Everlight Electronics Co (億光) and Epistar Corp (晶電) are expected to perform better in the second half of this year, driven by improving demand for LED lighting products and infrared applications, analysts said.
“We estimate Everlight will see 10 percent annual growth in revenue in the second half of this year, as all of its product lines are seeing better demand from a year ago,” Credit Suisse Group AG analyst Derrick Yang (楊泓極) said in a note on Wednesday last week.
Yang’s forecast came after Everlight, the nation’s leading LED chip packager and lighting products provider, reported annual growth of 1.13 percent in its second-quarter revenue to NT$7.13 billion (US$222.88 million).
On a quarterly basis, revenue climbed 2.58 percent from the previous quarter’s NT$6.96 billion, according to the company’s filing with the Taiwan Stock Exchange.
Yang attributed the revenue growth to Everlight’s better-than-expected sales of LED consumer lighting products and growing demand for high-margin infrared applications.
Everlight’s growth momentum will extend to the second half of this year on the back of the robust outlook for the company’s general lighting and backlight units and infrared applications, Yang said in the note.
China’s national holiday in October is also expected to boost demand for TVs, lifting sales of Everlight’s backlight units used in TVs, SinoPac Securities Co (永豐金證券) said in a separate note last week.
In addition, the Christmas holiday season might lend support to shipments of Everlight’s backlight units and LED flashes used in smartphones to the European and US markets in the fourth quarter, SinoPac analyst Hsiao Ho-shun (蕭合順) said in a note on Tuesday.
Epistar, the leading LED chipmaker, might post a double-digit percentage increase in revenue from NT$6.55 billion last quarter to NT$7.53 billion this quarter, supported by solid demand for LED lighting chips and LED four-element products, such as infrared applications, Yang said.
The company’s efforts to reduce operational costs and develop a better product portfolio will also help improve its gross margin from about 8.7 percent last quarter to 12.7 percent this quarter, Yang said.
At the company’s annual general meeting on June 17, Epistar said it has built alliances with LED component makers to provide semi-module products, while avoiding direct competition with Chinese peers.
As the company has built an intellectual property portfolio of 1,794 patents through self-developed technologies and cross-licensing, the combination of its portfolio and vertical integration in the industry might help the company to target US customers and poses a solution to grow its business amid intensifying competition from Chinese peers led by Sanan Optoelectronics Co (三安光電), analysts at Macquarie Capital Securities Ltd’s Taiwan branch said in a report last month.
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