KUALA LUMPUR (May 21): A comeback in storage drive demand has helped JCY International Bhd (KL:JCY) return to the black in the second quarter ended March 31, 2024 (2QFY2024) after eight straight quarters of losses.

The storage drive component supplier and contract manufacturer logged a net profit of RM5.35 million for the quarter, versus a net loss of RM25.28 million for 2QFY2023, on the back of a rise in demand for both hard disk drives (HDD) and solid-state drives (SSD), coupled with an improved cost structure, according to the group in a bourse filing on Tuesday.

“The improved cost structure and higher customer demand driving higher factory capacity utilisation resulted in our first net profit quarter since December 2021 (1QFY2022),” said JCY International. "This result is even more significant, given that the group’s capacity utilisation was still less than 50% in the reporting quarter (2QFY2024).”

The rise in storage drive demand saw JCY International’s revenue rise 40.65% to RM147.15 million for the three months compared with RM104.62 million a year ago.

The return to profit in 2QFY2024 also resulted in the group returning to the black for the six-month cumulative period, with a net profit of RM2.7 million in contrast to a net loss of RM57.35 million for the same period a year earlier.

Cumulative top line increased 26.87% to RM273.86 million, from RM215.86 million previously.

Stronger quarters seen ahead

JCY International noted that the total HDD storage market showed a 3% quarter-on-quarter (q-o-q) rise in units shipped, and a 22% q-o-q rise in total storage capacity shipped — marking the second consecutive quarter the industry has seen an HDD shipment increase.

Based on this market trend, the group expects to fare even better in the second half of the year. It is projecting its factory capacity utilisation rate to increase, as its customers see improvement in the units shipped.

“Our short- to medium-term strategy remains to strengthen our core in the storage industry while diversifying into other industries,” JCY International said.

“We remain focused on growing our portfolio. We strongly believe that being vertically integrated in mould making, casting, machining and coating gives us a strategic advantage in the industry to capitalise on the disruption in the supply chain driven by the world’s geopolitical tensions,” it added.

The group said it is working with new customers in product qualification, and expects the process to take two to four years before it matures.

Shares in JCY International ended unchanged at 39 sen on Tuesday, valuing the group at RM818.52 million. The stock has been on the rise over the past month, climbing 56% from April 29’s close of 25 sen. Year to date, the counter has gained 77.27%.