Shin Zu Shing Co Ltd (SZS, 新日興), which makes hinges for notebook PC and LCD monitors, last week reported stronger-than-expected revenue for last month thanks to robust demand for Apple Inc’s AirPods Pro wireless earphones, for which the company provides key metal injection molding components for the charging boxes.
Metal injection molding is technology that combines powder metallurgy and plastic injection molding. It has been increasingly applied by hinge makers to overcome restrictions inherent to conventional machining and casting of powdered metal.
Shin Zu Shing’s revenue increased 12.85 percent month-on-month and 45.69 percent year-on-year to NT$1.35 billion (US$44.5 million) last month, with cumulative revenue in the first 11 months rising 19.32 percent to NT$10.43 billion from a year earlier, it said in a regulatory filing on Monday last week.
Notebook computer hinges accounted for 33 percent of Shin Zu Shing’s sales, LCD monitor hinges contributed 28 percent and metal injection molding components made up 23 percent, company data showed.
The company’s business performance this quarter would beat market expectations and the growth momentum is expected to continue through the first half of next year, analysts said.
“We expect SZS to continue to benefit from stable AirPod demand, higher gross margin, and its position as a key hinge and metal component supplier,” Yuanta Securities Investment Consulting Co (元大投顧) said in a note on Thursday. “If Apple has new mass-production plans going forward, we expect SZS will see further sales and earnings growth.”
Jih Sun Securities Investment Consulting Co (日盛投顧) has upgraded its sales and earnings forecast for this quarter, predicting revenue of NT$3.66 billion and earnings per share (EPS) of NT$2.46, up from previous estimates of NT$3.28 billion and NT$2.21 respectively.
“Looking at 2020, LCD [monitor] and notebook hinge revenues are expected to remain stable, while the growth momentum in the future would come from MIM and other products,” Jih Sun said in a separate note on Tuesday.
As for folding handset hinges, Shin Zu Shing still tops other Taiwanese firms in terms of technological edge and manufacturing capacity, Jih Sun said.
The company is expected to join the supply chain of Samsung Electronics Co and Chinese brand mobile phone manufacturers following the beginning of mass production of their folding phones, it said.
“Since folding phone hinges require between 70 and 150 parts, a single phone would contribute significantly to the hinge manufacturer’s revenue,” Jih Sun said, adding that it expects Shin Zu Shing’s revenue to increase 14 percent to NT$13.15 billion next year.
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