Qisda Corp
TWSE:2352
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Qisda Corp
Earnings Call Analysis
Q2-2024 Analysis
Qisda Corp
Qisda Corporation reported a revenue of TWD 49.9 billion for the second quarter of 2024, an increase of TWD 2.9 billion or 6% from the previous quarter. This shows a recovery trajectory after experiencing seasonal challenges, indicating that the company is navigating through a phase of inventory adjustment and market fluctuations.
The company's operating income rose to TWD 1.18 billion, representing a significant jump of 28% quarter-over-quarter (Q-o-Q). More impressively, net profit attributable to Qisda surged by 158%, reaching TWD 0.66 billion, with earnings per share (EPS) rising to TWD 0.34, which is TWD 0.21 higher than the prior quarter. This points towards an effective cost management strategy and operational efficiency improvements.
Qisda achieved a gross margin of 16.7%, an increase of 0.7 percentage points Q-o-Q, marking the highest this figure has been in 20 years. This consistent margin improvement over five consecutive quarters reflects the company's ability to maintain pricing power despite market pressures.
The IT business group drove significant revenue growth, with a TWD 27.4 billion contribution, up 9% Q-o-Q. The medical business also performed well, generating TWD 6.4 billion, marking a 9% increase as major breakthroughs in overseas markets became evident. However, the Networking and Communications Group (NCG) faced headwinds due to inventory digestion, although some recovery is expected in the latter half of 2024.
Looking forward, Qisda anticipates that the third quarter will traditionally be a peak season. The management expressed optimism about revenue and net income returning to a growth trajectory for the latter half of 2024. Specifically, they aim for continued revenue increases across all business lines, particularly within the IT segment where further growth is projected due to an expected rise in orders.
Qisda's management acknowledged ongoing supply chain challenges, particularly in the U.S. and European markets. They emphasized the importance of inventory levels, which they expect to normalize in the coming quarters, thereby freeing up cash flows and enhancing stock replenishment efforts. Investments in emerging markets, particularly India and Vietnam, are part of their strategy to leverage growth opportunities.
The company reassured stakeholders about its dividend policy, aiming for a payout ratio above 50%. While they cannot guarantee a dividend above TWD 1.5, they remain focused on generating sufficient earnings to enable sustained capital returns to shareholders.
Overall, Qisda has shown resilience in facing market challenges while positioning itself for future growth. The execution of strategic initiatives across its robust portfolio indicates confidence in overcoming obstacles. Investors should look ahead to the third quarter as a potentially robust period based on management's assertions and ongoing operational improvements.
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Hello, investors, good afternoon. Welcome to Qisda Corporation 2024 Results of the Second Quarter Investor Conference. This conference is chaired by Chairman of Qisda Corporation, Peter Chen; and President, Joe Huang; and CFO, Jasmin Hung, also invited GM of each business group. Joined by GM of Information Technology Business Group, Daniel Hsueh; GM of Commercial and Industrial Business Group, Yuchin Lin; GM of Medical Business Group, Harry Yang; GM of Business Solutions Business Group, Joshua Tzeng; GM of Networking and Communications Business Group, April Huang; and our CIO, Michael Wang.
Today's conference is estimated to take 1 hour agenda is as follows. First, Jasmin, CFO will bring us the financial results of the second quarter of 2024, followed by Chairman, Peter Chen and our President, Joe Huang, to bring us the business update and outlook, followed by GM of each business group to give us the results and briefing. Later, we will enter Q&A session. [Operator Instructions].
Before we commence, we want to remind you to pay attention to the Slide 4. Safe harbor notice as content contains forward-looking statements subject to risks and uncertainty. Please spend some time to read through the content on Slide 4. Thank you.
Next, we will hand over to CFO, Jasmin to bring us the second quarter financial results of 2024.
