ASE Technology Holding Co., Ltd. - 2Q24 Financial Summary
Business Context and Reporting Period
This Form 6-K filing reports the unaudited consolidated financial results for ASE Technology Holding Co., Ltd. (ASEH) for the second quarter of 2024, ended June 30, 2024. ASEH is a leading provider of semiconductor assembly and testing (ATM) and electronic manufacturing services (EMS). The results are prepared in accordance with Taiwan-IFRS.
Key Financial Metrics
| Metric | 2Q24 | 1Q24 | 2Q23 |
|---|---|---|---|
| Net Revenues | NT$ 140,238 million | NT$ 132,803 million | NT$ 136,275 million |
| Net Income (Parent) | NT$ 7,783 million | NT$ 5,682 million | NT$ 7,740 million |
| Basic EPS | NT$ 1.80 (US$0.112/ADS) | NT$ 1.32 | NT$ 1.80 |
| Diluted EPS | NT$ 1.75 (US$0.109/ADS) | NT$ 1.28 | NT$ 1.76 |
| Gross Margin | 16.4% | 15.7% | 15.9% |
| Operating Margin | 6.4% | 5.7% | 6.9% |
| EBITDA | NT$ 26,127 million | NT$ 23,974 million | NT$ 25,770 million |
| Cash & Equivalents | NT$ 66,173 million | NT$ 75,105 million | NT$ 59,611 million |
| Current Ratio | 1.17 | 1.19 | N/A |
| Net Debt to Equity | 0.34 | 0.36 | N/A |
Material Changes vs. Prior Periods
- Revenue Growth: Consolidated net revenues increased 2.9% year-over-year (YoY) and 5.6% sequentially. ATM revenues grew 2.2% YoY, while EMS revenues grew 4.1% YoY.
- Profitability: Net income attributable to shareholders rose 36.6% sequentially and 0.6% YoY. Gross margin expanded 0.7 percentage points sequentially to 16.4%.
- Cost Structure: Cost of revenues increased to NT$ 117,172 million. Raw material costs represented 50% of total net revenues. Labor costs were 11% of revenues.
- Non-Operating Items: A net foreign exchange loss of NT$ 1,420 million occurred due to USD appreciation against the New Taiwan dollar. This was partially offset by a net gain on valuation of financial assets of NT$ 2,664 million.
- Cash Flow: Net cash generated from operating activities was NT$ 16,786 million. Net cash used in investing activities was NT$ 14,482 million, driven by capital expenditures of US$ 406 million.
Outlook, Risks, and Commentary
- Segment Performance:
- ATM: Gross margin improved to 22.1% (up 1.1 pts sequentially). Operating margin reached 9.3%. Communication applications accounted for 49% of ATM revenues.
- EMS: Gross margin improved to 9.6% (up 0.3 pts sequentially). Operating margin reached 3.1%. Communication applications accounted for 33% of EMS revenues.
- Customer Concentration: The top five customers accounted for 45% of total net revenues (ATM basis). In EMS, the top five customers accounted for 67% of revenues.
- Risks: The filing includes a Safe Harbor notice citing risks related to semiconductor industry cyclicality, regulatory changes, geopolitical tensions (specifically between the Republic of China and the People's Republic of China), US trade policy shifts, and foreign currency fluctuations.
- Guidance: The filing does not provide specific numerical guidance for future quarters beyond the standard safe harbor disclaimer regarding forward-looking statements.
Investor Verification Checklist
- Currency Impact: Verify the sensitivity of future earnings to USD/NTD exchange rate fluctuations, given the NT$ 1.4 billion FX loss in 2Q24.
- Customer Concentration: Assess the risk associated with the top 5 customers representing 45% of total revenue and the top 10 representing 60%.
- Capital Allocation: Review the sustainability of US$ 406 million in quarterly CapEx against operating cash flows.
- Margin Sustainability: Monitor whether the sequential gross margin expansion (16.4%) can be maintained given raw material costs at 50% of revenue.
- Unaudited Status: Note that all figures are unaudited and prepared under Taiwan-IFRS, which may differ from US GAAP.