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ASML released its second quarter 2024 financial report (as of June 2024) before the US stock market opened at 20:00 on the afternoon of July 17, 2024 Beijing time. The key points are as follows:

1. Core data: Revenue and gross profit margin are both better than expected.ASML to achieve in the second quarter of 2024Revenue was 6.24 billion euros, better than market expectations (6 billion euros).Revenue rebounded this quarter, mainly due to the increase in cargo from customers in mainland China and South Korea.Net profit was 1.578 billion euros, down 18.7% year-on-year,Better than market expectations (1.45 billion euros)The company's gross profit margin has been rising steadily, and the revenue side is the main factor affecting the company's performance this quarter.

2. Business status: EUV and ArFi are the main sources of revenue.System sales revenue is still the company's main source of revenue, accounting for more than 70% of the company's revenue. Due to the high unit price of EUV, it is an important factor affecting the company's performance.Affected by the relatively low EUV shipments recently, the company's revenue and performance have not yet completely recovered from the trough.。

3. Revenue performance by region: Mainland China accounts for half.Although affected by regulation,However, the revenue share of mainland China still remains in the first place, which is mainly due to the impact of counter-cyclical expansion of production. Mainland China has increased the demand for ArFi and ArF Dry.South Korean customers' purchases have returned to normal, while TSMC's purchases are still at a relatively low level.

4. ASML's performance guidance: In the third quarter of 2024, the company expects revenue of 6.7-7.3 billion euros (market expectation is 7.45 billion euros) and gross profit margin of 50-51% (market expectation is 51.12%).Although the company's revenue is expected to increase in the next quarter, it will still be lower than market expectations.

Overall: ASML's financial report data for this quarter is not bad, but the guidance for the next quarter is relatively weak.

This quarter's financial report data:The company's revenue and gross profit margin this quarter were both better than market expectations, mainly due to the recovery of orders from customers in China and South Korea. In addition, affected by capital expenditures, shipments to TSMC are still relatively low.

Looking at the company's guidance: the company expects revenue of 6.7-7.3 billion euros in the third quarter of 2024 (the market expects 7.455 billion euros) and a gross profit margin of 50-51% (the market expects 51.12%).Driven by the AI, storage and other industrial chains, although revenue will pick up on a month-on-month basis, it will still be lower than market expectations.

During a relatively downturn in the semiconductor industry, counter-cyclical production expansion in mainland China has become the company's largest source of revenue.If the United States and other countries continue to increase trade restrictions on the semiconductor sector, the company's performance may be relatively significantly affected.

Overall, Dolphin believes that although the financial report data is not bad, the company's guidance is not as good as expected, which directly affects the market's confidence in the company. In addition, the market also has some concerns about the United States and other countries continuing to impose further trade restrictions in the semiconductor field. In the short term, the company's stock price already includes the incremental expectations brought by AI, and this weak guidance and market concerns will affect market confidence. In the medium and long term, the real improvement in the company's performance still requires core customers to increase their expectations for capital expenditures, thereby driving the growth of shipments of advanced products such as EUV.Waiting for any possible incremental information on capital expenditures in Dolphin's comments on TSMC's financial report tomorrow.

The following is Dolphin Jun's specific analysis of ASML:

1. Core data: Revenue and gross profit margin, both better than expected

1.1 Revenue: ASML achieved revenue of 6.24 billion euros in the second quarter of 2024, which was better than market expectations (6 billion euros), and quarterly revenue began to pick up.Revenue this quarter increased by 18% month-on-month, mainly due to the recovery in cargo demand from Korean customers.

1.2 Gross profit and gross profit margin: ASML achieved a gross profit of 2.697 billion euros in the second quarter of 2024, a year-on-year decrease of 9.4%.In terms of specific gross profit margin, the companyGross profit margin was 51.5%, a slight increase and better than market expectations (50.6%)ArF equipment shipments increased significantly this quarter, contributing to the company's gross profit margin recovery.

1.3 Operating expenses: ASML's operating expenses in the second quarter of 2024 were 1.378 billion euros, an increase of 8% year-on-year.

Specifically:

1) R&D expenses:R&D expenses for the quarter were 1.1 billion euros, up 10.1% year-on-year. The R&D expense ratio remained at 22.1%, and the company's R&D investment increased slightly, remaining relatively stable.

2) Sales management and administrative expenses: Sales and administrative expenses were 277 million euros this quarter, down 1.5% year-on-year; the sales and administrative expense ratio was 4.4%, maintaining in the range of 4-5%.

1.4 Net profit: ASML's net profit in the second quarter of 2024 was 1.578 billion euros, a year-on-year decrease of 18.7%, exceeding market expectations (1.45 billion euros).Although the company's performance is still declining this quarter, it has rebounded on a month-on-month basis, mainly due to the increase in cargo demand from customers in mainland China and South Korea, which has driven the company's revenue growth.

2. Detailed data: Mainland China accounts for halfASML's business consists of two parts: system sales revenue and service revenue.Among them, system sales revenue accounts for more than 70%, which is the company's core source of income.

2.1 Business Situation

1) System sales revenue

ASML's system sales revenue reached 3.761 billion euros in the second quarter of 2024, down 15.1% year-on-year.The year-on-year decline in system sales was mainly due to the decrease in shipments of lithography systems.Although shipments to customers in mainland China have increased significantly, TSMC's demand remains at a low level this quarter.Due to the slowdown in EUV shipments,The company's average shipping price for lithography systems fell to around 47.6 million euros this quarter.。

2) Service income

ASML's service revenue reached 1.482 billion euros in the second quarter of 2024, a year-on-year increase of 14.3%.ASML's service revenue mainly includes equipment maintenance and other projects, and its business revenue is more stable than system sales.

2.2 Income by Region

The revenue from mainland China accounts for nearly 50% and is still the company's largest customer this quarter. This is mainly due to the demand for production expansion from customers in mainland China, which has increased the continuous demand for products such as ArFi and ArF Dry.

Compared with the first quarter, the revenue of the company's other two major customers (TSMC and South Korea) also increased this quarter. Among them, the revenue of South Korean customers returned to the normal level this quarter, while TSMC's demand for goods was still at a relatively low level this quarter, still affected by relatively conservative capital expenditures.