Hello, investors. I am Jasmin. I will introduce Qisda Group. Qisda is a group with business spending information technology, medical smart business solutions and networking communication. We are a global technology group. We established in 1984. IPO year 1996, ticker number 2352. In 2024, we have won award regarding sustainability. We have won consecutively 6 years of HR Asia Best Company to Work for and AREA awards for 2 consecutive years. And FinanceAsia, Asia's best company. For Global Presence, manufacturing sites located in Taiwan, China and Vietnam. Sales offices more than 200 worldwide. R&D sites located in Taiwan and China, number of employees are more than 26,000 people. Revenue breakdown, Asia account for 53%, Americas account for 27%, Europe 19%, other 1%.
Next slide. This is our business groups. The purple blocks are our high value-added business groups. The green color are our original business group. IT business group in the first half, revenue reached TWD 52.6 billion account for 54%. Medical, BSG and NCG revenue reached over TWD 10 billion. Medical, TWD 12.3 billion. We have 2 hospitals Nanjiang and Suzhou BenQ hospitals. And we also offer medical management consulting services. And we also have product equipment and consumables, operation tables, surgical light, ultrasound, intraoral scanner and dentistry consumables. And in recent years, we actively distribute dialyzer market, we also offer streamlined services.
In BSG Group, we also offer total solution integrate software and hardware. Focus on IT intelligence services, which include AI computing, cybersecurity, edge to cloud integration and digital transformation. Also, OT intelligent services focus on green energy, automation and industrial computer and integration of OMO Solution services. In NCG Business Group, we focus on 5G and low earth orbit satellite. Others, we have material services other than polarizer. We also offer functional film and battery products. For key investments, we have equity methods, Darfon, Norbel Baby, which is tinting drugstore and Rapidtek, low earth orbit satellite and Topview and FVOCI, we have AUO.
Let's take a look at 2024 second quarter financial results. Let's look at the highlights. In the second quarter, the revenue and profits grew on Q-o-Q basis. Revenue reached TWD 49.9 billion, up by TWD 2.9 billion Q-o-Q, up by 6%. Operating income, TWD 1.18 billion, up by TWD 0.26 billion Q-o-Q, up by 28%. Profit attributable to Qisda, TWD 0.66 billion, up by TWD 0.41 billion, up by 158%, EPS TWD 0.34, up by TWD 0.21 Q-on-Q. Other than that, our gross margin also reached 16.7%, up by 0.7 percentage points Q-o-Q, surpassed 16% for 5 consecutive quarters and highest in 20 years. Other than that, our OP income margin also reached 2.4% risen for 2 consecutive quarters.
Let's look at business group performance. IT business revenue reached TWD 27.4 billion Q-o-Q, up by TWD 2.2 billion, up by 9%. IT revenue and gross margin and OP income margin has grown since -- has hit the highest since the first quarter of 2023. IT original revenue grew 9% Q-o-Q. Gross margin, OP income margin and OP income amount grew on Y-o-Y on QoQ basis.
For IT, high value-added business group, revenue grew 4%, and gross margin -- OP income margin and OP income amount grew on a Q-o-Q basis. And higher than the previous 2 quarters. High value-added business group revenue reached TWD 22.8 billion Q-o-Q up by TWD 1 billion, up by 5%. The major growth momentum come from Medical Business Group revenue grew 9% now with that, gross margin and OP income amount also increased on Y-o-Y and Q-o-Q basis. NCG revenue grew 10% Q-o-Q. However, impacted by inventory digestion, gross margin and OP income margin decreased on a Y-o-Y, Q-o-Q basis. BSG, revenue slightly decreased by 1% Q-o-Q due to revenue scope decrease.
Gross margin and OP income margin also decreased on a Y-o-Y and Q-o-Q basis. First half results, revenue, TWD 96.8 billion Y-o-Y down by TWD 5.8 billion, down by 6%, mainly because NCG and BSG suffered from the adjusting inventory level and low oversees market demand. For IT and Medical Business Group continued to grow in the first half Net profit attributable to Qisda TWD 0.92 billion Y-o-Y, down by TWD 0.43 billion. The revenue scope decrease, even gross margin increase.
The operational cost remained flattish and hence, the profitability decrease. However, in the first half, gross margin reached 16.4% Y-o-Y up by 0.3 percentage point hit highest in the same period in 20 years. For the past quarters, we've seen that demand for display continued to grow. Revenue was TWD 36.1 billion, up by 7% Y-o-Y, up by TWD 2.3 billion. Also, gross margin and OP income margin and OP income amount grew on a Y-o-Y basis.
Let's take a look at consolidated statement of comprehensive income. The second quarter compared to the far right, the first quarter of this year, revenue of TWD 49.8 billion, up by TWD 2.9 billion, up by 6%. Gross margin, 16.7%, up by 0.7 percentage point, gross amount up by 11%. OP income, TWD 1.185 billion. OP income margin, 2.4%, up by TWD 258 million and up by 28% Q-o-Q. Non-OP income compared to last year's period, up by TWD 283 million. OP and non-OP income grew on a Q-o-Q basis. Therefore, net income attributable to Qisda grew by TWD 0.4 billion, up by 158% EPS, up by TWD 0.21. On a Y-o-Y basis, revenue down by TWD 2.2 billion, down by 4% Y-o-Y as we have mentioned, NCG and BSG are on downward trend and IT and Medical Business Group are on upward trend thanks to gross margin up by 0.4 percentage points.
Therefore, gross amount only slightly decreased by TWD 0.17 billion, down by 2% Y-o-Y. Although OP expense only up by TWD 80 million. OP income down by TWD 258 million. Non-OP income last year enjoyed one-off comparative interest, so down by TWD 502 million Y-o-Y. Net income attributable to Qisda down by TWD 361 million EPS, down by TWD 0.18 Y-o-Y.
Let's take a look at first half consolidated statement of comprehensive income. Revenue reached TWD 96.8 billion compared to last year's same period, down by TWD 5.7 billion, down by 6%, mainly because NCG down by TWD 4.8 billion, BSG down by TWD 1.6 billion. And IT and Medical Business Group are gradually growing. Gross margin in the first half, 16.4%, up by 0.3 percentage points Y-o-Y, OP expense slightly increased TWD 18 million. OP income, down by TWD 681 million, down by 24%. Net income attributable to Qisda down by TWD 428 million, EPS TWD 0.47, down by TWD 0.22 Y-o-Y.
Consolidated balance sheet highlights. Let's take a look at total assets reached TWD 195.8 billion total liability, 67% compared to the first quarter. 68%, slightly down by 1 percentage point. Inventory level, TWD 38.9 billion, up by TWD 2.2 billion on Q-on-Q basis, account payable TWD 32.5 billion, up by TWD 4.6 billion Q-o-Q. The account payable and inventory are prepared for the third quarter growth momentum and inventory mainly located in DMS and design manufacturing services to stack up for third quarter. Account receivable up by TWD 1.6 billion. This is because of the growth in second quarter is higher. Cash decreased by TWD 6.6 billion and financial debt down by TWD 5.1 billion. This is the financial arrangement. The first half book value per share reached TWD 18.94.
Okay. Let's take a look at the financial ratios. No major changes account receivable turnover remains 74 days, inventory turnover 87 days, account payable turnover of 71 days, cash conversion cycle 90 days, down by 3 days Q-o-Q, down by 7 days Y-o-Y.
Let's take a look at financial trend on quarterly trend. Focus on gross margin and OP income margin. Let's take a look at lower left, we can see the gross margin. It has reached more than 16% for 5 consecutive quarters, since the second quarter of last year, now reached 16.7%. And OP income margin, you can see the fourth quarter and last year in the third quarter this year, we have met trough. And in the second quarter, it has returned to more than 2%. On the upper right, we can see the OP income. We can also see the trials happen in the fourth quarter of last year and the first quarter of this year. And in the second quarter of this year, the revenue reached more than TWD 1 billion. And this slide is financial trend. Is the second quarter performance comparison, please refer to content.
Let's take a look at Business Group revenue trend, quarterly trend. The purple block or high value-added business revenue in total. Let's take a look at medical. Revenue reached TWD 6.4 billion. The first quarter due to the impact of Lunar New Year, the revenue was lower than TWD 6 billion but that was an exception. For BSG, impacted by slow demand from overseas market and inventory digestion. Revenue down from TWD 8 billion to TWD 7 billion. NCG, also impacted by inventory digestion, revenue reached TWD 5.7 billion. IT HVA, we have reached more than TWD 3 billion for 3 consecutive quarters. IT original, in the second quarter, it has reached highest in -- compared to the past 6 quarters. And in the second quarter it reached TWD 24 billion and keep growing.
