According to Xishao, the HDD business revenue in Q1 was $2.408 billion, down only 3% compared with that in Q1, with a gross margin of 28.5%. However, the NAND flash business revenue in this quarter was $1.63 billion, flat month on month, down 36% year-on-year. More importantly, the gross margin fell from 43.8% to 19.3%, resulting in higher HDD profits than flash.
This time, we can't blame the price drop of flash memory, because the price of flash memory in Q1 was flat on a month on month basis, which was consistent with the trend shown in SK Hynix and Samsung financial statements before, and the bit capacity of Western Digital's shipment increased by 9% on a month basis.
Therefore, compared with Q4's financial report in fy19f, Xishu's flash memory business is still improving, and its operating profit increased by 48% on a month on month basis. However, compared with the same period last year, its operating profit fell by more than 80%.
Not only did not perform very well in the last quarter, but also the revenue of Q2 was predicted to be 4.1-4.3 billion US dollars, and the outlook is still not very optimistic. Analysts are not optimistic about the stock price of Xishu. RBC analysts lowered their target stock price from $70 to $64. With the impact of CEO retirement, Xishu's stock price plummeted by about 15%.