Parade Q2 sales guidance upbeat

By Kevin Chen  /  Staff reporter

Wed, May 07, 2014 - Page 14

Parade Technologies Ltd (譜瑞), a leading video display and interface integrated circuit supplier, is expecting sales of between US$42 million and US$46 million this quarter, compared with last quarter’s US$44.5 million.

The Neihu District (內湖), Taipei-based company is the sole supplier of embedded DisplayPort (eDP) solutions for Apple Inc’s iPad Air and iPad Mini with Retina.

Parade’s products are also increasingly being used in non-Apple notebook PCs and tablets.


The company’s sales guidance for this quarter means a range from falling 5.6 percent sequentially to increasing 3.4 percent from last quarter, in line with SinoPac Securities Co’s (永豐金證券) forecast and slightly better than Yuanta Securities Corp’s (元大證券) estimate.

The better guidance is “mainly due to stronger-than-expected demand for commercial notebooks, which is sufficient to mitigate the iPad weakness,” Yuanta analyst Steve Huang (黃柏璁) said in a research note yesterday.

“This further justified our view that Parade is one of the key beneficiaries of the ongoing Windows XP notebook replacement cycle,” he added.

On Monday, Parade released its results for last quarter, showing its net income on a consolidated basis increased 410.19 percent year-on-year to US$8.5 million in the period from January to March, or earnings per share (EPS) of US$0.11, with revenue rising 112.69 percent to US$44.5 million from the same quarter a year ago.

However, on a quarterly basis last quarter’s net income decreased 25.55 percent and revenue declined 18.36 percent.

Gross margin improved 0.4 percentage points to 41.5 percent, due to an improved yield and product mix, while operating margin was down 2.3 percentage points to 21.1 percent on a lower sales scale.


For this quarter, Parade expects gross margin to be between 40 percent and 43 percent, with an operating expense of between US$9 million and US$10 million, according to the company’s Webcast conference document.

Chief executive officer Jack Zhao (趙捷) said in the conference that he expects demand for the company’s eDP timing controllers (T-CON) for commercial PCs to remain strong this quarter and extend into the next quarter, while its scalable intrapanel interface (SIPI) source driver products could start contributing to the firm’s revenue next quarter.

“Parade’s main challenge this year is meeting client demand amid a tight 8-inch wafer capacity situation,” Zhao said, adding that the company has increased its inventory levels since last quarter to meet the strong demand for notebook computers this quarter.


While the company sees integrated T-CON and source drivers for smartphones as long-term opportunities, SinoPac analyst Martina Huang (黃瑞君) said the industry is not yet ready for the company’s new products at the moment, expecting a much clearer visibility for Parade next year than this year.

The company’s shares fell 2.75 percent to end at NT$265.5 yesterday on the GRETAI Securities Market, while the over-the-counter index rose 0.70 percent.