Sat, Nov 09, 2013 - Page 14 News List

Primax Electronics says sales drop on deferred orders

By Kevin Chen  /  Staff reporter

Computer and handset peripheral products maker Primax Electronics Ltd (致伸) yesterday said its sales edged up slightly last month from September, but fell 11 percent from a year earlier, reflecting the weak PC market.

Shares of Primax, whose clients include Apple Inc, Dell Inc, Hewlett-Packard Co, HTC Corp (宏達電), and Canon Inc, fell 5.14 percent to NT$24.9 yesterday in Taipei trading, underperforming the broader market, which dropped 0.65 percent.

Consolidated sales rose 0.3 percent last month to NT$3.43 billion (US$116.3 million), the Taipei-based company said in a statement.

Primax attributed the flattish performance last month to some clients’ deferring their orders to this month. It expects a clear upward trend for its sales this month, according to the statement.

In the first 10 months of the year, cumulative sales totaled NT$34.69 billion, a decrease of 2 percent year-on-year.

Primax is expanding into digital audio electronics from the PC field to improve its earnings structure following a lackluster third quarter when it reported flattish quarter-on-quarter sales of NT$10.36 billion, while earnings declined 22 percent to NT$199 million or NT$0.46 per share.

On Oct. 15, the company announced it would spend US$84.05 million to acquire a 70 percent stake in speaker and digital audio equipment maker Tymphany HK Ltd.

Primax expects the deal to begin contributing to the company next year after it is completed by the end of this year.

SinoPac Securities Co (永豐金證券) believes the addition of Tymphany could provide more digital home solutions to Primax, plus an earnings contribution of NT$0.65 per share next year.

For this quarter, Primax said it expects sales to surpass last quarter’s figure and hit the highest level this year.

SinoPac Securities analyst Frank Kuo (郭勁甫) forecast the company’s sales this quarter to increase 8 percent sequentially to NT$11.19 billion due to product launches by major clients and some demand from customers restocking inventory.

Fourth-quarter earnings are expected to reach NT$260 million, or NT$0.61 per share, he said in a note to clients.

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