Thu, Mar 06, 2014 - Page 14 News List

Simplo reports falling sales for third straight month

By Helen Ku  /  Staff reporter

Simplo Technology Co (新普科技), the nation’s largest notebook battery pack maker, yesterday reported that sales fell for the third consecutive month last month due to seasonal factors.

Sales last month were NT$3.1 billion (US$102.66 million), a three-year low since February 2011, the company said in a filing to the Taiwan Stock Exchange.

Last month’s sales represent a 31.09 percent decline from NT$4.51 billion in January and a 16.19 percent contraction from NT$3.7 billion in the same period a year ago, according to the filing.

Cumulative sales during the first two months of the year decreased 3.85 percent to NT$7.61 billion from NT$7.92 billion during the same period last year, the filing showed.

“Simplo posted consecutive monthly sales declines mainly because market demand for Apple Inc’s iPad and iPhone products weakened,” UBS analyst Patrick Chen (陳鈞寧) said by telephone.

Simplo counts Apple as its largest client, with the US firm contributing more than 40 percent of its sales, Chen said.

The Hsinchu-based company also supplies battery packs to the world’s top five notebook brands — Lenovo Group Ltd (聯想), Hewlett-Packard Co, Dell Inc, Acer Inc (宏碁) and Asustek Computer Inc (華碩), he added.

“Simplo needs to build new sales engines to tackle sluggishness in the global notebook market,” Chen said.

He said Simplo’s weak sales last month were attributable to fewer working days due to the Lunar New Year holiday.

However, piles of notebook inventories that were not yet fully digested by Simplo’s clients also contributed to the company’s decreased sales last month, he added.

Simplo may not be able to achieve significant growth in monthly sales until the third quarter of the year, when Apple starts placing orders for battery packs used in its next-generation iPhone or iPad products, Chen said.

For this quarter, Chen forecast that Simplo’s sales would drop 20 percent to about NT$13.77 billion from NT$17.21 billion last quarter because of seasonal factors.

Chen estimated Simplo’s sales next quarter would flatten on a quarterly basis as Apple is phasing out its current product cycle before launching new iPad or iPhone products during the second half of the year.

Seperately, Dynapack International Technology Corp (順達), another battery supplier to Apple, yesterday reported that sales declined for the third straight month to NT$1.72 billion last month.

The figure brought Dynapack’s total sales during the first two months of the year to NT$3.66 billion, down 6.37 percent from NT$3.91 billion during the same period last year, the company said in a filing.

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