Thu, Aug 08, 2019 - Page 12 News List

Advantech optimistic as revenue grows, unveils five-year plan to boost presence

By Natasha Li  /  Staff reporter

Advantech Co Ltd (研華), the world’s largest industrial computer manufacturer, yesterday provided an optimistic forecast for the coming months as it unveiled a five-year plan aimed at further strengthening its presence in North America, China and other emerging markets

Advantech, headquartered in Taipei’s Neihu District (內湖), reported an annual increase of 14.6 percent in revenue in North America and emerging markets in Asia, as well as a 23.6 percent surge in intercontinental regions — including countries such as Russia, India, Australia, New Zealand, as well as Latin America, Southeast Asia, the Middle East and Africa — in the first six months of this year.

“I believe the momentum will continue into the second half of the year,” Advantech chief financial officer and president of general management Eric Chen (陳清熙) said at an earnings conference in Taipei, adding that he expects double-digit percentage growth in the regions.

The company said that it plans to set up a new US headquarters in southern California, as well as a service center and at least five regional offices within the next two years, as North American constitutes its largest market, contributing 29 percent of overall sales in the first half of the year.

Advantech North America general manager Ween Niu (牛文中) said that he aims to achieve US$1 billion in annual sales by 2024, compared with US$445 million last year.

As sales growth in emerging markets is picking up speed, the company is setting up regional business units through partnerships and investments, Asia-Pacific and intercontinental regions director Vincent Chang (張敏忠) said.

The company would establish five more subsidiaries in emerging markets within the next three years, Chang said.

Despite a 9.4 percent year-on-year decline due to weak demand in the first quarter prompted by a US-China trade spat, China remains Advantech’s second-largest market, contributing 22 percent to overall sales, company data showed.

“I hope to stem negative growth in China sales by the end of the year... This is the first time we face such a challenge since 1992,” Advantech China general manager Paul Luo (羅煥城) said.

Advantech China aims to reach US$1 billion in annual sales within five years by focusing on the Industrial Internet of Things (IoT) and embedded IoT segments, Luo said.

The company also aims to set up a smart science park in China, in addition to a research and development center in Beijing, he said.

In Taiwan, the third phase of construction of its IoT service branch in New Taipei City’s Linkou District (林口) is to start by the end of this year and be completed by 2022, Chen said.

Advantech reported that net profit in the January-to-June period jumped 19.2 percent annually to NT$3.53 billion (US$112.11 million), or earnings per share of NT$5.02.

Gross margin grew from 38 percent to 38.6 percent and revenue expanded 9.48 percent to NT$26.28 billion over the period, company data showed.

The company said that it expects gross margin to remain between 37 percent and 41 percent in the second half, adding that it aims to increase its net profit margin by 1 percent within the next three years.

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