Chicony Power Technology Co (群光電能) shares yesterday jumped after the computer peripheral maker reported strong financial results for last quarter and said it expects its profit margin to continue to improve this quarter.
The shares rose 9.98 percent to close at NT$66.1 on the Taiwan Stock Exchange, outperforming the broader market, which ended 0.75 percent higher.
The stock has surged 46.89 percent this year.
After releasing third-quarter results on Monday that beat market expectations, the company said that gross margin this quarter would improve by 2 to 2.5 percentage points year-on-year to reach 16.1 to 16.6 percent, despite the industry’s traditional slow season.
In a conference call organized by Yuanta Securities Co (元大證券), Chicony Power said it expects revenue to grow 4 to 6 percent annually this quarter, which would translate into a quarterly decline of 11 to 13 percent.
That is mainly due to a front-loading of orders by clients that wanted to avoid impending US tariffs as well as inventory adjustments by other clients, Jih Sun Securities Investment Consulting Co (日盛投顧) said in a note yesterday.
A disruption caused by CPU shortages, which has affected all players in the PC industry, also played a part, it said.
Chicony Power’s revenue might decline 11.25 percent quarterly to NT$8.87 billion (US$292 million) this quarter, it added.
In the long term, revenue and earnings growth will likely be driven by steady market-share gains in the notebook adapter market and organic growth from smart home products, Chicony Power said.
The company mainly focuses on keyboards, switches, power supplies, smart and green solutions, and camera modules and adapters for notebook computers.
It operates four manufacturing sites in China’s Dongguan, Chongqing, Wujiang and Nanchang, and its major clients include HP Inc, Dell Inc, Microsoft Corp, Alphabet Inc’s Google and Lenovo Group Ltd (聯想).
In the third quarter, net profit rose 107.8 percent annually to NT$668 million and operating profit increased 42.7 percent annually to NT$850 million, or earnings per share of NT$1.75, the company said in a document posted on its Web site.
Third-quarter revenue grew 11.1 percent year-on-year to NT$9.994 billion, which was at the higher end of its guidance of an increase of 8 to 12 percent, while gross margin reached 17.8 percent, beating its guidance of 16.4 to 17.4 percent growth.
Operating margin was 8.5 percent, a record high for a single season, the company said.
“This was thanks to early pull-in from clients that wanted to avoid tariffs and better product mix from several growth drivers, including type-C notebooks, high-wattage notebooks, smart home, LED keyboard backlight modules and gaming consoles,” Yuanta Securities Investment Consulting Co (元大投顧) said in its note.
Chicony Power’s revenue last month hit a record NT$3.53 billion, up 9.41 percent year-on-year, with cumulative revenue in the first 10 months increasing 11.09 percent annually to NT$29.06 billion, company data showed.
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