Touchpanel supplier TPK Holding Co Ltd (宸鴻) yesterday reported a 27 percent jump in net profit for last quarter from the same period last year, after it rejoined the supply chain for Apple Inc’s iPhone.
Last quarter marked the company’s fifth consecutive profitable quarter, as four years of restructuring efforts, including adjusting product portfolios and boosting manufacturing efficiency, appeared to bear fruit, TPK said.
“Since the beginning of this year, the company’s operations are back on the right track,” TPK chief strategist Freddie Liu (劉詩亮) said in a teleconference. “We believe our goal of posting annual revenue growth is within reach this year.”
TPK, the first touchpanel supplier for Apple’s first iPhone series, left the iPhone supply chain in 2012 after Apple switched to in-cell touchpanels for the iPhone 5, abandoning TPK’s out-cell technology.
“In the coming two to three years, the risk of seeing anything similar to what happened in 2012 is very small,” Liu said.
TPK reported that revenue last quarter grew more than 36 percent quarter-on-quarter to NT$30.51 billion (US$1.01 billion) on strong seasonal demand.
The company’s internal target this quarter is to keep revenue flat from last quarter, supported by new product launches by its clients, Liu said.
“There is [even] a chance that the first quarter of next year will not be a weak season as it has traditionally been, depending on whether clients’ new products gain traction fast enough,” Liu said.
In the July-to-September quarter, TPK’s net profit surged to NT$870 million, compared with NT$694 million a year earlier. On a quarterly basis, net profit soared 166 percent from NT$327 million.
“The third quarter results beat our expectations because of higher shipments due to seasonal demand, in addition to a better product mix and improved yield rate,” Liu said.
Operating margin climbed to 4.4 percent from 1.9 percent in the second quarter, surpassing the 3 percent estimated by most analysts, Liu said, adding that shipments of smartphone components soared 86 percent last quarter from the previous quarter.
Products used in smartphones and tablets accounted for 51 percent of TPK’s revenue in the quarter.
TPK is seeking new growth drivers outside mobile phone and computer components, of which large-size commercial displays and touchpanels used in cars, especially electric vehicles, have the greatest potential, Liu said.
The revenue contribution from the automotive segment is forecast to double next year from this year, Liu said, adding that touchpanels used in cars only made up 2 to 3 percent of the company’s overall revenue this year.
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