Sat, Feb 05, 2005 - Page 10 News List

BenQ sees sales growth before 2008

REWARDS Despite an 85 percent slump in fourth-quarter income, the nation's largest mobile-phone maker expects own-brand sales to reach NT$200 billion by 2008

By Amber Chung  /  STAFF REPORTER

BenQ Corp (明基電通), the nation's largest mobile-phone maker, plans to boost the annual sales generated by its own-brand product lines to NT$200 billion (US$6.33 billion) by 2008, the company's chief executive said yesterday.

"We expect to reap the rewards of the efforts to promote our brand image in the next three years at the latest," BenQ chairman Lee Kun-yao (李焜耀) told investors yesterday.

By that time, the returns are expected to be reflected in the prices of its own-brand products, Lee said.

He projects that own-brand sales will reach NT$200 billion by 2008, making up more than half of the company's annual revenue.

The firm manufactures a variety of own-brand consumer electronics products, including liquid-crystal display (LCD) monitors, mobile phones and LCD televisions, as well as projectors, optical storage products and notebook computers.

Own-brand revenue, which accounted for 37 percent of last year's sales, up from 29 percent in 2003, is expected to exceed 40 percent this year, Lee said, adding that the goal of pushing this figure past 50 percent may be achieved sooner than expected.

BenQ posted a fourth-quarter net income that plunged by 85 percent from the previous quarter to NT$200 million, or NT$0.09 per share, on sales that remained unchanged at NT$40.33 billion.

The company ascribed its shrinking profits to the dipping average selling price of its LCD monitor products, which accounted for 48 percent of fourth-quarter revenue, despite shipments increasing by 26 percent.

The drawn-out price erosion has resulted in a reduced gross margin for the second straight quarter at 10.5 percent in the fourth quarter and decreased the company's annual gross margin to 11.5 percent last year, down from 13.7 percent in 2003.

BenQ's annual net income grew by 1 percent year-on-year to NT$7.61 billion, or NT$3.28 per share, on revenue of NT$164.95 billion last year, up 37 percent from a year ago.

"The average selling price of LCD monitors is expected to bottom out in the first quarter. Margin is expected to improve as panel prices stabilize," BenQ president Sheaffer Lee (李錫華) said.

First-quarter revenue, however, may drop as a result of decreasing LCD monitor revenue, flat shipment growth and changes in the customer mix for handset products, Lee said.

BenQ, the world's third largest LCD-monitor manufacturer, expects to ship 10 million units this year, up from 7 million last year.

However, the company lowered its projection for handset shipments to 10 million from last year's projected figure of 15 million to 16 million units, on reduced low-end handset orders, Lee said.

Nonetheless, Lee said that revenue might still rise, as the company has secured some high-end handset orders from new clients.

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