Pegatron Corp’s (和碩) performance in the second half of this year is expected to grow from the first half on the back of clients’ planned product launches and a relatively low base in the first six months, a company executive said yesterday.
“The operations in the second half of this year will be much better than the first half, but the scale of the growth would become clearer in the next one or two months,” Pegatron chief executive officer Jason Cheng (程建中) told reporters after the firm’s annual shareholders’ meeting in Taipei.
Pegatron’s revenue depends largely on its smartphone assembling business, with the firm’s communications segment contributing as much as 61 percent of its total revenue in the first quarter of this year.
Pegatron, a major assembler of Apple Inc’s iPhones, saw combined revenue contract 8.15 percent year-on-year to NT$388.15 billion (US$12.03 billion) in the first five months, mainly due to sluggish iPhone 6S sales.
Cheng said that overall demand in the first half was weaker than in the past few years, but the size of the decline is still within company estimates.
He said that demand in the second half will be driven by a wide range of product launches by Pegatron’s clients from different segments, including orders for Pegatron’s game consoles with rising demand for virtual reality (VR) applications.
“Our goal is to maintain annual revenue of more than NT$1 trillion this year,” Cheng said, declining to say whether Pegatron’s revenue would decline from last year’s record-high of NT$1.21 trillion.
Cheng said Pegatron has been adjusting its resources and organization since last year, increasing investments in new areas — such as automotive electronics and Internet-of-Things (IoT) applications — as part of Pegatron’s long-term strategy to diversify its operations.
The company is also to invest in developments in robotics, especially for industrial robots used in manufacturing because of the climbing demand for industrial automation and intellectualization, Cheng said.
Cheng said that the company is evaluating the feasibility of setting up a manufacturing plant in India, with original design manufacturer (ODM) peers Hon Hai Precision Industry Co (鴻海精密), Inventec Corp (英業達), Wistron Corp (緯創) and Compal Electronics Co (仁寶) all having stepped into the Indian market.
Pegatron chief operating officer S.J. Liao (廖賜政) said the company is also considering regulations and infrastructure in India and personnel to manage India-based workers before making a final decision of whether to enter the market.
Pegatron shareholders yesterday approved the company’s proposal to distribute a cash dividend of NT$5 per common share based on the company’s net income of NT$23.81 billion, or NT$9.23 per share, last year.
That represents a payout ratio of 54.17 percent and suggests a yield of 7.14 percent based on the company’s closing price of NT$70 in Taipei trading yesterday.
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