Inventec Corp (英業達), which assembles smartphones for Xiaomi Corp (小米), expects revenue to grow gradually in the remaining quarters of this year, mainly due to robust demand for cloud-computing-enabled data storage, a company executive said yesterday.
Better-than-expected growth in data storage has helped boost the company’s net profits for last quarter to NT$1.02 billion (US$31.35 million), more than doubling from NT$499 million a quarter earlier.
Last quarter’s growth was also aided by a sharply narrowed loss from solar subsidiary E-Tone Solar Tech Co Ltd (益通光能), at NT$7 million, from a loss of NT$186 million in the final quarter last year, as well as a smaller foreign-exchange loss of NT$313 million, from NT$487 million.
Operating profit expanded to the highest level in five quarters at NT$1.87 billion, up 40 percent from NT$1.33 billion in the prior quarter, a company financial statement showed.
“Data storage has a stronger-than-expected growth in the first quarter. We had expected a slowdown in demand,” company president Huang Kuuo-chun (黃國鈞) told an investors’ conference.
Huang said the growth momentum is expected to continue through this year.
“There will be double-digit percentage growth in cloud-computing storage, such as data centers, this year [by revenue and by unit]. The growth will primary come from China,” Huang said.
Inventec supplies data storage, including servers and data centers to HP, Dell and Lenovo Group (聯想).
PCs and servers accounted for 83 percent of the company’s overall revenue of NT$95.36 billion last quarter, with PC revenue contribution falling to less than 50 percent as the company’s efforts to divert from low-margin products bear fruit, Inventec said.
Meanwhile, PC business might remain flat this year as Inventec manufactures commercial laptops used by enterprises, a segment that is less affected by global economic uncertainty than consumer models, the firm said.
Aside from data-storage products, Inventec expects handheld devices, such as wristband and smartphones, to drive the company’s growth in the second half of this year as well.
David Ho (何代水), chief executive officer of Inventec’s handset subsidiary, Inventec Appliance Corp (英華達), yesterday raised its handheld shipments target to 75 million units this year from 70 million units estimated two months ago.
As a result, “the company’s revenue will grow quarter-by-quarter this year,” Inventec chief financial officer Yu Chin-pao (游進寶) told investors.
However, gross margin is likely to fall over the next three quarters after hitting 5.9 percent last quarter from 5.2 percent the previous quarter, Yu said, citing weakening solar business.
Shares of Inventec rose 0.74 percent to NT$20.45 yesterday, better than the TAIEX, which increased 0.3 percent.
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