Semiconductor components distributor WPG Holdings Co (大聯大投資控股) on Tuesday reported record-high revenue for last quarter, sending the company’s shares 1.16 percent higher yesterday.
Despite the strong sales performance, management still faces pressure to deliver a meaningful margin improvement and better operating expense control, after the company appointed a new chief executive officer this month to help streamline its organization and improve operating leverage.
The company said consolidated sales last month declined 9.6 percent to NT$31.37 billion (US$1.04 billion) from NT$34.7 billion in May. However, last month’s figure rose 7.1 percent from NT$29.29 billion in June last year.
China remained the company’s key market, accounting for 79 percent of its revenue, followed by Taiwan’s 13 percent, Southeast Asia’s 6 percent and 2 percent from other areas, WPG said in a filing to the Taiwan Stock Exchange.
Adding in sales of NT$69.28 billion in April and May, consolidated revenue in the second quarter hit NT100.65 billion, up 16.3 percent from NT$86.57 billion in the previous quarter and 10.52 percent higher than the NT$91.07 billion recorded in the same period last year.
“Benefiting from increased demand from emerging markets, combined with steady demand for smartphone and tablet-related components, the company’s sales last quarter increased substantially,” the filing said.
Simon Huang (黃偉祥), WPG chairman and chief executive officer since 2005, has pinned his hopes on the appointment of a new CEO from the company’s AIT Group (詮鼎集團) subsidiary to help keep the company’s margins and operating expenses stable. In May, the company’s board approved the appointment of AIT Group chairman Frank Yeh (葉福海) as new CEO with effect from July 1, while Huang would focus solely on his chairman position.
Deutsche Bank AG research analyst Jessica Chang (張幸宜) yesterday said WPG has been showing good progress in controlling its operating expenses in the past three quarters.
"We expect prudent cost management to help support its bottom line, especially for this year," Chang said in a note, expecting the company to report earnings per share of NT$3.12 this year and NT$3.54 for next year, compared with NT$2.70 last year.
In the first six months of the year, WPG’s accumulated revenue grew 8.9 percent to NT$187.23 billion from last year’s NT$171.85 billion. Chang said the company could see full-year revenue increase 10.43 percent to NT$398.21 billion from last year’s NT$360.61 billion, driven by continued strong demand for chips used in smartphones and tablets.
WPG’s smaller rival WT Microelectronics Co (文曄科技) also released its quarterly results on Tuesday, showing that second-quarter consolidated revenue rose 5.01 percent quarter-on-quarter and 4.94 percent year-on-year to NT$21.02 billion — the second-highest quarterly sales in the company’s history.
Accumulated revenue in the first six months totaled NT$41.03 billion, up 7.76 percent from a year earlier, the company said.
WPG shares yesterday closed 1.16 percent higher at NT$34.85, while those of WT Microelectronics fell 0.29 percent to NT$33.95.