Audio and PC peripherals maker Primax Electronics Ltd (致伸科技), which plans to list its Huizhou subsidiary in China on the Shenzhen Stock Exchange, on Friday posted weaker earnings for the first quarter of this year.
However, its outlook for this quarter is upbeat, as it expects a sequential increase in revenue, the company said.
Tymphany Acoustic Technology (Huizhou) Co (惠州迪芬尼聲學科技) is expected to see continuous growth buoyed by headphone sales, a statement released at the company’s quarterly earnings conference said.
Net income for the first quarter fell 0.9 percent year-on-year to NT$356 million (US$11.52 million) on the back of non-operating gains, but dropped 24.5 percent quarter-on-quarter due to lower sales and margins.
Earnings per share were NT$0.8, which was flat from a year earlier, but lower than the earnings per share of NT$1.06 in the fourth quarter of last year.
Revenue fell 26.4 percent quarterly, but grew 14.8 percent annually to NT$13.64 billion in the first quarter.
A substantial increase in the sales of low-margin PC peripherals dealt a blow to the company’s profitability, with gross margin falling to 11.8 percent and operating margin declining to 1.6 percent.
“This year could see an upward trend in top-of-the-line products and a stabilized earnings structure,” the company said.
The Primax products that contributed the most to last year’s revenue were audio electronics (42 percent), PC peripherals (32 percent), mobile device components (16 percent), business equipment (7 percent) and automotive items (3 percent).
Tymphany Huizhou, which is 71.43 percent held by Primax, is expected to maintain strong growth into the second half of the year driven by headphones, premium audio products and smart speakers thanks to consumer demand for higher-quality audio, the company said.
The subsidiary plans to apply for a listing on the Shenzhen Stock Exchange’s Small and Medium Enterprise Board, Primax said on March 28.
Primax said it expects to expand capacity in Thailand and Vietnam, and add non-smartphone camera applications to its product portfolio for added growth.
It has proposed distributing a cash dividend of NT$2.4 per share, with a payout ratio of 58.25 percent based on last year’s earnings per share of NT$4.12.
The company’s shares on Friday fell 2.01 percent to close at NT$68.2 in Taipei trading.
They have surged 56.96 percent so far this year, outperforming the benchmark TAIEX, which has advanced 12.59 percent.
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