On August 9th, the Science and Technology Innovation Board Daily (Reporter: Wu Xuguang) reported that on the evening of August 8th, the electronic special materials company Nanya New Material released its 2024 interim report.

In the first half of this year, Nanya New Material achieved operating income of RMB 1.611 billion, a year-on-year increase of 9.34%, and achieved a net profit of RMB 55.2913 million, an increase of 251.22% from the same period last year, turning losses into profits.

Regarding the growth of performance, the company stated that the year-on-year increase in operating income is mainly due to the comprehensive impact of the sales volume and selling price of covered copper plates and adhesive sheets during the reporting period; the increase in net profit is mainly due to the company's optimization of product structure, expansion of markets and business, and significant improvement in revenue and gross profit margin compared to the same period last year, and increased profitability.

Nanya New Material's core business is the design, research and development, production and sales of composite materials and their products such as covered copper plates and adhesive sheets. In recent years, the rapid development of industries such as 5G, AI artificial intelligence, new energy vehicles, and intelligent driving has driven the demand for covered copper plate related consumer markets to improve.

According to Prismark's forecast, the global covered copper plate market is expected to expand from 69.5 billion US dollars in 2023 to 90.4 billion US dollars in 2028 in the next five years.

Regarding the current sales and application fields of products, a person in charge of the secretary office of the company told the Science and Technology Innovation Board Daily reporter that in the first half of this year, Nanya New Material's sales in the fields of car-mounted equipment and high-speed domain were good, and products with AI computing power needs were also in the high-speed sector, and the consumer electronics sector still needs to observe terminal demand. The company is currently developing new products targeting the level of Matsushita M9.

As the company's business scale continues to expand, the absolute amount of the company's inventory rises, which in turn leads to the risk of provision for the decline in inventory value. According to the company's semi-annual report, Nanya New Material's inventory rose from 0.47 billion yuan at the end of last year to 0.529 billion yuan in the first half of this year, an increase of 12.55%.

On the evening of August 9th, Nanya New Material also announced that the company's 2024 interim credit impairment loss and asset impairment loss totaled 18.096 million yuan, affecting the company's consolidated statements' total profit after tax by 18.096 million yuan.

Specifically, the matter of provision for impairment of assets in this case includes a provision for credit impairment loss of 0.5279 million yuan; calculating the provision for inventory depreciation for the difference between the cost of inventory and the net realizable value, resulting in a provision for impairment of assets of 17.5681 million yuan.

The Science and Technology Innovation Board Daily reporter found through combing the company's financial reports that during the reporting period, among Nanya New Material's 10 major holding and participating companies, except for Jiangxi Nanya which achieved a net profit of 55.418 million yuan, 6 subsidiaries suffered from losses, and 3 subsidiaries had zero income, with a high loss rate of 60%.

Market analysts interviewed by the Science and Technology Innovation Board Daily said that losses in subsidiaries may directly affect the financial situation of the parent company. If the parent company has investments in the subsidiaries, losses in the subsidiaries will reduce the parent company's investment income, and may even lead to the loss of investment capital, which may cause chain reactions such as fluctuations in the company's stock price and downgrading of credit ratings.

As of the close of August 8th, Nanya New Material closed at RMB 19.03/share, with a cumulative decline of 24.12% this year, running 25.4 percentage points behind the same period of the CSI 300 Index. The company's latest market value is RMB 4.585 billion.

It is worth noting that under the background of Nanya New Material's return to profitability, on the evening of August 8th, the company also announced its 2024 interim distribution plan, intending to distribute RMB 1 per 10 shares (including tax), with an expected total cash dividend of RMB 22.3309 million, accounting for 40.39% of the company's net profit for the first half of 2024.