Kioxia Q1 Profit Exceeds 1.3 Trillion Yen; Morgan Stanley Upgrades Outlook

Huo Xing Finance reports that on August 3, J.P. Morgan released a report stating that Japanese memory storage company Kioxia recorded record first-quarter results, with sales reaching ¥1.7671 trillion, a 415% year-over-year increase and a 76% quarter-over-quarter increase; Non-GAAP operating profit reached ¥1.3262 trillion, up 2,833% year-over-year and 121% quarter-over-quarter, with operating margin rising to 75%. The report attributes Kioxia’s first-quarter performance primarily to price increases, with ASP rising approximately 70% quarter-over-quarter and bit shipments growing by low single digits quarter-over-quarter. By segment, SSD and storage sales reached ¥1.1747 trillion, up 440% year-over-year and 96% quarter-over-quarter, accounting for 66% of total revenue; data center and enterprise business accounted for over 60% of this segment’s revenue. For the second quarter, Kioxia forecasts revenue of ¥2.39 trillion and Non-GAAP operating profit of ¥1.9 trillion, with an expected operating margin of 79.5%. The company anticipates a 35% quarter-over-quarter revenue growth, driven primarily by continued ASP increases, while demand from data centers and enterprise customers remains strong. J.P. Morgan believes that the upward trajectory of Kioxia’s enterprise SSD sales remains a key metric to monitor. The company also announced a share buyback program of up to ¥800 billion, which is expected to support investor sentiment. J.P. Morgan maintains an “Overweight” rating on Kioxia with a target price of ¥155,000.