Getac Technology Corp (神基) yesterday said it plans to spend between NT$800 million and NT$1 billion (US$26.2 million and US$32.7 million) this year to expand its mechanical components capacity to build up its automotive business.
The capital expenditure plan is higher than the annual investment of between NT$500 million and NT$800 million in previous years, Getac said.
“We foresee the automotive business accounting for 20 percent of overall revenue in five years,” Getac chairman James Hwang (黃明漢) told reporters in Taipei.
Mechanical components for auto parts currently contribute between 10 percent and 15 percent of the company’s revenues, Hwang said.
Getac, which was founded in 1989, manufactures rugged computer systems, mechanical components and aerospace fasteners.
The rugged computer systems are designed for use in difficult environments for military, medical and transportation, and accounted for 47 percent of Getac’s NT$20.4 billion sales last year, company data showed.
Getac’s mechanical components for automobiles are mainly manufactured in its plants in Hanoi, Vietnam, and Changshu, China, Hwang said.
The utilization rate of the Hanoi plant is between 80 percent and 90 percent, while the Changshu plant is running at full capacity, he said.
To meet rising demand, it plans to purchase new equipment for the two existing plants and to build another plant in each location, Hwang said.
The two new plants are expected to become operational next year, he added.
Hwang on Wednesday told an investors’ conference that he expects Getac’s revenue this year to increase by between 5 and 10 percent from last year’s NT$20.4 billion, driven by the mechanical components and rugged computer systems.
Revenue from the rugged computer systems could surge by a double-digit percentage this year on increasing order allocation from existing clients, he said.
The replacement demand for Microsoft Corp’s Windows 10 operating system will also lend support to the computer systems business this year, he said.
Getac last year reported a net income of NT$2.08 billion, or NT$3.68 per share, a 63.8 percent increase from NT$1.27 billion, or NT$2.19 per share, for 2015.
The company’s board has approved the distribution of cash dividends of NT$3 per share, which represent a payout ratio of 81.52 percent, lower than 2015’s 91.5 percent.
The dividend distribution plan suggests a yield of 6.94 percent, based on the company’s closing price yesterday of NT$43.20 on the Taiwan Stock Exchange.