Shares of Delta Electronics Inc (台達電), one of Taiwan’s leading power-management solution providers, moved higher yesterday after the company reported an improved bottom line for the second quarter a day earlier, dealers said.
As the high-tech sector enters its traditional peak season in the second half of the year, many investors have high hopes that Delta’s performance in the second half will be better than that of the first six months, they said.
Shares of Delta Electronics rallied 5.7 percent to NT$139 yesterday, outperforming the TAIEX, which inched up 0.98 percent.
“Higher earnings for the second quarter encouraged bargain hunters to come back soon after the local bourse opened today to take advantage of the stock’s heavy losses seen a session earlier,” Hua Nan Securities (華南永昌證券) analyst Henry Miao (苗台生) said.
At an investors’ conference held on Monday, Delta Electronics said it posted NT$4.33 billion (US$144.6 million) in net profit, or NT$1.78 in earnings per share (EPS), in the second quarter, up from NT$4.19 billion, or NT$1.73 per share, recorded a quarter earlier.
During the period from April to last month, the company’s consolidated sales totaled NT$43.4 billion, up from NT$38.8 billion registered in the first quarter, while its operating margin for the second quarter stood at 10.6 percent, compared with 10.9 percent in the previous quarter.
In the first half of the year, the firm posted EPS of NT$3.51, compared with NT$2.87 in the same period last year.
“Based on the latest earnings data, Delta Electronics’ bottom line not only improved quarter-by-quarter, but also annually. It is a company which is able to generate stable earnings in the local high-tech sector,” Miao said.
Delta Electronics chairman Yancey Hai (海英俊) told investors that although the market outlook for the second half of the year remained cautious amid slowing economic growth in China, he was still upbeat about his company’s performance in the second half.
Hai said the company’s sales for the third quarter are likely to increase from the second quarter, and revenue for the fourth quarter is expected to surpass that of the third quarter.
“The current buying showed investors give credence to Hai’s assessments for the second half of the year, as the company has long been fundamentally healthy, and is making plenty of efforts to improve its product portfolio in order to boost profitability,” Miao added.
However, Miao said Delta’s shares are likely to face technical resistance at about NT$145 to NT$150 in the short term, after the stock’s recent strong showing.