On August 21, Huahaicheng Technology disclosed its 2024 semi-annual report according to the Star Daily.

During the reporting period, the company achieved operating income of about 0.155 billion yuan, an increase of 23.03% compared to the same period last year; the net income attributable to the parent company was about 24.8944 million yuan, an increase of 105.87% compared to the same period last year; and the non-net income was 23.7654 million yuan, an increase of 118.56% compared to the same period last year.

In terms of quarterly performance, the company achieved operating income of 82.92 million yuan in the second quarter, a year-on-year increase of 15.35%; achieved net income attributable to the parent company of 12.12 million yuan, a year-on-year increase of 52.75%, with a slight decrease compared to the previous quarter.

Regarding the business situation, Huahaicheng Technology stated that with the gradual recovery of end-use consumer electronics and the demand drive in fields such as artificial intelligence, automobiles, and high-performance computers, the semiconductor materials sector is experiencing a recovery and growth. The capacity utilization rate of the company's downstream customers has increased, and the company's order scheduling has become more reasonable, further optimizing the product structure.

The main business of Huahaicheng Technology is the research, development, and industrialization of semiconductor packaging materials. The main products include epoxy encapsulation materials and electronic adhesives, which are applied to semiconductor packaging, board-level assembly, and other application scenarios.

The company has more than 200 epoxy encapsulation products, including EMG100-900 series, EMS100-700 series, EMO series, etc. Liquid electronic adhesives include HHCK-31 series, HHCK-61 series, HHCK-69 series, etc., mainly used in wafer-level packaging, bottom filling, chip bonding, PCB board-level module assembly, and various structural bonding.

It is worth mentioning that Huahaichengke stated in its financial report that it continues to invest in research and development in the particle-like (GMC) and liquid molding compound (LMC) for the HBM field. According to the latest institutional research notes disclosed by the company, its GMC can be used for HBM packaging. The related products have been verified by customers and are currently in the sampling stage.

In terms of advanced packaging business, the company has developed high-end packaging materials for advanced packaging areas such as BGA, SiP, and FOWLP/FOPLP. Currently, they are still in the stage of customer assessment and verification, and mass production has not yet been achieved. Huahaichengke acknowledges that it will take some time for this material to be widely recognized and industrialized by chip design companies and packaging manufacturers.

It is reported that the volume of revenue from the company's advanced packaging products is affected by various factors, including chip design manufacturers' intentions, customer trial and error costs, and industry prosperity. Huahaichengke stated that there is still a gap in the overall technical level compared to foreign major manufacturers, especially in the high-end product field, where there are relatively few opportunities for verification and application, and there are risks of delayed research and development or progress not meeting expectations.

In terms of production capacity, the company revealed that during the reporting period, it performed partial transformation of the existing production lines to improve operational efficiency and optimize line configuration. The company's fund-raising project, the "High-Density Integrated Circuit and System-Level Module Packaging Epoxy Molding Compound Project," is progressing smoothly, and the main construction has been basically completed.

In terms of market development, the company's capacitor materials have been widely used, and the materials used for photovoltaic module packaging have achieved some sales. It is expected that the mold cleaning materials and lubricant materials for semiconductor packaging will be put into production in the third quarter.

During the reporting period, Huahaichengke invested 12.3391 million yuan in research and development, a year-on-year increase of 13.11%, accounting for 7.94% of total revenue. It is reported that the company has completed the transformation of the pilot production line, added ball mills, high-speed mixers, post-mixers, and magnetic separators for pilot production, and enhanced the storage control system for raw materials and semi-finished products. In response to the increasing demand for automotive-grade epoxy molding compounds, the company is further developing sulfur-free epoxy molding compound products.