Sat, Jun 22, 2013 - Page 13 News List

Compal apologizes over record-low stock price

By Helen Ku  /  Staff reporter

Compal Electronics Inc (仁寶電腦), the world’s second-largest contract laptop maker by shipments, yesterday apologized to shareholders over its record-low share price because of falling notebook shipments.

“Affected by the rise of tablet computers, Compal’s sales last year slid significantly, but this has pushed the company to aggressively improve its business structure and marketing strategies,” the Chinese-language Wealth Group magazine’s online news site quoted Compal president Ray Chen (陳瑞聰) as saying in a report.

Chen said that with notebook shipments continuing to shrink, Compal had to enter the tablet market, despite the intense competition and shrinking margins engendered by low-priced models

Compal’s net profit plunged 41.79 percent to NT$6.41 billion (US$212.92 million) last year, from NT$11.01 billion in 2011.

“Compal is seeking to increase its products’ added value with enhanced technologies,” Chen said.

“The company expects to see profitability improve with a diversified customer base and more non-notebook orders,” he added.

Notebook shipments account for about 70 percent of Compal’s total product shipments, while tablets make up about 18 percent, he said.

Driven by the strong demand for smaller-sized computers, Compal expects its tablet and notebook computer shipments to surge to between 9 million and 10 million units this year from more than 1 million units last year.

“The margin for tablets is expected to improve next year as market penetration increases and manufacturing costs drop,” he said.

Shareholders yesterday approved the company’s proposal to distribute a cash dividend of NT$1 per share. The last time the company distributed a dividend of only NT$1 was in 1993.

“Touch-enabled products could boost demand for PCs,” Chen said. “The global penetration rate of touch-enable products is expected to rise to 30 percent during the fourth quarter of the year.”

“Microsoft Corp’s updated Windows 8.1 operating system could help propel notebook shipments,” Chen said.

Compal shares closed down 4.46 percent to a record low of NT$16.05 yesterday, underperforming the TAIEX, which slid 1.34 percent.

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