General Interface Solution Holding Ltd (GIS, 業成), which supplies touchpanels for Apple Inc’s iPhone and iPad series, yesterday posted stronger-than-expected first quarter net profits, thanks to an improved gross margin.
Net profits grew ninefold to NT$353.05 million (US$10.89 million) during the quarter ending March 31, compared with NT$37.36 million in the same period last year. That translated into earnings per share of NT$1.13, up from NT$0.13 a year ago.
The figure exceeded the NT$297 million estimated by Daiwa Capital Markets analyst Kylie Huang (黃奎毓). Huang gave a “Buy” rating on GIS, in expectation of a robust annual net profit growth of 29 percent, benefiting from growing adoption of 3D touch and pressure touch sensors in new iPhone models.
Gross margin climbed to 8.62 percent last quarter from 5.07 percent in the previous quarter, beating Huang’s estimate of 7.6 percent.
GIS, which is 25 percent owned by Hon Hai Precision Industry Co Ltd (鴻海精密), attributed better yield rate and higher portion of tablet touchpanels to the improvement in gross margin, according to a company official who spoke on condition of anonymity.
Touchpanels used in tablets accounted for a higher profit share, ranging from 55 to 60 percent of the company’s revenue of NT$19.59 billion last quarter, up from about 50 and 55 percent through the whole of last year.
On a quarterly basis, GIS net profits plunged 68.5 percent last quarter from NT$1.12 billion in the final quarter of last year, as slow sales of Apple’s iPad Pro and iPhones curtailed demand.
This quarter, GIS’s revenues are expected to regain growth of 13 percent sequentially after sales of Apple’s next-generation iPad gather steam, said Huang, who also expects GIS to clinch new orders for Apple’s new iPad Air.
The company, located in Miaoli County, yesterday posted a 15.2 percent sequential decline in revenue for last month at NT$4.67 billion, compared with NT$5.51 billion in March. That represented an annual growth of 11.04 percent.
The company expects shipments and revenue to pick up this month and next month, supported by customers’ new product launches.
However, rival TPK Holding Co (宸鴻) expects revenue to drop 18 percent sequentially this quarter, blaming weakening demand for smartphones. TPK supplies touchpanels for Apple’s iPhone series and Apple Watch.
Separately, LCD panel maker Innolux Corp (群創) yesterday posted an 11.9 percent rebound in revenue for last month at NT$20.94 billion, up from NT$18.71 billion in March. Innolux holds a 13 percent share of GIS.
Shipments of PC and TV panels rose 2.5 percent to 8.16 million units last month from a month ago, while shipments of small and medium-sized panels expanded 15.4 percent month-on-month to 18.97 million units, Innolux said in a statement.
On an annual basis, last month’s revenue plunged 35.4 percent from NT$32.4 billion.
GIS shares yesterday rallied 2.58 percent to NT$83.5, while the stock price of TPK dived 3.34 percent to NT$60.8. The TAIEX edged 0.18 percent lower.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS