Thu, Nov 14, 2013 - Page 14 News List

Simplo forecasts strong fourth quarter

TROUBLE AHEAD?The tablet and notebook battery maker gave positive guidance for this quarter, but analysts said next year may be tough as demand for its products wanes

By Kevin Chen  /  Staff reporter

“While we acknowledge Simplo’s efforts in diversifying into high-power applications and increasing the level of automation, these applications contribution and positive impact on margins is likely to be limited in the near term,” HSBC analysts said in a client note on Monday.

“Simplo needs to secure non-IT products strong enough to sustain future earnings growth,” UBS Securities analyst Patrick Chen (陳鈞寧) said in a separate note last week.

Chen said the company has started paying more attention to non-IT product applications, such as battery packs used in electric vehicle or energy storage systems.

However, those applications account for less than 5 percent of Simplo’s total sales, meaning that it will take a few more years for that strategy to yield a more substantial return, he added.

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