Li-Chi's Merger Synergy Drives July Revenue to Near 14-Year High

Li-Chi (3444-TW) announced today (10th) its July revenue reached NT$137 million, representing a 17% month-on-month increase and a 36% year-on-year surge, setting a new monthly high not seen in nearly 14 years. This growth was primarily driven by the formal integration of Ming-Chun Yuan into the group starting July 1, along with robust demand for high-end thermal products, expanding both the group’s operational scale and product portfolio.

Cumulative revenue for the first seven months of the year reached NT$790 million, reflecting a 9% year-on-year increase. Li-Chi anticipates that as merger synergies deepen, second-half performance will accelerate significantly. Analysts project gross margins could rise by as much as 10 percentage points.

By product line, semiconductor substrates benefited from pricing improvements and stabilized raw material supply, delivering a 12% year-on-year and 8% month-on-month revenue increase in July. Thermal-related products, particularly high-end vapor chambers moving toward larger sizes and higher unit prices, saw a remarkable 80% year-on-year revenue growth, with demand remaining strong.

Another key growth driver is Ming-Chun Yuan’s existing server application SSD metal enclosure products, which were included in consolidated revenue for the first time this month, contributing NT$13.74 million. These products have already entered the supply chain of global memory giant Kioxia, with shipments and revenue growing steadily month-on-month. This not only extends Li-Chi’s footprint in server and memory application markets but also serves as a new growth engine driving overall revenue expansion.

Li-Chi posted second-quarter operating profit of NT$13.85 million, a 20% sequential increase, and net profit after tax of NT$28.67 million, up 55% quarter-on-quarter and 54% year-on-year. The prior-year period was impacted by foreign exchange losses due to TWD appreciation, resulting in a lower base. Cumulative first-half net profit reached NT$47.23 million, or NT$1.05 per share.

Li-Chi stated that with Ming-Chun Yuan consolidated from July, the group has expanded from distribution to full manufacturing of vapor chambers, capturing profitability across both sales and production. Additionally, the stable server SSD metal enclosure business supplying Kioxia has been added. With full consolidation benefits expected in Q3, combined with pricing gains from high-end vapor chambers, SSD enclosures, and substrates, the group’s revenue base is set to shift significantly upward. The proportion of high-margin products is also expected to rise rapidly, ushering in a new phase of accelerated revenue and profit growth in the second half of the year.