Both Seagate and WD guided their upcoming report would be ugly. I think the investors should look for the sign of bottom in the upcoming earnings call.
Gross profit is back to 20%+ ish, fcf is at 22 million and the net profit is flat. Financially it looks terrible and the current valuation (PE ratio) does not make sense to anyone. There are a few things to note from this earning report: 1. The result same as what the management guided us in the last quarter earning report. 2. The bleak result is aligned with Seagate and WD weak HDD revenue in Q3.
Although the prospect written by DUFU looks meh to me, but I think they tend to sound pessimistic so that no high hope will be given. In my opinion, they prefer not to over-promised. WDC and Seagate just had their earning calls not long ago. Both of them guided that the nearline HDD inventory adjustment of their cloud customers are coming to the end.
Please allow me to quote a statement made by the CEO of WDC: Aaron Rakers -- Wells Fargo Securities -- Analyst OK. And then as a quick follow-up, I'm just curious on the hard disk drive business. I know the cloud revenue in total was down consistently again quarter over quarter. Just how would you characterize what you're seeing from a nearline perspective from the cloud? Have you started to see demand pull again? Just any kind of context of how you're thinking about the shaping of kind of a recovery here as we move forward.
David Goeckeler -- Chief Executive Officer Yeah. We think this past quarter was the bottom, Aaron. And we see improving demand as we move throughout the fiscal year on a quarter-over-quarter basis. We've had certain customers that have been on the sidelines for a while, and they're starting to come back and give us visibility into ordering.
So, we expect the market to recover from here going forward.
Although there will be a lagging period, but the recovery of nearline HDD for WDC has been started in Q4 this year. Let's see how the market will react to Q3 earnings report of DUFU.
Dead cat bounce, chance to get out. Don't hold on to a company facing obsolescence. Dufu is facing existential risk in the long run. Remember Nokia and Xerox... All died due to technological obsolescence. Smart investor must be willing to look far. Will HDD still be used 10 years later with SSD getting better and cheaper each year??? Be honest to yourself... Don't say I never warn you all. Peace.
Let's admit it, it is an act of a fool to predict stock price fluctuation. But one thing that we can predict is the long term performance of the company that we bought. DUFU is definitely one of those companies that is worth to hold for a long term.
Happy weekend folks and happy deepavali to those celebrating! Since I got nothing better to do, I spent hours curating a video for more fair assessment on dufu and how Mr. Lee Hui Ta can charter their next progress. Any long term holders of dufu, please watch and recalibrate your position if necessary. YT video on my channel :- https://youtu.be/WAAeNLF8zJ8
Both Seagate and Western digital guided sequential recovery for their HDD businesses. Coupled with TSMC strong guidance this year, Dufu is a gem waiting to be discovered.
Q4'23 for Dufu is definitely a QoQ and YoY growth. The downside is capped... Let's see how the market will react to this. The short term fluctuation is a cost that investors will need to pay if he wants to enjoy the upside.
The recession for HDD was bottomed in Q3'23 and the recovery started in Q4'23. The amount of HDD shipments does not matter to Dufu since it is a niche player which benefits the most when the exabyte shipped increases.
I made a mistake in the previous thread where I said Q4'23 is definitely a QoQ and YoY growth. The answer is I don't know and was being ego to say something like this.
Being a contra investor requires a lot of patience and conviction to see the thesis to be played out. The market is being quite ignorant to the fact that nearline HDD demand is on uptrend again... They underestimate the demand for large capacity HDD due to AI introduction...
Seagate HAMR Moziac disk will not treaten Western Digital nor Toshiba nearline HDD... UltraSMR will continue to win market share... This is because CSPs are not asking for certain technology, but looking forward to products that can deliver the best TCO. There will be 1 million HAMR HDD to be shipped in this first half... 30TB HAMR has 10 disks... 10 disks with 9 ring spacers...
Both WD and Seagate are guiding better Q2 results, primary driven by HDD demand... I am quite certain that Dufu will deliver a better than expected result in Q4'23, and a better prospects guidance...
Although their spacer ring division will not be growing as they used to be... Their next growth leg will be coming from metal stamping and fabrication division... They invested a lot in China... Dufusion bought a land at Bukit Minyak for future expansion... They are moving the profits from HDD to other divisions...
