Goodix's Semi-annual Profit Tumbles, Shares Down 2.94%
Increasing investment in R&D further lowers the company's income.
The semiconductor company Shenzhen Goodix Technology (603160:CH) released its semi-annual report on August 28. The results show that, on a year-on-year basis, though Goodix's revenue increased by 5.87%, its net income dropped significantly by 41.26%. In the first half of 2020, Goodix generated CNY 3.1 billion revenue and CNY 597.3 million profit. The net operating cash flow, reduced by 99.65%, from CNY 808 million in 1H 2019 to CNY 2.8 million in 1H 2020.
Founded in 2002, Goodix Technology is a human-computer interaction technology and solutions provider specialized in the intelligent terminal sector, and smartphones, tablets and wearable products. The company develops and manufactures fingerprint identification chips and capacitive touch controller chips. The products and services of Goodix are used by Huawei, Xiaomi (01810:HK), Samsung (005930:KR), Lenovo (00992:HK), OPPO, JDI (06740:JP), Toshiba (06502:JP) and Panasonic (06752:JP).
On August 15 last year, Goodix Technology passed the proposal of purchasing ‘Voice and Audio Solutions (VAS)’ from NXP B.V. at USD 165 million. Goodix Technology then can set up sub-subsidiaries through Goodix Technology (Hong Kong) in the countries where NXP B.V. operates its VAS business. Goodix together with existing subsidiaries will take over VAS’s fixed assets, inventories, patents, contracts and specified executives. By November 23, 2019, the company has established four sub-subsidiaries in Holland, Belgium, France and India.
Driven by IoT, 5G, cloud computing and AI, IBS’s report ‘Semiconductor Market Analysis’ predicts that the global semiconductor market size will achieve USD 1052.7 billion in 2030 while that in 2019 is USD 400.9 billion. The rising speed equals to a compound annual increase rate of 9.17%. China’s semiconductor market accounts for more than half of the international market in size and the proportion is estimated to further expand to 59% in 2030.
The share price of Goodix Technology reduced by 2.94% during the day after semi-annual results were released.