Darfon Energy (8163) held an earnings conference today (5th) and announced its second quarter financial report, with a net profit of NT$172 million after tax, a quarterly growth of 19.7%, and EPS of NT$0.62. Revenue for the first half of the year was NT$10.309 billion, net profit of NT$316 million after tax, and EPS of NT$1.14. Looking ahead, Delta Energy said that the current IT visibility is more certain, and the second half of the year will definitely be warmer than the first half. In the green energy sector, which is mainly bicycles, inventory liquidation continues and may continue until the middle of next year, so the momentum is relatively conservative, but the company continues to optimize its green energy product portfolio and increase the proportion of component products with higher gross profit margins.Overall, the company believes that the overall revenue performance in the second half of this year is expected to be better than the first half of the year driven by IT. Darfon said that in the second quarter, the demand for education tenders and high-end business models from NB/PC customers continued to increase, driving the quarterly revenue growth of keyboard products by more than 15%, and the annual growth rate also increased simultaneously. The green energy business, which focuses on the development of electric assisted bicycles (E-Bike), is still affected by the inventory factors of end customers and needs to be adjusted in the short term.

However, the company's recent investment in Germany's GROFA will be completed in the fourth quarter and join the ranks of operations, which is expected to add momentum to the green energy business. Darfon pointed out that in the long run, NB/PC will help keyboard and other new product shipments to increase steadily with the upgrade of Windows operating system and the increase in AI PC penetration. The green energy business is confident of future growth under the three global trends of E-Mobility, environmental protection and sports. Regarding the inventory clearance and demand situation of green energy, Darfon said that currently there is still considerable pressure on inventory from both customers and the supply chain, and it is expected that this year will still be in the inventory clearance stage. Some customers have already started new projects, but the overall project opening volume is still somewhat lower than before the epidemic. Darfon said that judging from the European exhibitions and customer feedback, the time for green energy inventory clearance will be extended to the middle or second half of next year. Green energy products are facing headwinds, and their share has also dropped from a peak of 47% to about 30% at present. However, at the same time, the company has also adjusted the proportion of assembly with lower gross profit margins and increased the proportion of components with higher gross profit margins, such as battery modules and frames. It is expected that as the industrial order gradually recovers next year, the company's green energy revenue share is expected to increase from the current 30% to 30-40%, but it still depends on the speed of overall market recovery.