Hwasum Reports H1 EPS of NT$6.52; Second Half to Outperform First Half with AIDC Orders Reaching NT$22 Billion

Heavy electric equipment manufacturer Hwasum (1519-TW) announced its latest financial report today (10th), revealing a post-tax net profit of NT$2.06 billion in the first half of 2024, representing a year-on-year increase of over 20%, with earnings per share (EPS) at NT$6.52. Hwasum stated that ongoing momentum from AIDC (Artificial Intelligence Data Center) projects and Taiwan Power Company's grid resilience initiatives continues to drive growth, and it expects second-half operations to outperform the first half. Notably, AIDC demand remains robust, with cumulative backlog orders reaching NT$22 billion, providing visibility through 2029.

In Q2, Hwasum recorded revenue of NT$5.444 billion, up 14.67% quarter-on-quarter but down 10.18% year-on-year. Gross margin stood at 43.5%, flat from the previous quarter and up 3.13 percentage points year-on-year. Operating margin was 22.11%, up 0.92 percentage points from Q1 but down 2.61 percentage points from the same period last year. Post-tax net profit reached NT$1.021 billion, down 1.73% quarter-on-quarter but up 29.24% year-on-year, with EPS at NT$3.23.

For the first half of 2024, total revenue was NT$10.212 billion, down 2.7% year-on-year. Gross margin improved to 43.55%, up 5.08 percentage points from the same period last year. Operating margin was 21.68%, down 1.85 percentage points year-on-year. Net profit after tax was NT$2.06 billion, up 24.8% year-on-year, with EPS at NT$6.52.

Hwasum noted that minor delivery delays on U.S.-bound exports in the first half are expected to be recovered in the second half, supporting its outlook for stronger second-half performance. Key growth drivers include AIDC projects, U.S. infrastructure development, Taiwan Power's grid resilience program, and continued expansion by technology firms. AIDC-related orders alone have reached a cumulative backlog of NT$22 billion.

Regarding transformer component shortages, Hwasum stated it has implemented product standardization and pre-purchasing strategies to build appropriate inventory. Current lead times are approximately 2.5 to 3 years, while Taiwan Power-related projects have lead times of about 2 years—longer than the previous 6 months but still shorter than for other clients.