Silicon carbide (SiC) epitaxial wafer maker Guangdong Tianyu Semiconductor Co. Ltd. (2658.HK) said last Friday it expects to report a net loss of 104 million yuan ($15 million) to 123 million yuan for the six months through June, reversing a net profit of about 30.9 million yuan a year earlier.
The company said its revenue rose modestly year-on-year during the period, but its gross profit fell substantially as supply-demand rebalancing and intense competition in the SiC epitaxial-wafer market drove down average selling prices. Its production volume was also affected by the customary seasonal slowdown around the Chinese New Year holiday in the first quarter. While customer orders and production gradually recovered in the second quarter, the improvement couldn’t fully offset fixed manufacturing costs and depreciation incurred during the first half.
The company also booked a non-cash provision for inventory write-downs due to lower estimated selling prices and a higher inventory balance. Meanwhile, depreciation of the Hong Kong dollar against the yuan increased foreign-exchange losses on the company’s Hong Kong dollar-denominated funds. Administrative and other operating expenses also rose after the company recognized impairment losses on trade receivables that were settled more slowly than expected.
Tianyu’s shares opened lower on Monday and traded at HK$37.1 by the midday break, down 1.07%.
By Lee Shih Ta
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