announcements of semiconductor companies in testing, storage, simulation and other links, another semiconductor company sent good news today (June 26th).
The IoT Wi-Fi MCU supplier, Espressif Systems, has released a performance forecast for January to May 2024, with expected net income attributable to shareholders of approximately 119 million yuan from January to May 2024, an increase of about 65.6 million yuan compared with the same period last year, an increase of about 123.51% year-on-year; non-GAAP net profit is expected to be around 118 million yuan, an increase of about 74.8 million yuan compared with the same period last year, an increase of about 172.90% year-on-year.
Espressif Systems attributed the growth in net income to the continuously improving digital penetration rate in downstream industries and an improving competitive landscape. The company made new breakthroughs in B-end performance and achieved a single-month record high of revenue in May.
It is reported that in the first five months of this year, Espressif Systems mainly attributed its growth to new customers in 2023 and 2024. The company also stated in recently disclosed research notes that customers have been actively shipping cargo this year, mainly for export-oriented direction, but orders are placed within the country. As IoT industry downstream is dispersed, the company's demand is driven not by specific industries, but by an increase in the smart penetration rate of various industries.
The company's revenue growth this period is mainly contributed by emerging product lines (ESP32-S3, C2, and C3).
Espressif Systems also added that compared with the current emerging product lines, the new products have differentiated functional properties and are not substitutes. The new products will assist in expanding into the new market. Over time, these new products will begin to contribute significantly to revenue.
In their recent research notes, the company also disclosed new product sales. It is reported that except for ESP32-C5, C6, P4, H4, and H2 are expected to enter high-speed growth next year. At present, C6 has begun to contribute revenue and is in a period of high growth, expected to be classified as emerging product lines by the end of the year; H2 has been put into production and is expected to be shipped in large quantities in the second half of the year; P4 will be retailed next month; C5 is expected to be sent for sampling this year.
According to the forecast disclosure, the company expects to maintain a stable target of 40% gross margin level. However, they also admitted that structural changes in chip and module product sales may have some impact on the company's comprehensive gross margin rate.
Espressif Systems stated in their recently disclosed institutional research notes that due to strong customer demand, the inventory level was lower than expected in the first quarter, and since its performance is normally increasing quarterly, the company proactively increased its inventory in the second quarter.
Active customer shipping, improving demand, and inventory improvement are all significant bullish signals. The Securities Times reported that recently, the semiconductor industry has been frequently in the spotlight.
The World Semiconductor Trade Statistics (WSTS) raised its forecast for global semiconductor output this year in June, estimating an increase of 16%. At the same time, the latest data from the Semiconductor Industry Association (SIA) showed that global semiconductor sales in April increased by 15.8% YoY and by 1.1% MoM, reaching US$46.43 billion. This is the first time since December 2023 that MoM growth has been positive, indicating that inventory destocking has made progress and sales have further recovered.
Pan Jie, an analyst at Tianfeng Securities, believes that with the sustained improvement of the industry margin, the semiconductor industry will enter its traditional peak season in the second half of the year, and domestic semiconductor companies' growth prospects will be highlighted as domestic manufacturing localization process accelerates driven by policies.