Sustained Price Pressure Leads to Naxin Micro's Q3 Loss of 400 Million Yuan

On the evening of October 28th, Naxiny Micro disclosed its financial report for the third quarter of 2024, showing that the company achieved a revenue of 1.366 billion yuan in the first three quarters, a year-on-year increase of 36.49%; the net profit attributable to the parent company was a loss of 408 million yuan, compared to a loss of 251 million yuan in the same period last year; the net profit after deducting non-recurring gains and losses was a loss of 441 million yuan, compared to a loss of 314 million yuan in the same period last year.

Naxiny Micro stated that the main reasons for its losses are: first, influenced by the overall macroeconomy and intensified market competition, the company's product prices are under pressure, and the gross margin has decreased compared to the same period last year; second, the sales expenses and administrative expenses have increased year-on-year; third, due to the implementation of the company's restricted stock incentive plan, the amortized share-based payment expenses amounted to 217.90 million yuan.

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In the first three quarters of 2024, the company's gross margin was 33.21%, a decrease of 7.86 percentage points year-on-year; the net profit margin was -29.85%, a decrease of 4.78 percentage points compared to the same period last year.

Economist Song Qinghui told reporters that the significant decrease in Naxiny Micro's gross margin indicates that the company faces challenges in cost control and product pricing, which may be due to rising raw material costs or intensified market competition. "Currently, the company's top priority is to adjust its product structure and cost control; otherwise, even if revenue increases, it would merely be 'making clothes for others' for suppliers."

Information shows that Naxiny Micro is a high-performance, high-reliability analog and mixed-signal chip company. The company focuses on three major directions: sensors, signal chains, and power management, providing a rich array of semiconductor products and solutions for applications in automotive, industrial, information and communication technology, and consumer electronics sectors.

Looking forward to the trends in the downstream markets such as automotive electronics, Naxiny Micro stated that the demand for automotive electronics continues to grow, whether it is the production and sales volume of the entire Chinese automotive market or the penetration rate of new energy vehicles, both are still in a state of continuous improvement. The company's growth in the automotive market mainly comes from the expansion of applications and products in the automotive market.

Among them, in terms of the layout of automotive intelligent products, Naxiny Micro has made arrangements in the product directions of sensors, power management, and signal chains, which can be applied to intelligent cockpits and autonomous driving in automobiles.

It should be noted that Naxiny Micro has also taken actions in recent industry mergers and acquisitions.

In June this year, following the release of the "Science and Technology Innovation Board Eight Articles," Naxiny Micro announced the acquisition of a 79.31% stake in Shanghai Megatron Microelectronics Co., Ltd. (hereinafter referred to as "Megatron") for a high premium of 793 million yuan in cash, which attracted market attention.

Megatron mainly engages in the research and development, production, and sales of mixed-signal chips based on magnetoelectric induction technology and intelligent motion control, with its main product being magnetic sensor chips. Therefore, Naxiny Micro stated that this transaction will help enrich the company's product categories in the field of magnetic sensors, increase the company's sales scale and market share in the magnetic sensor field, etc.Regarding the latest developments in the acquisition, Naxin Micro disclosed in its third-quarter report that the aforementioned acquisition is progressing smoothly, and the company has paid the second installment of the transfer price for the acquisition to Shanghai Silirui Technology Co., Ltd. and others; as of now, Magon has completed the change in its shareholder register, and the company has obtained 62.68% of the shares of Magon directly held by the transaction counterparty Silirui Technology.

The reporter noticed that Naxin Micro disclosed in its 2024 third-quarter report that there have been changes in the holdings of some of the company's shareholders. Among them, three shareholders have reduced their holdings.

Among the shareholders who reduced their holdings, the company's shareholders Guorun Ruiqi, Hui Yue Growth, Suzhou Huayi and its person acting in concert Changsha Huayi have completed the implementation of the reduction plan, collectively reducing about 5.18 million shares of the company, accounting for approximately 3.64% of the company's total shares.