Let's look at financial highlights by business group. On a Y-o-Y basis, gross margin range for the business group that has across 1 range. Let's look at Medical Business Group. It has grown one range on gross margin performance, both on Y-o-Y and Q-o-Q basis. Also, IT high value-added business group. Gross margin range up by 1 range on a Q-o-Q basis. Others remained flattish. For the revenue breakdown by business quarterly, please look at the content on Slide 18.
Okay. Let's take a look at listed companies' results comparison between first half and last year first half, we can see better and weaker performances in IT business group, data image and similar both revenue and net income are on downward trend. Medical enjoyed better performance. Revenue, net income are increasing. BenQ Medical Tech revenue grew and net income grew even more. ConcordMed revenue up by TWD 30 million, net income up by TWD 4 million.
For BSG Business Group. Partner Tech revenue grew by 5%, net income also hit highest in the same period in the past 2 years, and we can see a significant difference. MetaAge revenue down by 5%. Net income down by 50%. MetaAge, the performance in Taiwan market is actually not bad, but overseas inventory digestion affect the overall performance. NCG, IDT grew -- revenue grew and net income also grew and hit highest in the same period in the past 4 years. Alpha Network and Hitron revenue and net income both decreased.
Investors and friends from press media. Good afternoon. I am Chairman of Qisda Group. Peter Chen, time flies. We have reached the second quarter of Investor Conference. Looking back, last quarter, we have reported -- we are holding the thought for the trend on revenue and profit should come back quarter by quarter, as Jasmin shared on revenue and profit. We are heading towards -- to a better performance compared to the first quarter. And of course, the growing slope is not as good as we expected. Revenue grew from TWD 46 billion to TWD 49.9 billion, grew by TWD 3 billion. EPS grew from TWD 0.13 to TWD 0.34 Q-o-Q and the first half, EPS reached TWD 0.47 and last year, TWD 0.69.
And we hope in the third quarter, we can reach our original performance, the revenue and net income can come back on a growing trend. And we have confidence this year. This is because the first half continued the momentum of last year second half. And we can see that the second half of this year, revenue and net income are slowly, slowly improving in the second half of this year. In the last investor conference, we have also mentioned in 2024, Qisda Group revenue and net income. We hope the general performance should be better than last year.
This is our observation for the entire economic performance. We will be prudent, but also optimistic to moving toward to a better performance and hope to give better results than 2023. And for the overall perspective, I provide my personal perspective and observation to share with investors and friends from press media. For the detailed information I will have Joe and GM of each business group to give you an update and outlook. And after that, we will answer the questions submitted by our participants.
I will hand over the microphone to Joe, our President. Thank you.
Hello. I'm President, Joe Huang. Here is to bring you the third quarter outlook. The overall economy is gradually recovering and global economic is affected by U.S. presidency election and timing of interest rate cuts, that will be our future crucial indicator. In general, IT business is coming back slowly, consuming market is coming faster, commercial market is coming slower and industrial product should come back -- for commercial products should come back quarter-by-quarter, and industrial computer has met the trough. And we expect to see the pickup for NCG suffering from the inventory level digestion in Europe and Americas business, and we will seize the business opportunity in emerging markets.
For Medical Business Group, medical hospital operation is growing optimistically, and listing application is also on our right path for medical consumables and devices continue to expand overseas. For NCG, due to inventory level digestion, we will accelerate in developing opportunities in emerging markets and anticipate the first shipment by the end of the year. Entire IT business, the third quarter is traditionally the peak season and sales volume is expected to increase on a Y-o-Y and Q-o-Q basis. That will be the third quarter outlook.
