Shares of Delta Electronics Inc (台達電), a power management system supplier, rose sharply yesterday after it reported an improvement in its gross margin for the first quarter of this year, dealers said.
Delta Electronics shares closed up 7 percent, the maximum permitted daily increase, at NT$92.80, with 22.22 million shares changing hands, while the TAIEX was up 2.33 percent at 7,676.81 points.
It reported a gross margin of 20.49 percent for the first quarter, up 2.43 percentage points from the fourth quarter of last year, while its net profit rose 48 percent quarter-on-quarter to NT$3.66 billion, the highest level in six quarters.
Market analysts said the higher net profit and gross margin in the first quarter reflected an increase in demand for industrial automation equipment, which is part of Delta Electronics’ product portfolio.
The company has devoted itself to product diversification in a bid to reduce the impact created by weakening pricing strength in power management supply production, they said.
According to Grand Cathay Securities (大華證券), industrial automation equipment commanded a gross margin of more than 30 percent, higher than the average gross margin Delta Electronics reported during the three-month period.
Analysts said automation equipment is expected to account for more than 10 percent of the firm’s total sales by the end of this year, up from about 8 percent recorded in the first quarter.