Print sector faces headwinds as Hubei Dinglong Co., Ltd sees profits decline amidst market challenges.
In their latest 2023 H1 financial report, Hubei Dinglong Co., Ltd revealed its performance during the reporting period, marked by significant challenges in the print sector. Based in China, the company reported an operating income of ¥1.159 billion yuan, equivalent to approximately €146.7 million euros or $166.5 million US dollars. This figure represented an 11.67% decrease compared to last year’s period.
This decline was attributed mainly to the consolidation of financial statements, which impacted the income of Zhuhai Tianyu, one of its subsidiaries. Excluding this factor, the company’s operating revenue still experienced a 7.9% YoY decrease.
The net profit attributable to shareholders of the listed company stood at ¥96 million (€12.1 million/ $13.8 million), marking a significant 50.70% decrease from the previous year. Several factors contributed to this decline, including reduced profits in CMP polishing pads and high-margin consumables, increased R&D expenses, decreased exchange income, and higher financial expenses.
Further analysis of the financials revealed a decrease in net operating cash flow, down by 27% YoY to ¥198 million (€25 million/ $28.4 million). Increased personnel expenses and various taxes and fees primarily drove this decrease.
In the print sector, which is a significant part of Hubei Dinglong’s business, the company faced headwinds but managed to maintain stability. Sales revenue for printing and copying general consumables, including printing consumable chips, amounted to ¥914 million (€115.5 million/ $131.3 million), reflecting an 11.95% YoY decrease. Factors such as market demand and supply chain challenges influenced this decline. However, certain product lines, including colour toner, toner cartridges, and ink cartridges, demonstrated resilience and positive performance.
During the reporting period, the sales volume of the company’s ink cartridges increased by 25% year-on-year.
Last week, The Recycler reported that Hubei Dinglong Holding announced that its subsidiary, Speed Infotech Ltd (also known as Beihai Jixun Technology Co., Ltd.), had gone public on China’s national SME share transfer system effective as of August 15, 2023.
Despite these challenges, Hubei Dinglong Co., Ltd remained committed to innovation. The company invested ¥175 million (€22.1 million/ $25.1 million) in research and development during the reporting period, reflecting a 24% increase from the previous year. This investment accounted for 15% of the company’s operating income. The company continued to focus on developing new CMP polishing pads, semiconductor materials, and advanced packaging materials and exploring innovative materials and import substitution in key areas.
In addition to the financial results, Hubei Dinglong Co., Ltd highlighted its strong commitment to intellectual property. As of June 30, 2023, the company held an impressive portfolio of 846 authorized patents, encompassing design, utility model, invention patents, software copyrights, and integrated circuit layout designs.
While facing challenges, Hubei Dinglong Co., Ltd remains focused on its long-term growth strategy, emphasizing innovation and adaptability in a dynamic market environment. The company’s dedication to research and development and robust intellectual property holdings signals a commitment to emerging opportunities in the ever-evolving print and materials sectors. Investors and industry observers will watch closely as the company navigates these challenges and strives for future success.