For investment, we keep -- being lean and focused and keep putting efforts and other than original business group efforts, we also put effort in ESG and sustainability, and we have also won awards that will be reflecting our efforts. Our grand fleet, we have won 15 awards in the first half of 2024. We have won HR Asia Best Company to Work for, for 6 consecutive years. We have won AREA Corporate Sustainability Report Award for 2 consecutive years and TSAA 3 awards. And on Computex, our both design won the first sustainable design award, gold medal.
And for sustainability development, we have some results we want to share with you. For the sixth Taiwan Sustainability Action Award, we have won 4 awards, 1 gold, one silver and 2 bronze and the 6 Taiwan Corporate Sustainability awards. We have also won Platinum Award for sustainability report. For the detailed award, please refer to the slides.
Let's welcome GM of each business group. First, Daniel, GM of ITG.
Hello. I'm Daniel. I'm responsible for ITG Business Group. I bring the second quarter highlights. The second quarter is traditionally the off-season. Global display market sales performed -- remain flattish. The commercial display market is suffering from weak revival strength. Sales to Qisda major customers does not meet our expectation. So the sales development, the second quarter slightly decreased. However, as we have better product portfolio, the revenue is on an upward trend. And the third quarter outlook, we anticipate the revival strength in global display market in the third quarter won't be strong enough. However, demand for commercial display should gradually recover and begin an active replenishment. Hence, we set our goal for the third quarter that Qisda display sales amount grow on Q-o-Q and Y-o-Y basis.
Next, Yuchin Lin GM of CIG.
Hello, everyone. I'm Yuchin Lin, GM of CIG for the second quarter highlights, the entire second quarter revenue and profit both grew in 2 digits on Q-o-Q basis. Demand for projector has continued to come back, continued material replenishment and shipment contribute to 2-digit growth on a Q-o-Q basis. Industrial and commercial new mass production model are in shipment, such as graphic tablets and post-machine successively with good market receptivity and enjoy growth on Q-o-Q and Y-o-Y basis.
Automotive module shipments, the new vehicle model is adopted by our clients. So it is beyond anticipation and grew on Y-o-Y and Q-o-Q basis. The third quarter outlook, new mass production devices are well received in the market, we anticipate to see each business unit's revenue to grow on Y-o-Y and Q-o-Q basis. For new projector model, for European customers are shipped in July. We anticipate to see good market responses and more orders to be placed. And for industrial and commercial products for U.S. clients, the outdoor golf sets and touch display screen are also in good progress. At the end of this year, we will produce the new CPU module, and we will increase our capital expenditure for manufacturing.
Thank you. Next, let's have Harry Yang, GM of Medical Business Group.
Hello, everyone. I am GM of Medical Business Group. Harry. For the second quarter, overall, medical business revenue grew 5% Y-o-Y for medical device grew 8%. For Q-o-Q performance up by 9%. The second quarter, the revenue has hit the highest in the history. We have some major breakthrough. We invested in to integrate infection and internal solution. And the second quarter, we enjoyed the contribution on the revenue. In the second quarter, we expand in overseas market.
For consumable, we have penetrate in India and China, we have local plants. And in India, it is in mass production phase. It is growing continuously. For dialyzer products. In China, we have gained 23 province agreement based on that, we can muscle into the public hospitals in these 23 provinces, and we will keep putting effort in penetrating other provinces, and we expect a great outcome in dialyzer in China market. And Norbel Baby on June 18, we underwent Board of Directors shuffle Qisda assigned, the Chairman to strengthen collaborative synergy to enlarge the drug store scope.
Let's look at the third quarter. We will continue to deepen medical businesses, and we will deepen post investment management. For overseas market, we will also continue to develop such as Vietnam, we're actively deploying the market in Vietnam. And in the third quarter, we will also enhance our strategic investment. We want to have a new partner to join our grand fleet.
Thank you. Next, let's have Joshua Tzeng, GM of BSG.
Hello, investors. I am GM of BSG, Joshua. The highlight of the second quarter for enterprise smart IT domestic market, we keep providing transformation AOT, production, MetaAge. On a Y-o-Y basis, stably grow. For AI application and ESG continue to be discussed. So for software and cloud, we increased sales in subscriptive software and application. For Enterprise Smart OT, we have seen urgent orders to increase. And we also increased stock up for long delivery material. For cybersecurity market continued to grow.
