KUALA LUMPUR (May 8): Dufu Technology Corp Bhd’s (KL:DUFU) net profit for the first quarter ended March 31, 2024 (1QFY2024) fell by 59.3% year-on-year to RM4.43 million or 0.8 sen per share from RM10.88 million or 2.1 sen per share mainly due to a drop in revenue and higher overhead costs.

Quarterly revenue shrank by 22% to RM57.86 in 1QFY2024 million from RM74.18 million a year ago.

Dufu explained that the drop in revenue was due to the lower sales in its hard disk drives (HDD) components, in which the group said it is navigating the tail-end of an unprecedented downturn in the storage market.

"However, within our key operational domains — precision machining of hard disk drives and production of sheet metal and stamping equipment and components — we are witnessing a modest increase in demand," Dufu Tech said in a bourse filing on Wednesday.

Looking ahead, Dufu Tech said the group believes that global semiconductor sales are picking up and, coupled with a resurgence in the memory sector, will see a potential onset of a new growth cycle, especially among local manufacturers.

"This positive momentum is supported by the conclusion of inventory adjustments and heightened demand in electronics and AI-related [artificial intelligence] applications," it said.

"As we navigate the dynamic market landscape, we are confident that the toughest phase is now behind us, and we remain dedicated to seizing these growing opportunities, aiming to cultivate sustained growth for the group," Dufu Tech added.

Its shares dropped 11 sen or 4.76% to close at RM2.20 on Wednesday, as its market capitalisation stood at RM1.2 billion.