Thu, Nov 25, 2004 - Page 10 News List

Mitac-Synnex projects growth in sales

GOOD OUTLOOK The Mitac-Synnex Group said at its 30th anniversary ceremony yesterday that its annual sales are expected to grow to about US$17 billion next year

By Amber Chung  /  STAFF REPORTER

Mitac-Synnex Group (聯華神通集團), the nation's first own-brand computer company, said yesterday at its 30th anniversary ceremony that it expected annual sales to grow to US$17 billion next year.

Mitac-Synnex is expected to generate revenue of US$13 billion, with over 70 percent, or about US$10 billion, coming from its most lucrative distribution network business -- Synnex Technology International Corp (聯強國際) -- and the rest from manufacture of information technology (IT) products and information system integration business.

"We will keep steady development in the three domains [distribution, manufacture and systems integration] to achieve our target," the group's chairman Matthew Miau (苗豐強) said at the ceremony yesterday.

Combining distribution and manufacturing businesses has given the group great advantages, Miau said.

Founded in 1974, the group started as a computer manufacturer and then grew vigorously as an IT product distributor.

Synnex is the Asia-Pacific region's largest computer and electronics chain with over 20,000 outlets in other countries like China, Hong Kong, Thailand and Australia.

The company is the largest IT product distributor in its home market, Australia and Thailand, as well as the No. 2 player in China with over 4,000 outlets, second only to Digital China (神州數碼). Synnex is also the third-largest player in the US market.

The ambitious firm last week announced the purchase of a 36.3 percent stake in Redington Group, the No. 2 computer and electronics retailer in the fast-growing Indian market, paving the way for further development in Asia.

Synnex is planning to break into the European market through investing in local retailers, like it did in India.

The company's aggressive expansion outside its home market in recent years could boost its overseas sales to contribute over half of annual sales this year, up from merely 23 percent in 1997, Synnex president Evans Tu (杜書伍) said last week.

Compared to the fast-growing and lucrative distribution business, its manufacture business seemed to grow at a slow but stable pace.

"The group's manufacturing divisions, including Mitac International Corp (神達電腦) and Mitac Technology Corp (神基科技), are companies showing stable growth," said Frank Chi (紀鈞中), an analyst with Grand Cathay Securities Co (大華證券).

Mitac Technology, a third-tier laptop contract maker, saw its shipments jump to around 1.4 million notebooks from 950,000 units last year to clients including NEC and Fujitsu with a gross margin of 7.2 percent, way above the level of between 4 percent and 6 percent of first-tier players, Chi said.

Mitac International last year relaunched its own-brand products under the name of Mio, including smart phones and global positioning system devices, and have seen good sales in the Asian and European markets, he said.

The company could enjoy a gross margin of between 20 percent and 25 percent from its branded products, Chi added.

The branding business contributed less than 10 percent of sales from manufacture, while contract manufacture make up the rest, the group's corporate president Fran-cis Tsai (蔡豐賜) said.

"Brand business is not easy to achieve overnight, but we would keep trying in this regard," Tsai said.

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