Catcher Technology Co (可成), the nation’s leading supplier of light-metal casings and enclosures for mobile devices, on Wednesday reported better-than-expected revenue for the first quarter, although gross margin missed market expectations.
Yuanta Securities Investment Consulting Co (元大投顧) yesterday said that the company’s revenue and gross margin would likely grow quarter-by-quarter this year due to higher revenue contributions from notebook computer and smartphone casings, as well as lower depreciation costs.
“We believe Catcher’s excellent execution and industry-leading position will drive its growth,” Yuanta said in a note to clients. “Additionally, we believe that Catcher’s position in Apple Inc’s casing supply chain should remain stable.”
Catcher’s consolidated revenue last month increased 116.3 percent month-on-month to NT$7.45 billion (US$241.4 million). On a yearly basis, the figure rose 14.3 percent.
Cumulative revenue in the first three months of this year reached NT$15.8 billion, down 22.6 percent from NT$20.41 billion in the same period last year, the company said in a regulatory filing.
Gross margin of 25.31 percent and operating margin of 15.4 percent were down 16.4 percentage points and 17.2 percentage points respectively from a year earlier, hitting the lowest in nearly 11 years.
Pretax income for the first quarter dropped 36 percent to NT$3.08 billion, compared with NT$4.82 billion in the same quarter last year.
“With more than half of Catcher’s revenue contributed by iPhone business in the first quarter, we believe its gross margin suffered due to continued average-selling-price cuts for iPhone XR. However, it seems the XR production plan will be centralized in the first half of this year, so that the supply chain can prepare for new iPhone production in the late second quarter,” Yuanta said.
“If so, we expect Catcher to have a lower share in iPhone XR and relatively higher share in notebooks/tablets in the second quarter, which should boost its gross margin,” it added.
Catcher would remain a solid Apple supplier this year and next year, because the progress of a potential competitor is still unclear, it said.
Moreover, Catcher might start supplying stainless steel frames to Apple next year, with the product forecast to be used in more than half of all iPhones, it added.
Catcher shares yesterday rose 2.93 percent to close at NT$263.5 in Taipei trading.
The stock has advanced 17.11 percent so far this year.
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