SCREEN Holdings Financial Analysis: 47.4% Net Profit Growth

Business Description

SCREEN Holdings Co., Ltd. is a prominent company operating primarily in the semiconductor production equipment (SPE) sector. Additionally, it has significant business segments in graphic arts equipment (GA), display production equipment and coater (FT), and PCB-related equipment (PE). The company is listed on the Prime Market of the Tokyo Stock Exchange, indicating strong market credibility.

Industry Position and Market Share

SCREEN Holdings is a key player in the semiconductor industry, benefiting from the growing demand for advanced semiconductor technologies driven by AI, digital transformation (DX), and other technological advancements. The company faces competition from other semiconductor equipment manufacturers but maintains a robust market share due to its innovative solutions and strong customer relationships.

Revenue Streams and Customer Base

The company’s revenue streams are diversified across its four main business segments: SPE, GA, FT, and PE. The semiconductor production equipment segment is the largest contributor to revenue, followed by graphic arts equipment, display production equipment, and PCB-related equipment. SCREEN Holdings serves a global customer base, with significant sales in China, Taiwan, and other regions.

Financial Statement Analysis

Income Statement

For the six months ended September 30, 2024, SCREEN Holdings reported consolidated net sales of ¥277,399 million, a 24.2% increase from the previous year’s corresponding period. Operating income rose by 51.1% to ¥58,231 million, and ordinary income increased by 49.0% to ¥58,650 million. Profit attributable to owners of the parent company grew by 47.4% to ¥38,838 million.

Balance Sheet

As of September 30, 2024, the company’s total assets stood at ¥668,121 million, a slight decrease of 1.3% from March 31, 2024. Total liabilities decreased by 10.5% to ¥272,948 million, while total net assets increased by 6.3% to ¥395,172 million. The equity ratio improved to 59.1% from 54.9% as of March 31, 2024.

Cash Flow Statement

Net cash provided by operating activities was ¥33,494 million, a decrease from ¥68,909 million in the previous year. Net cash used in investing activities amounted to ¥14,527 million, and net cash used in financing activities was ¥14,729 million. As a result, cash and cash equivalents as of September 30, 2024, totaled ¥198,441 million.

Dividends

The company has announced a cash dividend of ¥120.00 per share for the fiscal year ending March 31, 2025, with a forecasted annual dividend of ¥247.00 per share, up from the previous year’s dividend of ¥223.50 per share (post-stock split basis).

Key Findings

• Strong revenue growth of 24.2% year-on-year.
• Significant increase in operating income by 51.1% and ordinary income by 49.0%.
• Net profit attributable to owners of the parent increased by 47.4%.
• Improved equity ratio to 59.1%, indicating a strong financial position.
• Cash dividend of ¥120.00 per share with a forecasted annual dividend of ¥247.00 per share.

Special Activities

The company is focusing on expanding its production capabilities and increasing its investments in R&D, which is expected to enhance its competitive edge and profitability in the long term. Notably, SCREEN Holdings is constructing a new factory at the Hikone Site to support this growth.

Investment Recommendations

For Current Investors

Given the strong financial performance and positive outlook, current investors should hold onto their shares. The company’s robust growth, improved profitability, and attractive dividend yield make it a compelling investment.

For Potential Investors

Potential investors should consider buying shares of SCREEN Holdings. The company’s strong market position, consistent revenue growth, and strategic investments in future growth areas present a promising investment opportunity.

Disclaimer

These recommendations are based on the financial report for the second quarter ended September 30, 2024, and are subject to change based on market conditions and other factors. Investors should perform their own due diligence before making investment decisions.