Tue, Aug 13, 2019 - Page 12 News List

Qisda bullish about profit from medical, business solutions units after strong Q2

By Natasha Li  /  Staff reporter

Qisda Corp (佳世達) is upbeat about the contributions it expects to see from its medical unit and business solutions unit by the end of the year, after the company reported strong results for the second quarter.

“I hope we can again reach 20 to 30 percent [revenue] growth this year [from the medical sector],” Qisda chairman and president Peter Chen (陳其宏) told an investors’ conference.

Last quarter, the company’s medical unit — services, equipment and consumables — contributed NT$41.23 billion (US$1.31 billion), or 7 percent, to total revenue.

Qisda’s medical unit is focusing on China’s growing hemodialysis market, as the company holds a 70 percent stake in a venture — BenQ Blood Purification (Shanghai) Co Ltd (明基血液淨化) — with Shanghai Kunxin Medical Technology Co Ltd (上海坤鑫醫療科技).

“These are treatments people need the rest of their lives... There are already about 700,000 people undergoing hemodialysis and another 4 million people in need of it,” Chen said, adding that the medical unit’s gross margin is 20 percent, while its net profit is 5 percent.

The company’s business solutions unit is focusing on the surveillance industry, as the firm has acquired a 20 percent stake in Topview Optronics Co (勝品電通), which specializes in Internet protocol cameras.

“Market demand is growing as an increasing number of companies return to Taiwan,” Chen said.

The company is investing in the development of image processing software and lens modules after acquiring an 11 percent stake last year in Jiangsu, China-based Yudi Optical Instrument Co Ltd (宇笛光學), which specializes in optical processing.

The company expects to increase the unit’s gross margin to 30 percent, Chen said.

Last week, Qisda expanded the unit, which last quarter contributed 7 percent of overall revenue, by acquiring a 35 percent stake in Sysage Technology Co Ltd (聚碩科技), a sales agent for companies such as Cisco Systems Inc, IBM Corp and Oracle Corp.

The company’s unit that makes LCD monitors for enterprises continues to be a major revenue source, contributing 57 percent to overall revenue last quarter.

By the end of this year, Qisda plans to increase the production of LCD monitors at its Guishan plant in Taoyuan from 200,000 units per month to 600,000 units as an adjustment to US-China trade tensions, Chen said.

The company seeks to relocate to Southeast Asia in an effort to divert risk, he added.

“We are prepared to relocate a maximum of production lines [from China] ... but it really depends on the demands of our clients,” Chen said. “Relocation is costly and so is establishing a new supply chain.”

Nonetheless, the company is prepared to relocate several production lines to the US in a “worst case scenario,” he added.

Second-quarter net income grew 29.76 percent year-on-year to NT$1.04 billion, or earnings per share of NT$0.53.

Gross margin increased to 13.7 percent in the first six months of this year, the highest since 2013, while revenue grew 10 percent to NT$81.09 billion.

In the first half of this year, net income reached NT$1.93 billion, or NT$0.98 per common share.

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