Chinese market enter peak season and cybersecurity model gradually to be mass produced, smart automation, stably increase on Y-o-Y and Q-o-Q basis. In Chinese market, we have more orders and revenue is also growing on Q-o-Q basis. Semiconductor utilization ratio is slightly bouncing back. The revenue grew on Q-o-Q and Y-o-Y basis. For O&O, online and off-line integration, we have observed the inflation in European and Americas markets and labor force deficiency. However, in Asia Pacific market and Southeast Asia and Japan market are graduately elevating. Dimension China market remains stable, and we will focus on AI in able skills and SCO solutions.
Looking into the third quarter, we will put effort in cloud integration, cybersecurity, AI computing, green energy and smart automation track transportation remain elastic demand perspective, and we will accelerate BSG cross-enterprise collaboration. Either it's on flat plans or investments and we will accelerate overseas subsidiary operation and enhance program and to perform necessary organizational reform and reshape.
And next, we will have GM of NCG, April.
Hello investors, I am GM of NCG Business Group, April Huang. I will bring the situation of NCG Business Group. For European and American market remain in a sluggish situation the inventory digestion is still ongoing for the overall performance. Only India market enjoyed gross margin in the first half. In the past, Alpha network did not muscle into India market. This year, we are suffering from a decrease compared to last year. And if our competitor is enjoying the growth, that's because they have muscle into India market. And in the second quarter, compared to the same period last year, we're suffering from a downward trend compared to the first quarter, up by 10%.
The first quarter dropped 39% Y-o-Y. The second quarter only dropped 9% Y-o-Y. In the first half, the revenue reached TWD 10.9 billion compared to last year's same period, down by 30%. And of course, it is a great decrease. Last year, we have performed integration in factories in China and we focus on the factory in Vietnam, maintain a stable gross margin performance. In the first half, the gross margin even grew slightly by 0.01% so revenue was not enough. So profitability was also worse than last year.
In the second half, let's see the domestic use devices such as routers or doses products. We have seen some rush orders to gradually being placed, they are not a lot, but we have seen rush orders to be placed. For Hitron, the single month revenue in June is on an upward trend compared to last year same month. And we expect in the third quarter should be better than last year. For Alpha network, the enterprise switch is still under digestion. So in general, NCG performance in the third quarter compared to last year, supposed to be lower than last year. Of course, we enjoy some urgent orders and we will actively respond to those orders to boost the growth -- the revenue growth.
Luckily, we have new product and new market deployment. We have seen the future growth momentum for new products other than and doses product line, we have doses 4.0. This is the new era of product line and supposed to be able to be in mass production at the end of this year, and it should be able to bring us some new growth momentum.
For new market development, so far, looking forward to Asia market growth, we have mentioned India and Japan markets. Recently, we have gained new clients from both countries. We have muscle in India market since last year. And hopefully, at the end of this year or beginning of next year, we can enter the mass production phase and bring better future growth momentum for NCG Business Group. And I've also seen a question being raised asking whether or not we want to establish factory in U.S. for Alpha network.
In the past, we have established factory in Mexico due to tax concerns. But because tax is not stable. So after establishing factory, the yield is not promising. In the recent years, the reason why we established factories is not because of the yield. It is based on the concerns of tax. And of course, it will bring more burden to NCG business group. And we've also seen some potential yield through EMS. So if we have the need, we will utilize the EMS resource -- in the beginning, we believe to establish a factory would bring us financial burden. So we will utilize EMS. Thank you.
Okay. This is Jasmin. We have investors to ask us to elaborate on Slide 17. Wish us to talk more about the content on Slide 17. Okay. Let's look at this slide. The purpose of this slide is to explain the gross margin range of each business group. And it is in appropriate for us to indicate the gross margin of each business group. Based on the concern of competitors. But we also hope to offer information for stakeholders about how we distribute high value-added business group or how can we improve the gross margin? So we expressed it in range.
Let's look at the second quarter performance. Medical located in 25% to 30%. BSG, 15% to 20%. NCG, also 15% to 20%. IT high value-added business group, also 25% to 30%. For IT Original display industry and brand also reached 10% to 15% and others. And that is why the entire gross margin has reached more than 16% for 5 consecutive quarters.
