Tue, May 29, 2018 - Page 12 News List

Nova bullish on profits as China builds new fabs

By Lisa Wang  /  Staff reporter

Nova Technology Corp (朋億), which supplies chemical dispensing and waste chemical collection systems to chip and LCD companies, yesterday said net profit this year might outpace last year’s figure, as Chinese customers are accelerating new fab construction.

The strong growth in China was reflected in the company’s financial performance last quarter, when China operations generated 80 percent of revenue totaling NT$1.29 billion (US$43.1 million), the company said in a statement.

That compares with a 61 percent share of last year’s revenue of NT$890 million.

“We are optimistic about this year’s outlook. As Chinese semiconductor and LCD customers are gearing up to build new factories and new production lines, the company will benefit from their rapidly growing demand for equipment and related services,” Nova chairman Liang Chin-li (梁進利) said in a separate statement yesterday.

“A pickup in orders from and shipments to China will continue to drive the company’s growth in 2018,” Liang said. “For the full year of 2018, net profit is expected to be stronger than last year, based on orders at hand and messages from customers.”

Nova’s net profit last year climbed to a record NT$447 million, soaring 69 percent from NT$264 million in 2016. That translated into earnings per share of NT$15.07, up from NT$9.83.

Revenue also jumped 26 percent to a new high of NT$3.34 billion last year from NT$2.65 billion, with half of last year’s revenue coming from semiconductor equipment, the company said.

China is to aggressively increase its fab equipment spending through next year — 57 percent annually this year and 60 percent next year — to support fab projects from overseas and domestic companies, SEMI said in a report in March.

The surge in spending would place China ahead of South Korea as the top spender next year, when South Korea is expected to spend US$16 billion, SEMI said.

Nova counts Semiconductor Manufacturing International Corp (中芯) and United Microelectronics Corp (UMC, 聯電) as its major customers.

Both companies are expanding capacity in Beijing and in Xiamen respectively this year.

Nova has also clinched supply contracts from two of China’s top three memory chip manufacturers, one of which is Fujian Jin Hua Integrated Circuit (JHICC, 晉華電子).

The Jhubei (竹北), Hsinchu County-based company yesterday said that shareholders gave the go-ahead to the proposal of distributing a cash dividend of NT$10 per common share, representing a 66 percent payout ratio.

The distribution meant 5.42 percent yield compared with the stock’s closing price of NT$184.5 on the Taipei Exchange yesterday. Nova shares surged 2.5 percent yesterday, outperforming the TPEX’s gain of 0.69 percent.

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