Mon, Feb 12, 2007 - Page 12 News List

Lite-On Group seeks 20 percent revenue growth

EXPANSION The group will focus on computer-related products, mobile phones, game consoles, portable computers, printers and TV segments to reach its goals


Lite-on Group chairman Raymond Soong leads top executives in a flag dance at a corporate event for employees held yesterday at Taipei Arena.


The Lite-On Group (光寶集團) yesterday said it aims to expand revenues at an annual composite rate of 20 percent over the coming years, beginning this year, by improving its customer portfolio and boosting revenue contributions from high-margin products.

The Taiwanese electronics group hopes to boost the contribution from high-margin products such as power supplies to 60 percent of its total revenues this year from 50 percent last year.

"After the adjustment of product portfolio, we will strengthen customer structure to further lift revenues and profit," Lite-On said in a statement released yesterday while the group was holding an annual party for employees.

The group

The group includes four affiliates under its umbrella -- power supply company Lite-On Technology Corp (光寶科技), optical storage maker Lite-On IT Corp (建興科技), handset key-pad maker Silitech Technology Corp (閎暉) and chipmaker Lite-On Semiconductor Corp (敦南科技).

Total revenues for the four companies were expected to reach NT$276 billion (US$8.37 billion) this year, if the goal of 20 percent annual growth was attained, the group said. Last year, the four companies made NT$230 billion in revenues with 70 percent -- or NT$161 billion -- of that coming from Lite-On Technology.

In the near term, the Lite-On Group said it would concentrate on expanding its clients in the areas of light-emitting diode (LED) chips, power supply devices and PC casings.

In addition, the group would target customers in the mobile phone, game console, laptop computer, printer and TV segments, the statement said.

One of the nation's biggest makers of computer peripheral equipment, Lite-On Technology said it was targeting an increase of 5.26 percent in revenues to NT$170 billion this year.

Last year, the company cut capital by 30 percent, or NT$8.73 billion, to boost its return on equity (ROE) and announced it would acquire Li Shin International Enterprise Corp (力信興業) through a share swap to strengthen its power supply capabilities.

Lite-On Technology has a 30 percent share of the PC power supply market.

New clients

Lite-On Technology's plan to buy Li Shin would boost profits and bring new customers in the areas of TVs and game consoles for the company this year, said Vincent Chen (陳豊丰), a Taipei-based analyst with CLSA Ltd.

The deal, which allows one Li Shin share to trade for 0.58 percent of a Lite-On Technology share, is scheduled to close on July 30.

In a note to investors issued in late December, Chen upgraded Lite-on Technology's investment rating to "buy" from "underperform" because of faster-than-expected growth in margins, helped by marked improvements in product variety.

He lifted his forecast for the company's gross margin to 12.5 percent for this year from an adjusted 11.1 percent last year.

Climbing shares

Since the beginning of the year, Lite-On Technology shares have climbed 4.69 percent to close at NT$46.85 on Friday, compared to a decline of 0.77 percent on the benchmark TAIEX index during the same period.

Chen believes that Lite-On Technology shares will perform better this year on growth in high-margin products including power supplies, LED chips and computer case businesses.

He raised the target price for Lite-On Technology 25.77 percent to NT$52.7 for the next 12 months, from NT$41.9 set in August.

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