Compal Electronics Inc (仁寶電腦), which has overtaken Quanta Computer Inc (廣達電腦) as the world’s largest contract notebook maker, said yesterday it aimed to boost shipments by another 10 percent this quarter.
Despite the upbeat forecast, the Taipei-based company expected its gross margin to remain at 4.7 percent in the coming months or dip slightly owing to a labor shortage and rising material costs, company executives said.
“The company is confident it can meet its targets because global demand for notebook computers remains strong,” president and chief executive officer Ray Chen (陳瑞聰) told an investor conference.
Chen said the launch of Windows 7 helped fuel the momentum, with laptop sales worldwide forecast to rise to 160 million units this year and 200 million next year.
The company’s notebook shipments are expected to hit 36.5 million this year, accounting for 22.8 percent to 24.5 percent of the global market, he said.
“I see rising corporate and consumer purchases because of replacement demand,” he said. “The new operating system allows greater efficiency and many users will switch next year or later.”
Chen forecast notebook shipments would fall 10 percent sequentially in the first quarter of next year as the slow season sets in. He added that average selling prices were likely to stay flat this year and retreat modestly next year.
Aside from laptop manufacturing, Compal also produces liquid-crystal-display (LCD) TVs on a contract basis. Chen expects the company’s LCD TV shipments to reach 3.4 million units this year, or 12 percent of its total sales, with shipments peaking this month.
The executive said LCD TV shipments could rise to between 5.5 million and 6 million units next year, but declined to elaborate on the company’s forecast of annual growth of more than 60 percent.
“Premature revelations will displease customers and scuttle potential deals,” Chen said.
The company’s rosy forecasts drew mixed reviews.
A senior technology analyst at a foreign investment firm, who requested anonymity, said Compal was overly optimistic and might yield its leading position back to Quanta, based on current order visibility.
Kevin Lu (魯家恩), an analyst with Goldman Sachs Taipei Branch, said he was impressed with the improvement in Compal’s financials, which could carry on through next year.
Compal is expected to benefit from sales of an unprofitable subsidiary, TPO Displays Corp (統寶光電), to Innolux Display Co (群創光電) through a share swap agreement. Compal chief financial officer Gary Lu (呂清雄) said the sale would reduce its capital by 51.48 percent, allowing it to win better terms and provide Compal NT$1.5 billion in tax credit, thus raising its earnings per share by NT$0.40 this year.
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