Mon, Nov 11, 2013 - Page 14 News List

China sales, Xbox boost Synnex

CONTINUED GROWTH?Increased distribution of Apple smartphones and devices from other companies could mean this month’s expected revenue gain continues

By Kevin Chen  /  Staff reporter

Synnex Technology International Corp (聯強) is expected to see revenue edge up this month and next month on the back of Microsoft Corp’s Xbox One launch in Australia and improved computer product demand in China, analysts said last week.

The Taipei-based company — Asia’s leading distributor of information technology products and electronics components — could also see further growth momentum next quarter thanks to increased distribution of smartphones from both Apple Inc and non-Apple clients, analysts said.

Synnex started distribution of iPhone 5S and 5C models in Taiwan this month, may do the same in Hong Kong next quarter and then in China, Yuanta Securities Corp (元大證券) analyst Vincent Chen (陳豊丰) said in a client note on Thursday.

The company is likely to start smartphone distribution of Chinese brands such as Lenovo (聯想), K-Touch (天宇), Huawei (華為) and TCL next year after it won China Unicom Ltd’s (中國聯通) “approved vendor list” certification in August, Chen said.

HSBC Securities analyst Carrie Liu said the China Unicom deal would drive up the company’s telecom revenue next year after declining smartphone sales this year.

Another potential new sales driver for Synnex next year is Lenovo’s planned distribution outsourcing in China, based on Yuanta’s recent channel checks.

“We estimate Lenovo is doing 60 percent distribution itself in China. To free up working capital and save costs, our checks suggest Lenovo may increase distribution outsourcing to two large distributors, with one being Synnex,” Chen said in the note.

Synnex’s consolidated revenue went down nearly 10 percent to NT$28.12 billion (US$952.9 million) last month from NT$31.23 billion in September, but remained on a par with the level seen in October last year.

During the first 10 months of this year, revenue amounted to NT$266.49 billion, up 3.41 percent from NT$257.7 billion in the same period last year, the company said in a statement on Thursday.

Among its major products, Synnex’s consumer electronics revenue increased 34 percent year-on-year to NT$42.6 billion between January and last month and IC components sales rose 25 percent to NT$57.9 billion over the same period. That helped the company offset its 60 percent annual decline in telecom products revenue, which was NT$16 billion in the first 10 months of this year.

Sales of information technology products, which account for 56 percent of its total revenue and are the company’s main driver, increased 7 percent annually to NT$150 billion during that period, company data showed.

While Synnex has faced slowing demand for consumer PCs this year, it is gaining a foothold in commercial computer market in China’s second and third-tier cities to make up the slack, Liu said.

She forecast the company to report a record-high revenue of NT$87 billion this quarter, up 1.4 percent sequentially.

Meanwhile, semiconductor component distributor WPG Holdings Co (大聯大) on Friday said the Golden Week holiday in China last month caused fewer working days there and led to lower revenue than in September.

The company said consolidated revenue last month reached NT$35.95 billion, down 5.15 percent from NT$37.895 billion in the previous month.

However, WPG said increased demand from emerging markets and stable sales of smartphone and tablet products pushed last month’s sales 19.95 percent higher than the NT$29.97 billion recorded in the same month last year.

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