Revenue Increases but Profit Doesn't: National Silicon Industry Group Suffers First Loss of Nearly 1 Billion Yuan After Listing, with Outstanding Bonds Totaling 2.84 Billion Yuan

As the earnings reporting season nears its end, annual reports and first-quarter reports for some publicly listed firms have begun to be released in rapid succession. By examining the revenue performance data of industry leaders, we can gain important insights into the future direction of the industry.

Recently, Shanghai Silicon Industry Group Co., Ltd. (hereinafter referred to as "National Silicon Industry Group") successively disclosed its 2024 annual report and 2025 first-quarter report. The data shows that in 2024, the company achieved an operating revenue of 3.388 billion yuan, up 6.18% YoY; net profit attributable to shareholders of the listed company was -971 million yuan, down 620.28% YoY; net profit attributable to shareholders of the listed company excluding non-recurring gains and losses was -1.243 billion yuan, down 649.09% YoY. In terms of the first-quarter report, the company's total operating revenue was 802 million yuan, up 10.60% YoY, and net profit attributable to shareholders of the listed company was -208.5285 million yuan, down 5.47% YoY.

In its annual report, the company stated that due to the impact of the market environment in the semiconductor industry, its operating revenue during the reporting period had not yet returned to the level of 2022. However, benefiting from a significant increase of over 70% in sales volume and over 50% in revenue of 300mm semiconductor silicon wafers compared to the same period in 2023, the company's total operating revenue during the reporting period rose 6.18% YoY against the trend.

However, on the profit side, affected by the decline in industry prosperity, the average price of 200mm silicon wafers fell significantly. Coupled with factors such as the company's valuation adjustments for the acquired targets Okmetic and Xin'ao Technology, and the provision for impairment of goodwill of approximately 300 million yuan, the company's performance still faced short-term pressure.

As one of the largest semiconductor silicon wafer manufacturing enterprises in the Chinese mainland, National Silicon Industry Group is mainly engaged in the R&D, production, and sales of semiconductor silicon wafers and other materials. It is the first enterprise in the Chinese mainland to achieve large-scale production and sales of 300mm semiconductor silicon wafers. After listing on the STAR Market in 2020, the company continued to make small profits year after year until it incurred a loss of nearly 1 billion yuan for the first time last year, exceeding the total net profit after listing.

In the view of many industry insiders, 2024 was a year when both global silicon wafer shipments and sales revenue contracted. In recent years, the pace of localisation substitution for large-size silicon wafers has accelerated, but the continuous weakness in demand for consumer electronics has led to a pullback in shipment area and prices, thereby increasing the profit pressure on relevant producers.

According to data from SEMI's Semiconductor Industry Network, global silicon wafer shipments fell 2.7% to 12,266 million square inches (MSI) in 2024, hitting a recent low, while silicon wafer sales revenue declined 6.5% to $11.5 billion in the same period. In the second half of 2024, global wafer demand began to recover from the industry downturn in 2023. However, due to weak end-use demand in some segments, it affected the utilization rate of wafer fabs and wafer shipments for specific applications, resulting in a slower pace of inventory adjustment.

Ma Liang, an analyst at Guotai Junan Securities, believes that as a leader in the domestic semiconductor silicon wafer industry, National Silicon Industry Group's 300mm silicon wafer products have capacity scale and technological advantages in the Chinese mainland, providing a foundation for revenue growth driven by increased product shipments. Meanwhile, the company has continued to integrate its high-end silicon wafer business in recent years, collaborating with multiple subsidiaries such as Shanghai Xinsheng and Xin'ao Technology to target the high-end market, and still possesses competitive strength for long-term profitability improvement.

It is worth noting that National Silicon Industry Group issued the first science and technology innovation corporate bond by a STAR Market-listed company in China in 2023. Recently, it reappeared in the exchange bond market, with its "25 National Silicon Industry Group MTN001" science and technology innovation note winning the bid at an interest rate of 2.4%, the company's lowest bond issuance coupon rate to date. Currently, the company has a total of three science and technology innovation notes with a cumulative amount of 2.84 billion yuan, and there are no bonds due within the next year.

In terms of debt repayment indicators, due to the weakening of net profit and operating cash flow, the overall indicators show a downward trend. First-quarter report data shows that working capital was 2.84 billion yuan, and the cash ratio dropped to 1.19 times. Currently, the company's interest coverage ratio is -6.36 times, the lowest level in recent years. However, considering that the company can obtain support from various parties such as low-interest loans, bond issuances, equity financing, capital increases from industrial funds, and state-backed shareholders, and enjoys subsidy policies for R&D, its overall debt repayment ability remains relatively stable.