And you can see high value-added business group reached 25% to 30%. For the trend in blue text. On a Y-o-Y basis, Medical is on an upward trend. And other business group remain unchanged, remain in the same range. For Q-o-Q performance, that is compared to the first quarter performance. Medical, also on an upward trend. For IT high value-added business group, the gross margin range also on an upward trend on a Q-o-Q basis and others remain the same. And here, we talk about upward and unchanged it refers to gross margin range. And I hope I clearly explained. Thank you.
Okay. This is Peter. Due to the limited time, we want to answer many questions being raised by our investors and friends from Press Media. I will try my best to answer them. And for detailed information, I will invite Joe and GM to answer.
For dividend, some of you asked, is it possible to commit the dividend to be TWD 1.5 more than TWD 1.5. And if you look back the past 10 years, since 2014 to 2023 in the 10-year period I returned to Qisda in January 1. In the past 10 years, we are enjoying the profit. But before that, we have been through some struggles. And it has all passed, in the past 10 years, the EPS reached TWD 23.85, which means we have earned around TWD 2.4 share capital. Because it's more -- it's around TWD 19.6 billion, it's almost reaching TWD 50 billion. Among the TWD 20.82, our dividend is around TWD 12.62. It means our payout ratio exceeds 50%.
That said, our dividend policy in the past 10 years, we have the payout ratio policy to be over 50%. If we earn more, payout ratio will be lower. If we earn less payout ratio will be higher. Take last year, as an example, we earned TWD 1.51. We issued TWD 1.2 as dividend. The payout ratio was 80%. And because the company needs enough capital to maintain the business operation and growth. That is our goal for our grand fleet.
The ground fully need to continue to grow. Therefore, payout ratio by principle, is supposed to be around 50% or more than 50% to return to our stakeholders. And the other half would be used in improving the company and to invest in the grand fleet because we need a found to do so. And we hope to gain your support in balancing our growth.
Qisda Group is not as other companies that enjoy exceptionally good performance. They have extraordinary performance. We have to keep putting effort to keep up, and we still need to adjust our business construction. In the past 10 years, also other investors might ask this question. How come during the pandemic, we have observed the gross margin was not high, but the OP income margin was higher during the pandemic. And the reason for that is simple. We are improving our gross margin. And indeed, you can see our gross margin has grown since 2014 from 10% to current performance, more than 16%, almost 17%.
We're gradually improving our gross margin performance and why our OP income margin remains low. That is because our revenue dropped in the past 2 years. Our peak period would be 2022 and 2021. In 2022, we have reached TWD 239.8 billion. The revenue was great. The gross margin was low but the revenue was higher, more than TWD 30 billion to TWD 40 billion. So the profit would be different. And why in the past 2 years, the OP income margin was not good. That is because we expand from Medical, AOT and NCG Business group. You can see during pandemic, due to panic. They are -- our clients are afraid of deficiency overbooking or even triple booking occurs during the pandemic. And the post-pandemic development is not as good as we thought. So we spend longer time to digest inventory level and the inventory level digestion effect reflect in IT business group. 2 years ago, projector and display, especially display suffered from inventory level digestion. Until the beginning of this year, we have finally seen a pickup in display performance.
For a projector, it is delayed for around 0.5 years. We can still see the performance remained low for projector performance. But for the second half, we have also seen virgin orders to be replaced for NCG. Similarly, the decline is also due to the inventory level digestion. Since the second half of last year until now, we haven't seen the trough. We anticipate to see it in the third quarter and supposed to see some great orders happened in the fourth quarter. This is due to the economic circulation. BSG also suffered from some difficulties. We have also mentioned such as MetaAge encountered some difficulties. AOT suppose, we have many companies want recognition such as Ace Pillar, DFI and AEWIN. But for MetaAge, because of overseas markets are still digesting inventory level, and that affects our financial performance. For the market performance in domestic market. It is not bad before overseas market urgently need to digest inventory level.
