Casetek Holdings Ltd (鎧勝), which supplies metal casings for Apple Inc’s MacBook and iPad, yesterday said it is upbeat about its revenue outlook in the second half of the year, thanks to growing orders for a major client’s new notebook, tablet and a new project.
“The production capacity utilization rate will jump to 90 percent this quarter and production will run at full capacity in the final quarter of the year,” Casetek chief executive Gary Chuang (莊育志) said during a teleconference.
Chuang declined to provide sales guidance for this quarter.
Citing a confidentiality agreement with the US-based client, Chuang said he cannot comment if the client’s new project is the next-generation iPhone, but said the project is neither a notebook nor a tablet.
Chuang said Casetek in May purchased 1,000 computer numerical control (CNC) machines specifically to make metal casings for notebooks. Last month, it purchased another 1,000 CNC machines for the US client’s new products, including notebooks and tablets, he said.
In order to meet the client’s orders, the firm’s board approved a plan to build a new plant in China’s Zhejiang Province, with an initial investment of US$50 million, Chuang said.
Chuang said capital expenditure of US$50 million would mainly be spent on buying land and the construction of the plant, noting that the exact number of CNC machines purchased would depend on the number of orders.
“We expect the new plant to become operational in the second quarter of next year. It will be Casetek’s largest and main production facility in the next few years,” he said.
While expecting revenue in the second half to increase from the first half, Casetek chief financial officer Jonathan Chang (張昭平) said rising labor costs in China remained a drag on the firm’s gross margin this quarter.
Gross margin was 20.1 percent last quarter, an improvement from the previous quarter’s 18.6 percent, but still down 5.4 percentage points from last year’s 25.5 percent, Chang said, adding that it was affected by rising labor costs and brief technical issues related to the US client’s latest notebook.
Gross margin for this quarter might also be affected by research expenses on a new project, he added.
Last quarter, net income was NT$959 million (US$30.2 million), or earnings per share of NT$2.82, a decline of 5.98 percent from last year’s NT$1.02 billion, but an increase of 6.1 percent from NT$903 million in the previous quarter.
Casetek shares fell 4.15 percent to close at NT$150 in Taipei trading yesterday, underperforming the TAIEX, which lost 1.09 percent.
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