HG Semiconductor Limited (6908.HK) Q2 2025 Earnings Report

HG Semiconductor’s QQ2 2025 results show a material top-line improvement with revenue of 33.061 million CNY, up 93.05% YoY from 17.126 million CNY in QQ2 2024, suggesting renewed demand or volume ramp in LED-related products and subcontracting services. Despite the revenue uptick, the company remains loss-making for the quarter, recording an EBIT of -87.592 million CNY and a net income of -59.293 million CNY, with EBITDA of -55.410 million CNY and an EBITDA margin of -1.68%. Gross profit was 3.214 million CNY on 33.061 million CNY of revenue, yielding a gross margin of 9.72%, significantly below typical LED/module peers and signaling ongoing cost structure and product-mix challenges. The balance sheet remains liquidity-rich and conservatively levered, with a current ratio of 6.47, quick ratio of 5.18, cash ratio of 1.056, and a debt ratio of 0.0313 (debt/equity 0.0362). This provides a cushion to fund ongoing investments and potential restructuring without near-term refinancing risk. However, the company exhibits a long cash conversion cycle (CCC of 329.01 days), very negative free cash flow per share (-0.0562 CNY), and negative operating cash flow per share (-0.0412 CNY), implying ongoing cash burn tied to high operating and overhead costs relative to the current revenue level. Management commentary is not accessible in the provided transcript data, so formal quotes or guidance from the earnings call are not included. Given the material loss level and the scale of operating expenses, investors should monitor cost-reduction initiatives, gross-margin recovery potential through product mix shifts, and any announced capex rationalization or efficiency improvements in H2 2025.