Touchpanel supplier TPK Holding Co (宸鴻) yesterday posted its first quarterly net loss due to a one-time asset impairment charge of NT$2.39 billion (US$78.93 million) last quarter.
For this quarter, TPK forecast that sales would decline 40 percent from the NT$41.88 billion posted last quarter due to seasonal factors — a fall that would be much bigger than analysts’ estimates.
“The guidance is shocking,” Yuanta Securities Co (元大證券) analyst Rainy Wang (王雨涵) said, citing consensus forecasts of a decline of between 20 percent and 25 percent.
TPK shares closed down 2.96 percent at NT$180.50 yesterday, ahead of the release of the company’s financial results and sales guidance.
TPK swung into a net loss of NT$1.6 billion, or loss per share of NT$4.88, last quarter from a net profit of NT$1 billion in the previous quarter and NT$5.32 billion a year ago.
Without the asset impairment, the company said it would have posted a net profit of NT$782 million, or NT$2.37 per share, last year.
Nonetheless, the impact of decreased sales of touchpanels used in smartphones and tablets still drove down the company’s full-year net profit to NT$7.18 billion, just half of the previous year’s NT$14.36 billion, chief financial officer Freddie Liu (劉詩亮) told an investors’ conference.
Earnings per share were NT$21.21 last year, compared with NT$43.89 in 2012.
“We may face quite a lot of headwinds before the second quarter ends,” Liu said.
“The company’s business performance should get back on track during the second half of the year with new product launches by customers,” he added.
With the smartphone market becoming saturated, TPK plans to offer more diversified products for various applications, including one-glass-solution touchpanels for high-end smartphones and silver nanowire-based items for mid or entry-level models.
The company, mainly known as a touchpanel supplier for Apple Inc’s iPads, will also ship touchpanel products to more than five Chinese smartphone makers this year, as part of its efforts to broaden its customer base and expand its market share in the mid and entry-level smartphone segment.
Last year, orders from Apple accounted for 43 percent of TPK’s total sales, down from a 59 percent share in 2012, whereas orders from Chinese smartphone vendors contributed 7 percent.
TPK president Tom Sun (孫大明) said the company might include touchpanels used in wearable devices in its product portfolio this year, in response to investors’ questions of whether TPK plans to mass produce smartwatch-like touchpanels for Apple.
To reduce its operating expense, which reached NT$2.84 billion last quarter, TPK plans to cut senior executives’ salaries by 20 percent and director-level staff by 10 percent this year.
However, the company will raise front-line employees’ salaries by 3 percent this year in accordance with the company’s employee reward program, he added.
Sun said TPK would return to profit this quarter, as “the company’s earnings performance had bottomed out last quarter.”
The firm plans to allocate a capital expenditure of NT$15 billion for this year, which is 33 percent lower than the NT$22.4 billion budgeted for last year, Liu said.
Up to 60 percent of the planned spending, about NT$900 million, will be used to build the company’s new plant in Pingtan in China’s Fujian Province, he added.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
Continental AG, which makes control units for Daimler AG cars, cannot pursue antitrust claims against a group of patent owners, including Qualcomm Inc, which are seeking royalties on telecommunications technology, a federal judge in Texas ruled. Avanci LLC, a licensing pool formed by Qualcomm, Nokia Oyj, Sharp Corp and other owners of patents on technology standards, is not breaching antitrust laws when it negotiates license agreements with automakers rather than the component makers, Barbara Lynn, chief district judge for the Northern District of Texas, said in dismissing the suit in a decision posted on Friday. The licensing group charges US$15 per vehicle
Sony Corp has cut its estimated Play Station 5 (PS5) production for this fiscal year by 4 million units, down to about 11 million, following production issues with its custom-designed system-on-chip (SOC) for the new console, people familiar with the matter said. The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the COVID-19 pandemic. However, the company has come up against manufacturing issues, such as production yields as low as 50 percent for its SOC, which have cut into
O2O BICYCLE SHOW: The Taiwan Bicycle Show next year is to be online to offline, with forums, audio-visual conferences and livestreaming of the offline events Local bicycle makers expect demand to continue outpacing supply due to orders triggered by the COVID-19 pandemic, with some companies seeing orders back up through next year. “Next year is all full in terms of orders. Our lead time on components is one year,” Giant Manufacturing Co Ltd (巨大機械) chairwoman Bonnie Tu (杜綉珍) told a news conference in Taipei organized by the Taiwan External Trade Development Council (TAITRA) to announce next year’s Taipei Cycle Show. The pandemic has reduced bicycle supplies and increased demand around the world, Robert Wu (吳盈進), chairman of KMC (Kuei Meng) International Inc (桂盟國際), one of the world’s