While a two-day suspension of operations at its No. 1 blast furnace because of a fire on Tuesday may not cause much harm to China Steel Corp (中鋼), the company is likely to see declining profits in the second half of the year because of steel oversupply from Chinese mills, analysts said.
The nation’s biggest steelmaker said in a stock exchange filing yesterday that its No. 1 furnace would soon resume operations after completing inspections and repairs, reiterating that the fire would have no major impact on its annual production.
However, Credit Suisse analyst Sidney Yeh (葉昌明) said in a report yesterday that the company’s earnings outlook for the second half of the year was uncertain because of high inventory levels in China.
“Some investors were hoping for profit recovery in the fourth quarter given the softening of raw materials. However, we believe the timing of the steel price rebound will be pushed back given the slow pace of de-stocking in China,” Yeh wrote.
Credit Suisse revised down its earnings forecast for China Steel by 8 percent, to NT$2.62 per share this year. The brokerage maintained a “neutral” rating on the stock, but lowered its target price to NT$34.3 from NT$34.7.
JPMorgan analyst Nick Lai (賴以哲) said yesterday in a separate note that he expected China Steel to impose more price cuts during the rest of the year, after a 4 percent cut for September shipments was announced on Tuesday — affecting full-year profitability.
JPMorgan downgraded China Steel to “neutral” from “overweight,” and lowered its target price for the stock to NT$32 from NT$40.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
RSS