So in general, to sum up, our dividend policy, we cannot commit to offer more than TWD 1.5 dividend, but we can maintain a 50% payout ratio to return to our stakeholders. And of course, we need to move forward to improve based on the 2-year efforts, we should slowly enjoy the outcome. In the second half, we should be able to see the comeback. Yes, we have suffered in the past 2 years to digest the inventory level in post-pandemic era.
And I hope this would gain your support and understanding. And we will keep putting efforts in demanding ourselves to be able to overcome the difficulty in each business group performance to recover to a faster growth. And to reply your question, what is my perspective in each business group in 2025. I've also mentioned for inventory level digestion this year, the first half, most of the business group supposed to overcome the difficulty. But for NCG supposed to come back in the fourth quarter. We hope each business group performance to come back as strong as that in 2021 and 2022 in revenue and net income performances.
And other questions such as intangible assets, should we have Jasmin to answer this question.
Some investors, as mentioned, for intangible assets reputation. As a matter of fact, since 2014, as grand fleet, we actively perform M&A and transform into high value-added businesses and we incorporate good companies. And of course, for that, we need to pay for the premium. And of course, those premium -- some of them goes to PPA, some of them goes to goodwill after appraisal. For the greater goodwill such as Alpha network and DFI acquisition. So cumulatively, the goodwill is worth of TWD 6 billion, and that could not be amortized. For PPA, the amortization peers is around 5 to 10 years. And some of the company that has been incorporated for a longer time, it has almost reached the period because we keep performing M&A. Ultimately, we hope the overall synergy and profitability should surpass the PPA and related costs.
Okay. I want to say more about the topic. The grand fleet established a reciprocal multi-wing platform. We have some results in the past 10 years, and we will keep improving on the results we have at the moment. And as you can see, Alpha network, SIMULA and MetaAge are undergoing some struggling time. And we have also elaborate on the situation. Alpha network should be able to see a comeback in the fourth quarter of this year. So as SIMULA and for MetaAge should spend 1 more quarter to digest the inventory level. However, the inventory level is rapidly digested in the second quarter. In the third quarter, should gradually pick up for the fourth quarter should return to a healthy status.
Due to the limited time, I will now further elaborate for the post investment management of grand fleet strategy. What we do is not the same as others. In 2021 and 2022, you can see all of our subsidiaries generate the synergy and market level are significant. In the past 2 years, we have been impacted by the issues that we have mentioned such as post-pandemic inventory level digestion, some of the subsidiaries are struggling. But we expect to see significant come back next year. To come back to normalcy. So since 2025, in NCG projector and display should come back to better performance. Some of you asked DIVA, the medical display performance. The performance is actually pretty good.
Should we have Daniel to answer this question.
To give us a brief explanation. For some specific projects and clients product, we are not in a good place to comment. But overall, we can see the synergy and should be able to reach our goal through the final results. Overall, DIVA medical display. After TSAA group synergy, the cost management and manufacture effect are all benefiting from this platform and can see significant growth.
And another question, how we were impacted by the stock price decline, how we handle that issue? For us, as management level, what we can do is to do our job. And naturally, it would reflect in the stock price. And of course, in the recent days, we see the decree in stock price. But yesterday and today, we see the bounce back. However, this is temporary entire Asia performance is impacted by the situation in the United States, since last year, it has dropped from TWD 50 to TWD 60 to this year, TWD 30. The performance this year is not ideal. And hopefully, in the second half of this year, to the next year. We hope to find back the growth momentum in 2021 and 2022. And of course, we want to move forward to bring our profitability to our normalcy and what our investors expected. And we will strive to bring a satisfying results. And to return to all of our stakeholders and to gain recognition. And we believe by doing so, the stock price will naturally come back.
At a management level, we could not comment much on the decrease of stock price. But we hope to put effort in the business and to return the stock price. And I think most of the questions, we have covered them all due to the limited time, we should wrap up this conference. Thank you.
Currently, all the questions submitted online are answered. Today's investor conference finished. Thank you very much for participating in the second quarter of 2024 Qisda Corporation Investor Conference. We will upload the audio file online later. Thank you again for your participation. You may disconnect now.