MediaTek Q1 Net Profit Up 87.4% YoY to NT$31.66B

On April 26, MediaTek, a leading chip design company, released its 2024 first-quarter financial results. The company reported revenue of NT$133.458 billion (approximately RMB29.654 billion), representing a 3% increase from the fourth quarter of 2023 and a 39.5% increase from the same period in 2023. This performance exceeded expectations. The gross profit margin reached 52.4%, up by 4.1 percentage points compared to the fourth quarter of 2023 and 4.4 percentage points from the same period in 2023, surpassing forecasts. Net profit was NT$31.655 billion (approximately RMB7.034 billion), marking an 87.4% increase from the same period in 2023, with earnings per share of NT$19.85, achieving the third-highest quarterly record in the company's history.

MediaTek attributes its quarter-on-quarter and year-on-year revenue growth to robust demand from mobile phones, broadband, and television markets. The gross profit margin increase was primarily driven by a one-time project, which had a positive impact on the margin by 4.5 percentage points. Operating expenses decreased slightly from the fourth quarter of 2023 due to lower sales expenses. However, compared to the same period in 2023, operating expenses increased due to higher R&D investments.

Additionally, the operating profit margin for the first quarter was 24.1%, surpassing the 19.1% recorded in the fourth quarter of 2023 and 15% in the same period of 2023. The first-quarter net profit, net profit margin, and earnings per share all showed notable increases compared to both the fourth quarter of 2023 and the same period of 2023. These gains were mainly due to higher revenue and an increase in the gross profit margin from the one-time project.

MediaTek reported a net inventory level of NT$49.212 billion for the first quarter, with an inventory turnover period of 66 days, matching the fourth quarter of 2023 and lower than the 128 days recorded in the same period of 2023. This indicates a return to healthy inventory levels.

Looking ahead to the second quarter, MediaTek anticipates mobile phone shipments to normalize, with continued growth in revenue from television and computing devices. Demand for power management chips in various applications is expected to rebound. Overall, second-quarter revenue is projected to range between NT$121.4 billion and NT$133.5 billion, based on an exchange rate of USD to NT$32, which is roughly consistent with the first quarter, with a potential decrease of up to 9%. This still represents an increase of 24% to 36% from the same period in 2023. The projected operating gross profit margin is 47.0% ± 1.5%, while the expense rate is estimated to be 30% ± 2%.