Delta Electronics Inc (台達電), the nation’s top supplier of power supply units, yesterday reported lower-than-expected net profits during the second quarter of the year, as slowing economic growth in China negatively affected its industrial-automation business expansion there.
More than half of the company’s industrial-automation product sales are generated from the Chinese market.
In the April-to-June quarter, Delta reported net profit of NT$4.33 billion (US$144.77 million), or earnings per share of NT$1.78, up 3 percent quarter-on-quarter and 2 percent year-on-year, according to the company’s latest financial report.
However, the figure missed UBS Securities’ estimate of NT$4.4 billion and JPMorgan Securities Asia Pacific Ltd’s NT$5.08 billion, as the brokerages expected an improved product mix and lower operating expenses to continue lifting the company’s gross margin and profitability.
Delta’s gross margin of 10.95 percent in the second quarter also missed a market consensus of 11.7 percent. Due to an expanded product portfolio, Delta’s second-quarter gross margin improved 10 percent quarter-on-quarter and 2 percent year-on-year, it said.
Supported by increased sales in its energy management and smart green life businesses, Delta’s net profits during the first two quarters of the year expanded 22 percent to NT$8.52 billion from NT$6.96 billion during the same period last year.
Earnings per share increased to NT$3.51 during the first six months of the year from NT$2.87 a year ago, according to the report.
“Delta, along with all players in the power supply market, are turning more cautious after HSBC’s China purchasing managers index has fallen,” Delta chairman Yancey Hai (海英俊) said.
Yet Hai said he is confident that Delta’s sales and profit would improve during the second half of the year compared with the first half.
However, given macroeconomic uncertainties still exist, the strength of the growth can hardly be predicted in numeric terms, he said.
Hai said the firm’s industrial-automation, Internet-related and “smart green” concept product sales would keep growing on a quarterly basis.
Last quarter, Delta’s power electronics business, which covers industrial-automation products, contributed 54 percent of the company’s total sales, while its energy management and smart green life businesses contributed 22 percent and 19 percent respectively.
“The company is aggressive in developing energy-efficient products, like molding power chokes for high-end smartphones and tablets, as demand for such passive components appears strong,” Hai said.
Delta will mass produce molding power chokes, which generate higher profits, from this quarter, the company said.
The Taipei-based company also the entered vehicle drive system market and expects sales to contribute 1 percent of the company’s total sales after two years.
Delta shares closed down 6.07 percent at NT$131.5 in Taipei trading yesterday, the lowest level since April 12. The benchmark TAIEX fell 0.8 percent.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last