Thanks to the fact that flash memory shipments are not in the off-season, memory giant Wang Hong has performed brilliantly in the first quarter of 2018. The gross profit rate in the first quarter reached 42%, and the after-tax profit reached NT$1.882 billion, an increase of 829% year-on-year. Net profit of 1.06 yuan per share; Chairman Wu Minqiu said that in the second quarter of last year, it was the lowest season in the whole year. A slight decline in revenue within about 5% would be a good performance, and the overall price will be expected to stabilize, especially It was one of the major growth momentums in 2018. Wang Hong's consolidated revenue for the first quarter of 2018 was NT$9,061 million, a 14% decrease in quarter, an increase of 37% over the same period in 2017, and a gross operating profit of NT$3,814 million. The interest rate was 42%, a 1ppt decrease in the quarter, which was mainly affected by recent exchange rate fluctuations, but it increased by 15 percentage points compared to the same period in 2017, maintaining operating high-end performance. The operating profit rate was 22%, which was 3 percentage points lower than that in the fourth quarter. However, compared with the same period in 2017, the growth rate was 16%. The after-tax profit was NT$1.882 billion, which was a 27% decrease in the quarter. The annual growth rate increased significantly by 829%. Wu Minqiu said that the decline in the first quarter was slower in the off-season than in previous years, with capacity above 64Gb. The products accounted for approximately 57% of ROM revenue in the first quarter of 2018, which was superior to seasonal factors. NOR went to high-quality, high-density products. In the first quarter, ASP still showed a slight growth trend. Products under 75 nanometers accounted for about 57% of NOR revenue in the first quarter of 2018. It is expected that 55nm will grow significantly in 2018. Although SLC products decreased in shipments in the first quarter, prices still rose. It is expected that SLC NAND will be in short supply in 2018, and the quotation will rise steadily, bringing bright growth performance. In terms of the revenue of each product line, In terms of NAND, SLC benefited from rising prices, so the single-quarter revenue increased by 10% to 236% year-on-year, accounting for 26% of the first quarter revenue. In the NOR segment, the quotation rose slightly compared to the fourth quarter of 2017. However, due to the impact of the off-season, the single-quarter overall performance quarter was reduced by 21%, 5% year-on-year, and the overall proportion was about 44%. Seasonal factors of the ROM production line had a greater impact, with quarter reduction of approximately 21% and annual increase of approximately 33%. The revenue ratio was 22%, and the foundry business group accounted for 8% of revenue, 1% quarter-on-year, and 32% year-on-year. Looking ahead, Wu Minqiu believes that the second quarter is Wangong’s traditional off-season operation, which is also the highest performance in the whole year. In the light season, the situation in the second quarter of 2018 should not change. Among them, ROM will be a weaker product line, and NOR Flash and other product lines are relatively stable, compared to the low season in previous years. Performance still grows, as the overall product price is expected to remain stable, the overall second-quarter results will only slightly decline, it is estimated that a decline of 5% or less will be a good performance, and the gross profit margin will also be expected to maintain. Actively rushing into the memory industry, Wu Minqiu said that in 2018, mainland manufacturers will cause considerable price competition in the low-density, low-quality NOR Flash market. However, Wang Hong’s strategy is to adopt profit orientation and target high-density, high-quality products. In the NOR Flash market, this market will continue to be in short supply, especially for niche-type products such as automotive and industrial use. It is expected that NOR will be short of stock in the third quarter, so the market will still have room for growth in the second half of the year. It is worth noting that Wang Hong's stock amount in the first quarter climbed to NT$11,228 million. Wu Minqiu expects that the stock level in the second quarter will increase further. Among them, up to 80% of inventories are related to Nintendo's major customers. The tension in the Sino-Japanese trade war heats up. Wu Min-Qiu believes that although there may be individual impact on some companies, it looks like the situation is still good. It is expected that there should not be too much operation on Wanghong. ring.
