Cloud users’ insatiable appetite for servers should bring long-term benefits to Wiwynn Corp (緯穎科技), but the cloud computing equipment maker might face near-term headwinds as the supply of Intel Corp’s central processing units (CPUs) remains tight, SinoPac Securities Investment Service Corp (永豐投顧) said in a note on Friday last week.
After this year’s relatively soft growth in server sales, next year is likely to be more exciting, thanks to the launch of Intel’s Ice Lake CPU and increasing demand for edge-computing servers, SinoPac said.
“Wiwynn taps into this demand by targeting cloud service providers (CSPs) with high growth potential. Its largest client, for example, plans to triple its datacenter capacity by 2023. The firm has penetrated the supply chain of another leading global CSP, with shipments to begin by year’s end,” SinoPac said.
“Now that Wiwynn has secured business relationships with three of the world’s top four CSPs, we think it can broaden its client base by attracting new clients with its strong research and development capabilities,” it added.
SinoPac maintained a “buy” call for Wiwynn, but raised the target share price by 20 percent to NT$494, representing an enterprise value 13 times next year’s estimated earnings per share (EPS) of NT$38.
Wiwynn shares closed at NT$431.5 on Friday, increasing 2.49 percent from a week earlier and outperforming the broader market’s 1.12 percent increase.
The firm, a subsidiary of Wistron Corp (緯創), reported net profit of NT$1.66 billion (US$52.86 million) for last quarter, down 4.44 percent from a year earlier, or EPS of NT$9.5. Gross margin fell to 6.8 percent and operating margin to 4.91 percent, while revenue declined 8.85 percent to NT$42.26 billion over the period, according to a company regulatory filing earlier this month.
The company’s revenue is predicted to decline by a single-digit percentage this quarter from last quarter due to a lower number of server shipments, which are still being affected by conservative spending at Microsoft Corp and Intel’s CPU transition from Sky Lake to Cascade Lake, Yuanta Securities Investment Consulting Co (元大投顧) said in a note on Aug. 11.
Following what is likely to be a lackluster quarter, the company’s server shipments are expected to rebound next quarter on the back of new orders, Yuanta said.
“Wiwynn’s major customer, Facebook Inc, is expected to start pulling in more computing and storage devices after the construction of its datacenters. Additionally, Wiwynn is on track to cut into Amazon.com Inc’s supply chain from December,” Yuanta said.
Yuanta recommended a target price of NT$480 for Wiwynn shares, implying an 11.2 percent upside from the share’s closing price on Friday last week.
END TO SPECULATION: The hotel’s management contract has been extended, despite reports that it wanted to end its alliance with Hyatt Hotels over a deal with Riant Capital Singapore-based Hong Leong Hotel Development Ltd (豐隆大飯店股份) yesterday said it has extended a management contract to ensure the continued presence of the Grand Hyatt brand in Taipei, ending rumors that the two sides were parting ways. “We are pleased Hyatt is able to come to terms on the extension of the management contract of Grand Hyatt Taipei,” said Kwek Leng Beng (郭令明), executive chairman of City Developments Ltd (城市發展) and Millennium & Copthorne Hotels Ltd (千禧國敦酒店). Hong Leong Hotel Development is a subsidiary of Millennium, and both fall under the Hong Leong Group (豐隆集團). The Grand Hyatt Taipei (台北君悅大飯店), owned and built by
’WHITE BOX’: The open platform would give local firms access to Cisco’s cloud-based mobile network to develop 5G telecom equipment and tap into the global market The Ministry of Economic Affairs (MOEA) yesterday introduced a new 5G “open lab” in collaboration with US-based information technology and networking giant Cisco Systems Inc to address the rapidly growing “white box” 5G networking equipment market. The open lab will be a platform where Taiwanese manufacturers can access Cisco’s cloud-based mobile network to develop their own 5G telecom equipment, such as small-cell base stations, network switches, modems and Internet of things (IoT) devices, a ministry statement said. The open platform would allow Taiwanese manufacturers to tap into the lucrative 5G telecom equipment market, which was previously monopolized by Nokia Oyj, Ericsson AB
Nintendo Co is raising its target for Switch production to about 25 million units this fiscal year, people familiar with the matter said, as the ongoing COVID-19 pandemic keeps lifting demand and component shortages ease. The Kyoto, Japan-based company, which in April hiked orders to 22 million units by March next year, is asking partners to tack on another few million units, said the people, who did not want to be identified discussing internal goals. Assembly partners plan to work at maximum capacity through December. The new production target suggests that Nintendo is likely to outperform its Switch sales forecast of 19 million
NERVOUS MARKET: With the infection sources still unknown for three COVID-19 cases that had departed Taiwan, investors have become uneasy, an analyst said Local shares yesterday came under heavy downward pressure, falling more than 1 percent as renewed fears over a possible increase in domestic COVID-19 infections hit market sentiment after the nation last week reported a case related to a Belgian national. Selling focused on the bellwether electronics sector, led by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which pushed down the broader market as investors ignored gains posted by tech heavyweights on the US market at the end of last week, dealers said. The TAIEX closed down 151.77 points, or 1.2 percent, at 12,513.03, on turnover of NT$231.43 billion (US$7.84 billion). Foreign