Seagate transcript: We enter calendar 2024 with increased confidence in our non-GAAP gross margin trajectory, including our ability to reclaim 30% minimum benchmark level at quarterly revenues that are at least 20% below our prior cyclical peak. From a demand standpoint, gradual recovery within the U.S. cloud market has started to take shape, reflecting solid progress in consuming excess inventory, along with more stable end-market behavior. Enterprise OEM demand trends have also stabilized within the U.S. markets. Customer feedback still points to macro-related concerns, although IT hardware budgets are projected to modestly improve in calendar 2024, and traditional server growth is expected to resume trends that support incremental HDD demand growth in the calendar year.
We were also encouraged to see incremental demand among certain non-U.S. cloud and enterprise customers in the December quarter. Across the broader China markets, we project a relatively slower pace of recovery given the ongoing economic challenges within the region. However, some local governments announced further steps to support the region's economy, which our customers believe will bolster local demand across mass capacity markets in China in the second half of the calendar year.
WDC earnings transcript: Turning to HDD. The sequential revenue increase was driven by improving nearline demand and pricing. Moreover, we are encouraged by demand in China with revenue doubling on a sequential and year-over-year basis, both of which were ahead of our expectations. We anticipate year-over-year growth in HDD throughout this calendar year. . . . At the end of the fiscal second quarter, cash and cash equivalents were 2.5 billion and total liquidity was 4.7 billion, including the undrawn revolver capacity of 2.25 billion. For the fiscal third quarter, our non-GAAP guidance is as follows: We expect revenue to be in the range of 3.2 billion to 3.4 billion. We expect sequential revenue growth to be mainly driven by an increase in HDD. We anticipate flash revenue to be up slightly as we remain focused on optimizing bit shipments and ASP.
The more I shout, the more it drops. Maybe it's doing CNY sales. Maybe I'm so wrong. Maybe the upcoming QR is awful. Maybe... Let's focus on the fundamental rather than the stock price movement...
Looking at price and capacity trends, at what year SSD will surpass HDD in terms of price per gigabyte storage?
Predicting the exact year when SSDs will surpass HDDs in terms of price per gigabyte is challenging due to various market factors. However, several indications suggest this shift may happen sooner than initially expected: Industry projections: FDI Consulting: Estimates SSDs to become cheaper than HDDs on a dollar-per-terabyte basis by 2026. Wikibon: Projects consumer-grade flash SSDs to surpass HDDs in cost per gigabyte by 2026. TrendForce: Believed a NAND flash memory oversupply in 2022 could have caused SSD prices to drop by 20%, further accelerating the trend. Current trends: SSD prices have been steadily declining over the past decade due to advancements in flash memory technology and manufacturing efficiencies. HDD prices have remained relatively stable or even increased slightly in recent years. Demand for SSDs is increasing rapidly, fueled by their performance and reliability advantages. Caveats: NAND flash memory shortages could temporarily slow down the price decline of SSDs. HDD manufacturers may introduce new technologies to improve their cost-efficiency. Market forces such as trade wars or economic fluctuations could impact pricing. Overall, While an exact year is difficult to pinpoint, the evidence suggests SSDs surpassing HDDs in cost per gigabyte is likely within the next few years (2024-2026). The specific timeline will depend on the factors mentioned above.
Ok, let's put our money on bet. I suggest you to try to short STX which is listed on Nasdaq. Their main revenue (>80%) is coming from HDD. Instead, I will long Dufu & STX, see who's return is higher in the next 5 years. If what you said is valid, you should be very profitable by shorting STX.
The cost per GB of a large capacity HDD is cheaper by 7x or even more than a large capacity SSD. So when you think SSD will replace HDD in data center? Do you know >80% of data in the hyperscale conventional data center are stored in HDD?
You believe in what the predictors are saying, but too blind to see what's the "CURRENT TREND". What I witness is that nearline HDD is going to recover throughout this whole calendar year. This is align with what Western Digital and Seagate are guiding. For your information, Western Digital manufactures NAND flash memory as well.
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Posted by yong1985cm > 2023-08-02 17:36 | Report Abuse
what a bad result. the mgm expect the worst is yet to come