Sat, Mar 15, 2014 - Page 13 News List

Simplo expects revenue to rise

TEN-YEAR VIEW:The firm’s chief executive said he hoped Simplo would make net profits every year for the next decade, as it projected strong growth for this year

By Lisa Wang  /  Staff reporter

Simplo Technology Co (新普科技), which supplies battery packs to Apple Inc and global PC brands including Lenovo Group (聯想), yesterday said its revenue would grow by a double-digit percentage this year, boosted by growth in new business, including battery packs for electric vehicles.

In addition, earnings per share for this year will surpass last year’s NT$10.5 per share, company chairman and chief executive Raymond Sung (宋福祥) told an investors’ conference in Taipei.

“Over the next 10 years, I hope Simplo will make an annual net profit that equals the company’s share capital,” Sung said.

Simplo has NT$3.08 billion in share capital.

Last year, Simplo’s net profit leaped 13.64 percent to NT$3.5 billion (US$115 million) from NT$3.08 billion in 2012, backed by NT$350 million in foreign exchange gains.

That also resulted in a stronger-than-expected quarterly net profit of NT$1.16 billion in the fourth quarter, beating Simplo’s forecast, which ranged from NT$900 million to NT$1.01 billion.

“The [revenue] growth will come from several areas, including new business units such as automation equipment and [battery packs for] electric bikes and buses,” Sung said. “[There are] no more ‘star’ products or major growth drivers nowadays.”

Last year, Simplo blamed price decline for its first annual drop in revenue, from NT$58.83 billion in 2012 to NT$54.74 billion. Battery packs for notebook computers are the firm’s biggest source of revenue.

“The outlook for notebooks looks okay this year,” Sung said. “We are seeing the world’s major brands, such as Lenovo, Dell [Inc], [Hewlett-Packard Co] HP, Asustek Computer [華碩電腦] and Apple are growing [their businesses].”

On new products, Simplo said revenue from battery packs used in electric bicycles will grow by as much as 50 percent annually to NT$1.5 billion this year from NT$800 million last year, as the company gained new clients in Europe.

Revenue contribution from this new business will be less than 5 percent this year, Simplo said.

Simplo will also start taking orders to supply automation equipment and electronic components this year, Sung said.

In the past, Simplo only made those products for use in its own factories, he said.

As those products deliver better gross margins, Simplo expected gross margin to be flat this year from last year’s 11 percent.

In the short term, Sung said revenue would decline about 30 percent this quarter to between NT$11.8 billion and NT$12 billion, compared with NT$17.22 billion last quarter.

Sung expected the company to regain growth next quarter by growing revenue 10 percent quarter-on-quarter.

In the current quarter, net profit is expected to plummet by 27 to 30 percent sequentially to between NT$812 million and NT$844 million, Simplo said.

Simplo shares rose 0.38 percent to NT$131, out-performing the TAIEX, which lost 0.69 percent yesterday.

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