Computer and handset casing maker Ju Teng International Holdings Ltd (巨騰) is expected to see earnings increase in the second half of this year, following the launch of Motorola Mobility Holdings Inc’s new Moto X smartphone, Fubon Securities Co (富邦證券) said yesterday.
“We believe that Ju Teng’s sales during the second half of the year will be solid and result in margin improvement as a result of the company’s business scale and product mix [metal and carbon fiber],” Fubon analyst Arthur Liao (廖顯毅) said in a report.
On Wednesday, Ju Teng reported its net profit grew 27 percent year-on-year to HK$320 million (US$41.26 million) in the first six months of the year, with earnings per share of HK$0.23.
The company’s shares closed up 9.21 percent at HK$4.86 in Hong Kong trading yesterday.
Ju Teng also projected sales growth in the second half, thanks to increased orders from a larger number of clients in tablet and smartphone markets, adoption of metal and carbon fiber materials used to manufacture casings and improved plastic casing utilization rate, Liao said.
The company is also expected to post higher sales during the second half, driven by sales of Acer Inc’s (宏碁) Iconia tablets, Asustek Computer Inc (華碩) and Google Inc’s second-generation Nexus 7 tablet, Amazon.com Inc’s new-generation Kindle Fire tablet and Microsoft Corp’s second-generation Surface tablet, Liao said.
Liao estimated Ju Teng’s tablet shipments would more than triple to between 18 million and 20 million units this year from 6 million units last year.
“This [increased orders] will enhance the [Ju Teng’s] plastic casing utilization rate and offset weaker notebook demand,” Liao said.
“Moreover, the company began shipping carbon fiber for the Moto X in July,” he said.
“However, the sales contribution may be less than 5 percent during the second half, but product margin will improve the gross margin,” he said.
Meanwhile, Taiwanese casing maker Catcher Technology Co (可成科技) will also benefit from the planned launches of Apple Inc’s new iPhone and iPad products, Goldman Sachs said.
On Thursday last week, Goldman Sachs upgraded rating for Catcher’s shares to “buy” because the company’s product mix is balanced with more tablet casings, and lifted the target price to NT$176 on stronger smartphone demand and the company’s diversified its client base.
Catcher’s shares closed up 1.74 percent at NT$146 in Taipei trading yesterday.
The brokerage forecast Catcher’s utilization rate would improve to 90 percent during the second half from 80 percent during the first half, leading growth rate of operating income to increase to 12 percent in the first quarter of next year from 8 percent during the first three months this year.
Both Fubon and Goldman Sachs said they remained cautious about Casetek Holdings Ltd (鎧勝), which also manufactures metal casings for PCs and mobile devices.
Goldman Sachs remained its target price for Casetek’s shares unchanged at NT$160, saying that Apple’s iPad mini tablet is the company’s sales driver, but the lack of new product may hurt Casetek’s profitability.
Casetek’s shares closed up 0.32 percent at NT$156.6 in Taipei trading yesterday.